Gloomy message on Scots economy

http://news.bbc.co.uk/go/rss/-/1/hi/scotland/7801185.stm

Version 0 of 1.

Next year will be "incredibly difficult" for Scotland's economy, a business group has predicted.

The Scottish Council for Development and Industry said it was expected 2009 would be the first year of negative growth for almost three decades.

The economic slowdown in the UK has seen well known stores such as Woolworths closing their doors.

Dr Lesley Sawyers, the body's chief executive, said there would be more high-profile casualties in 2009.

But she also said Scotland had been through tough economic times before and added the country could come out the other end "stronger than before".

In her New Year's message Dr Sawyers warned: "2009 will be an incredibly difficult year for Scotland and the Scottish economy.

Scotland has been through tough economic times before, and adapted and re-invented itself to the new realities, t his time will be no different Dr Lesley Sawyers "Economic indicators all point to the first year of negative growth in Scotland since 1980, and it is likely that there will be more high profile casualties of the economic slowdown."

Dr Sawyers said governments would need to work together with industry to limit the impact of the slowdown, stating: "We need to rewrite the rule book in the private and public sector to ensure we capitalise on every opportunity to maximise the impact of every enterprise scheme, loan or grant, and do more to support local business and companies."

She called for continued investment in people and skills to help ensure that "we are first out of the starting blocks" when the economy improves.

So far, Dr Sawyers said, the UK and Scottish governments had responded positively to the economic crisis and had shown international leadership.

But she added "more brave decisions will be necessary" and called for further interest rate cuts early in the New Year, with an increase in the amount of money printed in a bid to boost spending.

'New realities'

Dr Sawyers also made a fresh call for the Scottish Government to halt plans to replace the council tax with a local income tax.

She said she hoped the government would be brave enough to drop its proposals.

A government spokesperson said a local income tax would be cheaper than the council tax - which costs about £62m to collect and administer.

The SNP administration believes that a successful Scotland would continue to attract people to for all the right reasons, including having the lowest local tax in the UK.

Dr Sawyers added: "Scotland has been through tough economic times before, and adapted and re-invented itself to the new realities.

"This time will be no different, and with a strong devolved government and parliament, and world leading private and public sector organisations we will come out of the recession stronger than before."