New report is reality check for UK and an opportunity for Scotland

Sobering because of the sorry state we are in, with the UK the most unequal major economy in Europe – Broken Britain indeed. People in Germany, France and the Netherlands are £8300 better off than us per year, as are those in the US and Canada too.

The report cites a “toxic” combination of low growth and long-lasting high inequality as the background to an epic and grim decline, inequalities that arose in the 1980s and have pretty much hung around like a bad smell ever since the Thatcher era (take note, Mr Starmer). In fact, if you’re a child of the early 80s, you’re half as likely as your parents to own your own home by 30. I doubt you’ll see that turned into a snappy slogan on Sunak’s podium.

But reading the report was uplifting too because it doesn’t just cover the full extent of a failure of government and its misplaced nostalgia for glorious times of old. The Resolution Foundation has a clear 10-point plan to lift us out of this mire and into a better future by focusing on our strengths.

And there are many aspects of these recommendations which reflect ideas I’ve been exploring on how to kickstart economic growth in my constituency of Dunfermline and West Fife, now the former has acquired city status.

First the bad news and the truth of where we are right now, which this report spells it out in no uncertain terms. Britain has not recovered from the financial crash of 2008.

READ MORE: Douglas Chapman is right to ask why we should accept 'half a loaf'

15 years of stagnation means that in terms of productivity we are nine percentage points behind France, Germany and the US and our wages have “flatlined”, costing the average worker £10,700 a year in lost pay. Our lower-income families are 27% poorer than their French counterparts.

That’s a lot of money when our energy bills have gone through the roof and food inflation is still around 9.1%, according to November’s figures. That’s a big difference when 4.3 million children live in poverty, with many families now classified as the working poor.

Interestingly, the launch of the report featured the Chancellor Jeremy Hunt and Labour leader Keir Starmer among panels of economists and journalists. I wonder what these politicians really think of its stark analysis. To read it laid out in black and white like this must surely be a wake-up call to these head-in-the-sand magical thinkers at Parliament – both red and blue – who pretend we can “Make Brexit Work” or that “getting tough on immigration” is the answer to our economic woes.

Of course, in Scotland, we can’t rely on Hunt or Starmer to pick up on any of these excellent recommendations. However, until they wake up out of this death spiral there is much we can do on our own steam to run with this 10-point plan.

I’m delighted to lead this charge from Scotland’s eighth city, our ancient capital of Dunfermline, with a view to wider benefits across our small but aspirational nation.

The report’s number one recommendation focuses on making the UK a services superpower. It argues that, given the UK is second in the world in terms of services exports (with the US up front), we don’t make enough of this position or our strengths in not just financial services but also education and culture too. There is a huge opportunity to grasp here, given that the services we excel at are growing globally twice as fast as trade in goods.

This is very good news for Scotland particularly, given our strong performance in financial services exports which continue to thrive despite international challenges. According to a recent report by TheCityUK, Scotland exported £9.2 billion of financial and related professional services in 2021, up 3.1% from 2020, with 24% of these exports going to the EU that year and 76% across the world.

In the summer, Scottish Development International published its trade and export figures for 2022-23, which showed that Scotland’s products and services remain in high demand globally, with many new markets and opportunities to explore by focusing on our key strengths in consumer industries, science and technology, energy and the low-carbon transition.

We are in an excellent position to capitalise on this position globally to drive productivity and prosperity at home in Scotland. With the port of Rosyth in my constituency, a city port for a new city, we need to make sure we grasp these opportunities for the benefit of our local and national businesses and communities.

Brexit, as ever, is the elephant in the room – it will be vital for us to continue to pressurise the UK Government to lift regulatory and cost frictions to free our trade potential as well addressing migration and mobility issues with a more pragmatic and less tabloid approach which values skills, opportunity and people.

Which brings me on to another excellent report out recently by the Institute of Export and International Trade and entitled Global Horizons: Realising the Services Export Potential of UK Nations and Regions, which analysed over and under performers across the country as well as identifying barriers to success.

One issue highlighted by this report was the lack of data available in Scotland on our services exports in order to fully incorporate our nation into the analysis.

The report recommended that trade taskforces should be set up across the country to gather this vital data and deepen trade opportunities. I would be delighted to host such a trade taskforce at the heart of the Firth of Forth, as a focal point for delivery on export and import data across services and goods. This seems especially apt given my campaign to re-instate our connection to Europe with the new passenger and freight ferry route from Rosyth to Dunkirk due to start in spring next year.

The second recommendation in the Resolution Foundation report focused on boosting cities outside of London by upping our ambition and investment way beyond the scope of Levelling Up, which, like most of the Conservatives’ economic policies, has been more about showing with none of the telling.

The report suggests our cities should be areas of high productivity with high-paid, high-skilled service sector jobs. This mirrors plans we have been exploring locally to capitalise on our new city status in Dunfermline and build on our growing population and existing talent base.

As the eighth city, Dunfermline is in an excellent location geographically, with good transport connections and an array of internationally renowned universities in its radius.

We are fortunate to have had substantial investment in a new learning campus with two new high schools and a Fife College on this site on the outskirts of the city, one of the largest Passivhaus educational facilities of its kind in Europe and due to open its doors next year.

We’re looking to boost our expertise and build on training and learning opportunities for local people to expand the range of skills available to both existing and incoming businesses.

In addition, we already have a strong presence in the financial and information technology sectors and are in an excellent position to invest in and grow our renewable potential with the new Greenport facility at Rosyth.

There is so much more in the Ending Stagnation report that can be applied to boosting opportunity and prosperity and tackling inequalities in Scotland, much of which we can do with our devolved powers in the here and now. We owe it to our citizens – and to our young people – and we have a lot of the mechanisms in place already thanks to the Scottish Government.

The UK Government is not delivering for Scotland. It never has. We need to make our own success story and create a modern legacy for our citizens.

As the MP for Dunfermline and West Fife, I’m going to do my best to make this story happen here – because successful cities are built on successful communities and that success must be shared. Now there’s a positive message to end the year.