War of words over Scottish economy (Part 28)

Swinney: ‘Stark reality of UK budget cuts revealed’

Alexander: ‘being part of the United Kingdom brings true benefits’

Westminster and Holyrood finance spokesmen yesterday offered very different views on what last week’s Budget will mean for Scotland:

Speaking ahead of yesterday’s Conservative finance debate, Finance Secretary John Swinney expressed concern over the impact the UK Government’s Budget changes are having on the most vulnerable in society.

Mr Swinney said: “Treasury analysis shows that as a result of Westminster’s tax rises and benefit and public service cuts, the poorest 20% of households will be on average the equivalent of £814 worse off in 2015-16.

“Analysis of the current UK Government’s Budget changes to date, including Budget 2014, also shows that on average households will be worse off by the equivalent of £757 a year in 2015-16 as a result of changes to taxation, benefits and public services brought in by Westminster, while, when it comes to changes made to taxes, tax credit and benefits alone, those in the bottom 10% of income distribution are expected to see some of the largest losses as a percentage of their income.

“These figures are extremely concerning and impact on the most vulnerable in our society. Such drastic cuts to incomes and to services put the progress that has been made in tackling poverty at risk. As the Child Poverty Action Group has warned, these cuts coming from Westminster risk pushing a further 100,000 children into poverty by 2020.

“Those arguing for the status quo should consider the harm being done to households across the country as a result of Westminster budgets.

“The Scottish Government is committed to mitigating the harmful effects of Westminster welfare reforms and our social wage helps households during difficult times. However to respond to the key challenges of building a sustainable and secure economy, creating jobs and growing the working population, protecting public services, maintaining a decent social security system and closing the gap between rich and poor we need the powers of independence.”

With fewer than 200 days to go until the Scottish referendum, the UK Government yesterday produced the latest edition in a series of information packs – focussing on money and the economy in the context of the independence debate.

Visit the Scottish referendum page for more information

Danny Alexander, Chief Secretary to the Treasury, said: “As part of the UK the Scottish economy is growing, inflation is down and more people are in work. By remaining part of the UK, Scottish industry and jobs will be protected by the generous freeze on duties on spirits and the £3bn tax break for oil and gas industries we announced at the Budget, as well as the big cuts in income tax helping 2 million Scottish workers.

“This new pack sets out some key facts people in Scotland need to know before the referendum in September. I urge everyone to read up on the facts and understand the true benefits being part of the United Kingdom brings to Scotland.”

The UK Government Money & Economy pack highlights the following key facts, demonstrating that a United Kingdom makes for a stronger economy benefitting us all:

United means shared economic success. Following the financial crisis both the UK and Scottish economies are growing again and employment is at its highest ever level.
United means we benefit from a single, domestic market, and a truly borderless economy. This means people and businesses in Scotland can buy and sell goods and services freely with the rest of the UK. Creating a border would reduce trade and cost jobs.
United means we pool resources and share risks, which helps us prosper. Being part of the UK’s broader tax base means the peaks and troughs in oil and gas receipts are evened out so public spending remains stable.
United means our finances are more secure. During the financial crisis, the banking system received extraordinary support, which was only possible due to the scale of the UK. If Scotland were an independent country, its banking sector would over 12 times the size of its economy. Not even the Icelandic, Irish or Cypriot banking sectors were that big at the height of the financial crisis.
Going it alone could be costly: The National Institute of Economic and Social Research has assessed that Scottish interest rates could be up to 1.7% higher than the continuing UK, which could cost homeowners in Scotland an extra £1,700 to an annual mortgage payment.
Spending matters: Last year Scotland received around £1,300 more public spending per person than the UK average.

For more information and to access the material go to: www.gov.uk/scottishreferendum

The Money & Economy Pack is the second in a series of packs produced b the UK Government highlighting the benefits of Scotland remaining in the UK. The aim is to provide voters with clear and accurate information to help them make an informed decision ahead of the Scottish independence referendum in September 2014.

