JOHN Swinney has insisted Labour will only make the economy worse with a hike to employers’ National Insurance contributions after revised figures showed zero growth between July and September.
The First Minister said there were “other options” Labour could have chosen to repair the public finances but will instead “damage growth in jobs”.
The revised growth figures come after a series of disappointing statistics including inflation rising at its fastest pace for eight months and the economy shrinking in October.
Businesses have issued a stark warning to Rachel Reeves that the economy is “headed for the worst of worlds” next year with activity expected to fall sharply in the first three months of 2025.
A major survey by the Confederation of British Industry (CBI) found firms expected to reduce both output and hiring, with the Chancellor’s hike to employers’ National Insurance contributions highlighted as one of the reasons for a gloomy outlook.
Swinney said on Twitter/X that the figures and forecast show Labour are the “opposite of what Scotland needs”.
Sharing the latest economy assessment, he said: “This poor assessment of the UK economy will be made worse by the decision to increase employer’s National Insurance Contributions.
“Other options were available to repair the public finances. Labour chose one that will damage growth in jobs. The opposite of what Scotland needs.”
SNP MP Pete Wishart also said Labour had “failed” in their mission to get the economy back on course as he criticised the cut to the Winter Fuel Payment.
He posted: “All the pain inflicted on pensioners, families in poverty and farmers was to get the economy 'back on course'. They've even failed in that.”
Statisticians, who had previously estimated 0.1% growth for the quarter, partly blamed the reduction on fresh survey data showing weaker trading across bars and restaurants.
The ONS also revised down its growth reading for the second quarter of 2024, to 0.4%. In September, it said it thought GDP had increased by 0.5%, which was itself a reduction on previous estimates.
Reacting to the figures on Monday morning, Reeves said in a statement: “The challenge we face to fix our economy and properly fund our public finances after 15 years of neglect is huge.
“But this is only fuelling our fire to deliver for working people.
“The Budget and our plan for change will deliver sustainable long-term growth, putting more money in people’s pockets through increased investment and relentless reform.”
The CBI’s growth indicator survey, based on responses from 899 companies between November 25 and December 12, found expectations for growth are now at their weakest since November 2022 in the aftermath of Liz Truss’s chaotic tenure in No 10.
Alpesh Paleja, the CBI’s interim deputy chief economist, said: “There is little festive cheer in our latest surveys, which suggest that the economy is headed for the worst of all worlds – firms expect to reduce both output and hiring, and price growth expectations are getting firmer.”
