As I See It: Terry Murden
What a difference a couple of weeks make. Only last month the Fraser of Allander Institute and Scottish Chambers were delivering a downbeat message on the outlook for Scottish business. “Confidence levels remain weak.. and on a downward trajectory”, they said in a survey published on 23 January. Today, the Institute is telling us that confidence is on the rise.
Such are the perils of testing business sentiment either side of a general election. The earlier poll was conducted in the run-up to the election, but published after it. Business opinion was bound to be coloured by uncertainty over the outcome.
The timing looks misjudged and may be regretted given that decisions and policies are made on the back of surveys which are required to give some reliable pointers.
Today’s more optimistic Scottish Business Monitor by the Institute and law firm Addleshaw Goddard, is in line with other surveys published since the election. Crucially, it is issued on the day of the Scottish Budget – more reason for it to be an accurate reflection of the mood across the business community.
The more positive sentiment has continued this week with the Purchasing Managers Index showing showing a pick-up in UK services and manufacturing activity to a 16-month high in January. The turnaround in the outlook also persuaded the Bank of England against a much-anticipated cut in interest rates.
Whether this lift in business spirits will be reflected in today’s Scottish Budget will become clearer this afternoon. Somehow, I doubt it. The SNP is still in full Brexit gloom mode, claiming it will impact negatively on everything from the cost of living to attendance by performers at the Celtic Connections music festival.
Signs that the economy is picking up, that business is becoming more optimistic, and even believes Brexit uncertainties are lifting, do not play well for the SNP which benefits from Westminster failures and has enjoyed a lift in its own fortunes on the back of its constant warnings of armageddon over Britain’s withdrawal from the EU.
An added danger is that business and higher rate tax payers will once again be plundered to fill gaps in funding vital services, rather than accept that the Scottish government should learn to live within its means, spend less time on constitutional grandstanding, and do more to encourage growth in the economy.