The material comes in a factsheet-style format and complements the more detailed Scotland Analysis series, which contains in-depth analysis of the benefits of a United Kingdom.

Gloves come off over currency union

A currency union in the event of a vote for independence ‘would not be in the interests of either the people of Scotland or the remaining UK’, Chancellor of the Exchequer George Osborne told an Edinburgh audience on Thursday. Unsurprisingly his claims have been rubbished by supporters of independence, but while the two sides disagree over currency union, one thing is clear – the gloves are well and truly off …

Mr Osborne’s speech follows official Treasury advice that in the event of independence they would not recommend a currency union to the Government of the continuing UK, and in an unusual departure from procedure he also published the advice he received from the Treasury Permanent Secretary on whether to join a currency union should Scotland become independent.

Speaking at the Point Hotel on Thursday, the Chancellor said: “I hope passionately that the people of Scotland choose to stay within our family of nations in the United Kingdom. I want Scotland to keep the pound and the economic security that it brings. But it is clear to me I could not as Chancellor recommend that we could share the pound with an independent Scotland. The evidence shows it wouldn’t work. It would cost jobs and cost money and wouldn’t provide economic security for Scotland or for the rest of the UK.I don’t think any other Chancellor of the Exchequer would come to a different view.

“The Scottish government says that if Scotland becomes independent there will be a currency union and Scotland will share the pound. People need to know – that is not going to happen.”

The Treasury also published the detailed analysis on the economics of a currency union which underpins its advice to the Chancellor. The paper states that while the United Kingdom is one of the most successful monetary, fiscal and political unions in history, the fiscal and financial risks of entering into a currency union with a separate Scottish state would be too great.

The analysis states:

UK is a successful union because taxation, spending, monetary policy and financial stability policy are coordinated across the whole UK, with risks pooled and clear political accountability

Scotland’s economy would be more exposed in the event of independence, with greater risks from shocks in the financial and energy sectors
in a currency union, the continuing UK would be exposed to much greater risk from a separate Scotland, with the possibility of continuing UK taxpayers being asked to support that state in the event of a fiscal or financial shock
if people in Scotland vote for independence, the Treasury would advise the continuing UK Government against entering into a currency union with an independent Scotland

The Chancellor’s view was supported by the finance spokespersons of both the other main Westminster parties.

The announcement was also welcomed by the Better Together campaign. Former Chancellor Alistair Darling, who leads the campaign, said: “If we vote to leave the UK in September, Scotland will not be able to keep the pound. That is the message Scotland must keep in mind when deciding how to vote. This was the day on which Alex Salmond’s bluff and bluster about independence came face to face with reality.

“Why would taxpayers in England want to bail out the banks of what would be a foreign country? Why would a continuing UK Treasury accept a veto from what would be a foreign government over tax, spending and borrowing?

“And why would Scotland agree to have its budget subject to a veto by the rest of the UK? That’s how a currency union works. You only have to look at the problems of the eurozone to see that. It makes little sense. Yet everything about the First Minister’s case for breaking up the UK rests on keeping the pound. The jobs of thousands of Scots in our financial services industry depend on using the pound. Without the pound, all of these are at risk. That is a big gamble we simply don’t have to take.”

The Better Together campaign called on Yes Scotland to explain what currency Scotland would use if we vote to leave the UK – would we join the euro, or maybe even set up a new, separate currency? Put simply, if yer no’ gettin’ the pound, what’s your Plan B?

Calling for clarity, Better Together campaign director Blair McDougall said:

“The nationalists have been in chaos on currency over the last few days. Alex Salmond is a man without a plan. First he says we will keep the Pound, even though it is now clearly off the table. Now Yes Scotland tell us we can keep the Pound without a formal agreement, even though the SNP’s own Fiscal Commission Working Group ruled this out. And Patrick Harvie, a Yes Scotland board member, today said that Alex Salmond needs to set out an alternative to the Pound.

