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Nicola Sturgeon says tackle inequality to create prosperity Sturgeon says new strategy will see Scotland competing with Europe's best
(about 3 hours later)
Tackling inequality would generate £1,600 more per head of population, according to the Scottish government. Scotland's First Minister Nicola Sturgeon has said her government's new economic plan will allow the country to compete with the best in Europe.
In a speech later, Nicola Sturgeon will highlight new analysis of research by the Organisation of Economic Cooperation and Development (OECD). During a speech in Linlithgow, she outlined the twin-track approach of increasing competitiveness while halting inequality.
The first minister will argue that policies which are fair and equal will lead to greater prosperity. The last Scottish government economic strategy was published in 2007.
The UK government has insisted its austerity policies have led to record employment levels in Scotland. However, the UK government has insisted its austerity policies are working and have resulted in more Scottish jobs.
Setting out Scotland's economic strategy, Ms Sturgeon will say that the true cost of inequality and austerity can no longer be ignored. Ms Sturgeon told the gathering that productivity "was the key" to "any sustainable long-term improvement in living standards".
The Scottish government has looked at recent OECD research and said the UK GDP could have been nearly £100bn higher in 2010 had the UK economy been more equal in the previous decade. This equates to about £1,600 per person. Holding the 84-page document, titled Scotland's Economic Strategy (March 2015), she explained: "When we published the first Scottish government economic strategy back in 2007, Scotland's productivity then was 6% below that of the rest of the UK.
Ms Sturgeon will argue that by becoming a fairer society, Scotland will also become a more productive and more prosperous society. "The gap with the rest of the UK has reduced significantly since then, but we are still some 13% below Sweden and 20% below Germany. So we need to do much more.
"That is why we want to focus on closing the gap with the very best in Europe and that really matters."
She added that if Scotland increased productivity by 0.1% a year it could:
Ms Sturgeon said that in order for those figures to be realised there was a need to invest in infrastructure and skills, "in contrast to the UK's government deep and and harmful cuts in public spending".
She believed there was a need to support innovations that lead to new technology, new products and new ways of working.
The SNP leader added: "And yes we need to tackle inequality.
"Scotland is, I am very proud to say now, leading the way for putting the quest for putting equality at the heart - not just of our social strategy - but at the heart also of our economic strategy.
"We will promote fair work and a living wage; we will encourage more women and disabled people into the labour market, we will make the key investment in health and educational attainment to enable us to better tackle intergenerational poverty and ensure the benefits of growth are felt across out cities and our towns and our rural areas."
Ms Sturgeons said the approach of "promoting equality and competitiveness together is two sides of the same coin - it is in itself innovative, but it is also in tune with a growing international consensus".
She went on to cite International Monetary Fund research work which examined 173 countries over 50 years.
'Fairest nation'
Ms Sturgeon said it showed that more unequal countries also tended to have lower, and less durable economic growth.
Scottish Labour said the first minister was "right to point out appalling inequality in Scotland".Scottish Labour said the first minister was "right to point out appalling inequality in Scotland".
MSP Jackie Baillie said her party had a powerful vision for making Scotland a "better and fairer country".MSP Jackie Baillie said her party had a powerful vision for making Scotland a "better and fairer country".
Scottish Secretary Alistair Carmichael had previously accused Ms Sturgeon of "trying to turn good news into bad" by suggesting the UK economy was performing poorly when in fact it was "growing strongly". She added: "Scottish Labour has a plan to make Scotland the fairest nation on earth.
"We will make work pay for all Scots by calling time on zero hours contracts, using the mansion tax to invest in our NHS and raising the minimum wage for those in work.
"We have also set out how we would close the attainment gap by investing £125m to support working class kids who have been left behind by the SNP government in Edinburgh."
Scottish Secretary Alistair Carmichael previously accused Ms Sturgeon of "trying to turn good news into bad" by suggesting the UK economy was performing poorly when in fact it was "growing strongly".
Take two views...Take two views...
Ben Southwood, head of research for the Adam Smith InstituteBen Southwood, head of research for the Adam Smith Institute
"We can achieve economic growth and inequality in an economic strategy but we have to be very carefully about what measures we use. "We can achieve economic growth and inequality in an economic strategy but we have to be very careful about what measures we use.
"So, it does seem that the poorer counties in the world are unequal as well whereas the richer countries are more unequal, but that doesn't necessarily mean that reducing inequality lets you get richer."So, it does seem that the poorer counties in the world are unequal as well whereas the richer countries are more unequal, but that doesn't necessarily mean that reducing inequality lets you get richer.
"In fact what we tend to see is first you grow very fast become more unequal and then young carry on growing and everybody else catches up. "In fact what we tend to see is first you grow very fast, become more unequal, and then young carry on growing and everybody else catches up.
"Redistributing wealth is very important for alleviating poverty but in the long run it has barely lifted anyone out of poverty compared to amount economic growth has lifted out of poverty."Redistributing wealth is very important for alleviating poverty but in the long run it has barely lifted anyone out of poverty compared to amount economic growth has lifted out of poverty.
"Economic growth has lifted billions of people are around the world out of poverty, redistribution has lifted millions of people out of poverty. Redistribution is important but it isn't nearly as important as growth and we should always be focusing on growth.""Economic growth has lifted billions of people are around the world out of poverty, redistribution has lifted millions of people out of poverty. Redistribution is important but it isn't nearly as important as growth and we should always be focusing on growth."
Morag Gillespie, a senior research fellow at Glasgow Caledonian University's Women in Scotland's Economy groupMorag Gillespie, a senior research fellow at Glasgow Caledonian University's Women in Scotland's Economy group
"Once you have a level of growth, and the UK and the United States are well past that, then you start to get diminishing returns from simply focussing on growth alone. "Once you have a level of growth, and the UK and the United States are well past that, then you start to get diminishing returns from simply focusing on growth alone.
"And I absolutely agree with Nicola Sturgeon, I think it is essential that we pursue equality as part of our economic strategy."And I absolutely agree with Nicola Sturgeon, I think it is essential that we pursue equality as part of our economic strategy.
"And if you look at some of the richer nations across the world you will see that some of them are much more equal than others and it isn't to do with how long they have been growing, or how much growth they have had, but how much they focus in ensuring that all the people of the country can benefit from economic growth and it isn't just a few people that profit."And if you look at some of the richer nations across the world you will see that some of them are much more equal than others and it isn't to do with how long they have been growing, or how much growth they have had, but how much they focus in ensuring that all the people of the country can benefit from economic growth and it isn't just a few people that profit.
"One of the things that we really, really need to tackle in Scotland is that the jobs being created are better paying jobs and that we are not just creating minimum wage jobs, that we don't have more and more people working in really exploitative work situations, such as zero hours contracts, temporary employment, and that we tackle the really high levels we have of under employment.""One of the things that we really, really need to tackle in Scotland is that the jobs being created are better paying jobs and that we are not just creating minimum wage jobs, that we don't have more and more people working in really exploitative work situations, such as zero hours contracts, temporary employment, and that we tackle the really high levels we have of under employment."