On Wednesday of this week - 9 December- the Office for National Statistics (ONS) published its annual update of Gross Value Added (GVA) and GVA per head for the Nomenclature of Units for Territorial Statistics (NUTS) 1, 2 and 3 regions and nations of the UK. This is a useful exercise although there are technical issues to be confronted in the construction of estimates of GVA across the UK regions and territories. The present data series is constructed using household income data, later this month - on 16 December to be precise - ONS will publish GVA estimates based on counting produced output: the two do not always produce the same result! A further point is that GVA is much the same as GDP. I won't go into the difference.
Anyway technical issues aside, I was interested to read In the Herald that Stewart Hosie, the SNP’s deputy leader and economic spokesman, in commenting on the publication had said
“Today’s ONS figures show, once again, that Scotland continues to punch above its weight in its contribution to the UK economy. The strong showing for Scotland is testament to the successful economic policies of the SNP Government from crucial infrastructure investment to vital support for small businesses.This has resulted in record numbers of registered businesses in Scotland, increased productivity, growing value of international exports, and record employment.”
I read these comments before I had chance to look at the ONS data. So, I thought: "That's interesting. If Scotland is 'punching above its weight it must mean that we are generating more income than our size (equals weight?) would warrant. The main indicator of a territories size is population, so according to Mr Hosie GVA per head in Scotland must now be higher than the UK. And, this might be due to SNP Government policy"
I rushed to look at the data and the chart below is what I found:
So, the chart reveals that on a reasonable definition of "punching above its weight" Scotland lags behind the UK as a whole. Indeed, the relative is lower than it was in 1997. It is lower than it was at the trough of the recession in 2009 but the high point of 97.2 was due principally to the recession being stronger in the UK than in Scotland. Between 2009 and 2012, the Scottish relative fell as the recovery from recession in UK GDP was faster than in Scotland. After 2012 the Scottish recovery picked up and so the relative rose a bit.
But there's little in these data to suggest that Scotland has exhibited a "strong showing" at all. It is true that Scotland moved into third position in the GVA per head rankings in 2013 just ahead of East England as the recovery in Scotland strengthened and this might have been influenced by SNP government policy in prioritising investment spending and the pick up in construction activity here. But as the chart below shows all regions and nations appear to have lost out to London during the recovery. If Scotland has managed to achieve "record numbers of registered businesses in Scotland, increased productivity, growing value of international exports, and record employment", which I think is not wholly supported by the data, it has not registered much, if at all, in the GVA relative and certainly could not lead one to conclude that Scotland is "punching above its weight."
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