“It is time they got their line straight. If Plan B really is the Panama plan that would mean if something like the collapse of RBS happened again a crisis would become a disaster in an independent Scotland.

“Leaving the UK and losing the Pound would mean higher mortgage repayments, more expensive credit card bills and a big risk to thousands of jobs in our financial services industry. Alex Salmond is gambling with the livelihoods of the people of Scotland.

“The message from those of us who support Scotland remaining in the UK is very simple – a vote for separation is a vote to lose the Pound. The only way to keep the Pound is to stay in the UK.”

However, supporters of independence have cast doubt on the Chancellor’s assertions. First Minister Alex Salmond accused Mr Osborne of ‘bluff, bluster and bullying’ and former Labour Scottish First Minister Henry McLeish also expressed concern over Osborne’s ‘misguided’ intervention, saying the Chancellor’s heavy-handed tactics could push more Scots into voting Yes.

Mr McLeish said: “He is basically saying vote yes and we won’t allow you to join a currency union. We will withdraw any goodwill and sacrifice the best interests of Scotland, England, Northern Ireland and Wales.

“Do we really believe that would be the response if Scotland voted to exit the Union? I don’t think so. Wisdom and sanity would return. It would help if the Union would spell out their vision, provide an alternative to independence and offer a bit more carrot and less stick to Scots voters.

“Let’s remember that Osborne’s party want to take us out of the EU. It is the Union that is on trial, not Scotland. Creating a currency union is first and foremost a political decision, not a financial or technical one.

The UK and Scotland would have to settle the politics of this in their respective parliaments or at the polls, so the people of England, Wales and Northern Ireland could have a say in this significant decision.”

Scottish Finance Secretary John Swinney maintains that an independent Scotland will continue to use the pound as it is in the best interests of Scotland and the rest of the UK .

Responding to the Chancellor’s comments on a currency union, the Finance Secretary said that the Treasury analysis has been developed without any discussion with the Scottish Government – and without acknowledging the independent expert work of the Fiscal Commission Working Group (FCWG).

The Scottish Government last year published comprehensive analysis of the different currency options available to an independent Scotland. This analysis by the Fiscal Commission Working Group, consisting of four pre-eminent economists including two Nobel laureates, considered the full range of options and concluded that a monetary union would be in the best interests of Scotland and the rest of the UK.

The Fiscal Commission provided advice on:

Banking union
Risk sharing
Monetary and exchange rate policy
Duration of a currency union

The HM Treasury has had no discussion with the Scottish Government on any of these points.

Responding to the Chancellor’s comments, Mr Swinney said:

“We welcome the opportunity to continue the debate with the Chancellor on the merits of our proposals on a currency union.

“However the Chancellor made clear his conclusions on currency union were based on the advice of Treasury officials. That advice is incomplete and with regard to the size of the Scottish financial sector and operation of monetary unions is backward looking and takes no account of the comprehensive evidence provided by the independent economic experts of the Fiscal Commission, including two Nobel laureates, Professor James Mirrlees and Professor Joseph Stiglitz.

“On every one of the four points the Chancellor rehearsed today, the FCWG have already published comprehensive advice and analysis and their proposed macroeconomic framework is a workable model that would ensure financial stability and allow both governments autonomy over economic and social policies, including fiscal policy. In addition the Governor of the Bank of England has confirmed the Bank will deliver a currency union if agreed by both Governments.

“On the banking union: no country should have to bail out banks again. Across the EU and UK recent regulation has been designed to break the link between taxpayers and banks. The Treasury hugely overstates the size of the banking sector in Scotland which is in line with the rest of the UK. It is the City of London which is hugely reliant on the financial services sector, accounting for 50 per cent of UK financial services GVA. A banking union with an independent Scotland is in the interests of the rest of the UK as the sector benefits from integrated trade.

“On fiscal risk sharing: Scotland’s fiscal position is stronger than that of the UK. An independent Scotland would have had the opportunity to spend more, tax less, invest in an oil fund and still borrow proportionally less than the UK. The Fiscal Commission proposition ensures a harmonised system for financial regulation and resolution of banks. Scotland would take its fair share of responsibility recognising that ‘both Scotland and the UK have a shared interest in ensuring financial stability’.

“On monetary and exchange rate policy: Scotland would have full fiscal and economic freedom to set taxes and economic policy, as has been shown by many countries in the different currency unions which have operated internationally.

“And on permanence; all Sovereign states have the ability to determine currency arrangements that are appropriate for their circumstances. That is not a barrier to successful currency unions.

“The model proposed by the Fiscal Commission Working Group has not been considered and the Chancellor’s statement today is political and completely counter to the spirit of the Edinburgh Agreement, which commits both Governments to working in the best interests of both countries whatever the result of the referendum.

“If the UK Government is to honour its commitment to the terms of the Edinburgh Agreement, the discussion that the Chancellor has entered into today must be informed by the best evidence available. The Fiscal Commission have recommended early engagement between the Scottish and UK Government to properly address these critical issues. The gaps in the Chancellor’s analysis demonstrates the force of that recommendation.”

So there you have the two sides of the currency union divide. The Unionists say it can’t and won’t happen, the Nationalists say it can and it will. Political panic over narrowing poll leads, or a pie in the sky economic gamble?

You pays your money, you takes your choice. For now at least, that money is sterling.

Government set to act on pay day lenders

The Westminster government is to introduce legislation to cap the cost of payday loans. In a move that’s likely to be welcomed by campaigners, the Treasury says there is “growing evidence” in support of the move.

The cap will be included in the Banking Reform Bill, which is currently going through Parliament, and the level of the cap will be decided by the new regulator the Financial Conduct Authority (FCA).

Chancellor George Osborne told the BBC there will be controls on charges – things like arrangement and penalty fees – as well as on interest rates. “It will not just be an interest rate cap, you’ve got to cap the overall cost of credit,” he said.

Although the level of the cap is yet to be determined, the announcement will be welcomed by opposition and campaign groups who have been urging the government to take action against some pay-day lenders’ practices: eye-watering interest rates and hidden charges which hit the poorest hardest and drive desperate people deeper into debt.

Just last week, Citizens Advice Scotland claimed that many payday lenders in Scotland are breaking the promises they made last year to clean up their act. According to CAS research, lenders continued to break ‘most of the pledges in their own code.’

The main points were:

less than half of payday lenders in Scotland are telling people that loans should not be used for long-term financial problems;
only 1 in 3 are checking peoples’ financial background before giving them a loan;
only 14% of customers felt the lender was sympathetic when they got into difficulties repaying the loan; and
only a third of lenders are warning their customers about the dangers of roll-over loans.

CAS Chief Executive Margaret Lynch said: “When the payday lenders published this voluntary code last year we made clear we would be watching them like a hawk to make sure they kept to their word. Because there’s no point making promises if you don’t live up to them.

“Our survey results – together with the experience of other clients we see every day in the CAB – show very clearly that this Code of Conduct Is being ignored repeatedly.

“Across Scotland, CAB advisers are currently seeing over 100 cases every week of people who are in crisis debt to a payday lender. That’s a third higher than this time last year. Our evidence is that many lenders are operating in ways that result in people getting into debts they can’t handle.

“So the Payday Lenders have had their chance to clean up the industry, and they have failed. It’s time now for the regulators to step in and do it properly.”

Green shoots? Scotland’s economy ‘gaining momentum’

What with welfare cuts, payday loans, food banks, escalating prices and zero-hour employment contracts it’s maybe hard to believe that things really are getting better, but an increasing number of indicators suggest that the economy is starting to pick up and that a recovery – however fragile – is under way at last.

House sales are on the rise, retail sales are picking up, there is growing consumer confidence and employers and business leaders are cautiously optimistic that the worst is now behind us.

Scotland’s economy is “gaining momentum”, according to a new report published yesterday. The latest State of the Economy report provides an analysis of recent economic developments in Scotland and the wider global economy. The report also looks at recent labour productivity trends in Scotland.

The report highlights improvements in both output growth and employment in Scotland’s economy over the last year. Chief Economist Dr Gary Gillespie describes a more positive environment for Scotland and its key trading partners, which can support a more sustained pick-up in investment, exports and growth.

Key points in the report include:

Growing signs of a global recovery starting to take root in 2013, especially when compared to a disappointing 2012.
Over the year, Scotland has seen growth in output and a general improvement in all headline labour market indicators.
In contrast to the UK where productivity measures have fallen during the recession, output per hour worked (the key measure of labour productivity) in Scotland has risen and is now approximately 3.5% above pre-recession levels.
A permanent improvement in productivity in Scotland would allow for potentially stronger growth in Scotland once demand returns to previous levels. This growth in output will be required to see a sustained recovery in the labour market, particularly in full-time employment, and to support improvement in real wages.
Recent output growth and analysis of the underlying nature of the recession in Scotland suggest the potential for Scotland’s recovery to take hold throughout 2013, with a return to pre-recession levels in 2014 across the economy as a whole.

Commenting on the report Finance Secretary John Swinney said:

“Though headwinds still remain, the general outlook for Scotland is of an improving picture through 2013 with the recovery strengthening in 2014.

“Recent economic indicators have seen Scotland outperforming the UK both in terms of output and with higher rates of employment and lower rates of unemployment and inactivity. The most recent GDP data shows that the Scottish economy grew by 1.2 per cent over the year to Q1 2013 compared to 0.3 per cent in the UK.

“Today’s report confirms these positive trends. This analysis suggests that the global economic outlook will continue to improve this year and Scotland can make the most of the opportunities that will come our way as a result.

“Particularly encouraging is the recovery in productivity which is now above pre-recession levels, which if sustained should lead to a further improvement in both output and the labour market.”

Unsurprisingly Mr Swinney believes that independence would ensure a stronger Scottish economy. He went on:

“While the State of the Economy report highlights the opportunities for Scotland, it also underlines the fragility of the recovery across the UK. We will continue to press the UK Government to take action to help our businesses move forward and, in turn, drive growth in the economy.

“With the full economic levers of independence we could do more to put Scotland more securely on the road to recovery.”

Is the future looking brighter? Do you feel more optimistic?

Let us know!

The gloves are off: Osborne and Swinney in fight over money

In the latest of what promises to be a long series of cross-border skirmishes two political heavyweights squared up to each other over Scotland’s future currency yesterday. In the red (white and blue) corner we had Westminster’s George Osborne while in the blue (and white) we had Holyrood’s John Swinney.

Old Etonian ‘Gentleman George’ Osborne is well versed in the Marquis of Queensberry Rules but ‘Slugger’ Swinney is a capable street scrapper; in a bruising contest of contrasting styles neither fighter landed a knock out blow, so there’s sure to be a rematch soon. And it’s no clearer whether we’ll be spending pounds, euros or even dollars here in Scotland after next year’s referendum

Scotland_currency_IG

The clash came following the publication of a report on Scotland’s currency and monetary policy, helpfully produced by the Westminster government to ‘inform the debate on Scotland’s constitutional future’, launched by Chancellor of the Exchequer, George Osborne, and Chief Secretary to the Treasury Danny Alexander in Glasgow yesterday.

The report reviews how the current UK currency and monetary policy arrangements work and examines the options in the event of independence. The analysis sets out in detail the advantages and disadvantages of the potential currency options open to an independent Scotland, including: a formal sterling currency union with the continuing United Kingdom; using sterling unilaterally, with no formal agreement; joining the euro; or introducing a new Scottish currency.

The paper concludes that none of the options under independence would serve Scotland as well as the current arrangements in the United Kingdom, which is one of the most successful monetary, fiscal and political unions in history.

All of the alternative currency arrangements would be likely to be less economically suitable for both Scotland and the rest of the United Kingdom.

Speaking during his Glasgow visit Chancellor George Osborne (pictured above) said it would be a “very deep dive into uncharted waters” if an independent Scotland kept the pound in a currency pact with the UK, and added that there was no guarantee that the UK and Scotland would be able to come to an agreement on a currency union. That would mean a separate Scotland was left with three options – unilaterally keeping the pound, creating a Scottish currency or joining the euro.

Mr Osborne said: “All of these alternative currency arrangements are less suitable economically than we have now for both Scotland and the rest of the UK. The fundamental political question this analysis provokes is this – why would 58 million citizens give away some of their sovereignty over monetary and potentially other economic policy to five million people in another state?

He added: “Let’s be clear – abandoning current arrangements would represent a very deep dive indeed into uncharted waters. Would a newly independent Scottish state be prepared to accept significant limits on it’s economic sovereignty? To submit it’s economic plans to Westminster before Holyrood? The only way to be sure of keeping the pound as Scotland’s currency is to stay in the UK.”

However the Scottish Government has commissioned it’s own study and believes that a Sterling zone monetary union is the best option for an independent Scotland.

The Scottish Government’s currency paper, also published yesterday, fully endorses the findings of the Fiscal Commission Working Group’s expert report that as an independent country in a Sterling zone Scotland would have the powers needed to exploit areas of comparative advantage and also tackle those areas where we need to improve performance.

Scottish Government – Currency

Commenting on the paper, Finance Secretary John Swinney (pictured below) said: “A Sterling zone, with the pound as a shared currency will provide the full flexibility to set tax and spending decisions to target key opportunities and challenges in Scotland.

“The sharing of the pound between an independent Scotland and the rest of the UK is the common sense position supported by the Fiscal Commission. A sterling zone is also in the overwhelming economic interests of the rest of the UK every bit as much as it is in the interests of Scotland. An independent Scotland using the pound will mean Sterling’s balance of payments will be massively supported by Scotland’s huge assets, including North Sea oil and gas – which alone swelled the UK’s balance of payments by £40 billion in 2011-12.

“The Fiscal Commission Working Group includes two Nobel Laureates, and their expert report – having examined several possible currency options – concluded that sharing Sterling with the rest of the UK is the best option, offering freedom and flexibility for Scotland to develop our own taxation and spending policies to boost growth and address inequality. At present, the Scottish Parliament controls just seven per cent of Scotland’s revenue base, and that would only increase to 15 per cent under the terms of the Scotland Act. With independence, Scotland will control 100 per cent of our revenues, which is what it needs to be to build a stronger economy and fairer society.‪

“The combination – which only comes with independence – of keeping the pound, accessing Scotland’s abundant resources, and taking decisions on tax and other economic policies that are right for Scotland, is the best way to boost jobs and growth.

‪“Scotland’s finances are consistently stronger than the UK’s – generating more revenue per head than the rest of the UK in each one of the past 30 years – and Scotland has had a lower fiscal deficit than the UK over the past five years. With the additional economic levers that independence will provide, and the up to £1.5 trillion asset base provided by Scotland’s oil and gas reserves, an independent Scotland will stand on a strong financial footing.

“Next year’s vote is the choice between unlocking the opportunities independence will open up or continuing to allow economic and welfare policy to be set by a Westminster system that isn’t working for Scotland.”

A deep dive into uncharted waters, or unlocking opportunities? Ultimately, you’ll decide next autumn.

Scots shops still in doldrums despite slight UK recovery

Scotland is lagging behind the UK as a whole in the number of shoppers being attracted to retail outlets, according to a new report. Scottish Retail Consortium says that February’s total retail footfall was down 2.5% in Scotland compared to last year, while the UK as a whole managed an average increase of 0.8% over the same period.

Only North England and Yorkshire (down 2.7%) fared worse than Scotland in the survey, and Scottish Retail Consortium director Fiona Moriarty believes that the disappointing Scottish figures reflect low levels of consumer confidence and lower levels of sales growth.

“Although February’s sales figures showed some encouraging signs of improvement, we are reminded that the economic and trading environment remains fragile,” she said. “Scottish retailers will be hoping that the arrival of spring and seasonal lifts from Mother’s Day and Easter help to elevate this underwhelming figure into more positive territory in the coming months.”

The report confirms the tough conditions faced by retailers across the country. Recent research by PwC and the Local Data Company revealed that the number of stores closed by retail chains soared over the past twelve months, with major chains shutting an average of twenty shops a day last year. That figure increased in the last three months of 2012 as a spate of big household names went into administration.

The face of the High Street is changing – shops selling products like CDs and computer games, cards and clothes are closing, often being replaced by payday loan providers, pawnbrokers and pound stores. The PwC survey found a reduction of nearly 1,800 shops over 2012, a ten-fold increase on the year before – and more High Street chains fell into insolvency last year than ever before.

Latest figures estimate that as many as one in ten shops in Scotland is currently lying empty; just one more statistic for the Chancellor to consider as he puts the finishing touches to tomorrow’s Budget statement.

Council spearheads drive to create 20,000 jobs

The city council is calling on its public sector partners and Edinburgh’s businesses to help support the creation of 20,000 new jobs in the city. An ambitious five-year economic strategy for Edinburgh will be launched at a conference being hosted by the City of Edinburgh Council and the Edinburgh Business Forum this morning.

Businesses and other partners are being encouraged to join the Edinburgh Guarantee programme to give young people the apprenticeships and work opportunities they need to boost their job prospects. They are also being asked to get more involved in the city’s communities by investing in its social and community enterprises, act as ambassadors for Edinburgh and mentor new entrepreneurs.

City businesses are also being asked to share their knowledge and international connections with the Council to help attract vital new inward investment. Delegates at today’s event will be invited to contribute their ideas to help drive the strategy forward. The conference will be split into two sessions. The first will focus on outlining the national / local context and the second session will seek an endorsement from partners and will outline their role in taking forward delivery of the Strategy.

The sessions will be attended by business leaders including Lord Smith Chair of the UK Green Investment Bank, senior staff from Harvey Nichols in Edinburgh, Scottish Enterprise, Marketing Edinburgh, the Financial Times, Edinburgh BioQuarter, and Mama Tea. The Leader of the Council Andrew Burns and Chief Executive Sue Bruce are both speakers as well as Nicola Sturgeon, Deputy First Minister and Cabinet Secretary for Infrastructure, Investment and Cities. Robert Carr, past Chairman of the Edinburgh Chamber of Commerce will compère the event.

Speaking before the conference, Council Leader Andrew Burns said: “Scotland’s cities and their regions are key drivers of economic growth for the nation’s economy as a whole, so it’s really important that Edinburgh’s Economic Strategy is not just owned by the council, but by the whole of Team Scotland. Edinburgh was resilient during the banking crisis and has bounced back well, but in tough economic times the last thing we want to do is get complacent. With huge pressure on council resources, we need to invest where we will have the most impact and closing the jobs gap is absolutely our number one priority. Joblessness creates major social costs for the whole city, and tackling this issue head on now will help us lay the foundations for a new phase of growth in Edinburgh over the next ten to 20 years.”

Sue Bruce, Chief Executive of the City of Edinburgh Council said: “The new strategy will help us to invest in people and in places, to provide an excellent joined-up service to businesses and to pool our efforts with partners. We believe this is the best route to help create the right conditions for new jobs. The vision of the Edinburgh Guarantee, that all sectors of the city work together to ensure that every school leaver in Edinburgh will leave school with the choice of a job, training or further education opportunity open to them, is of vital importance to the future economic health of the city. Focusing on jobs, engaging the whole Council in economic development and increasing collaboration with our partners in the city are all central to delivering our bold targets to ensure that we play a major role in boosting Edinburgh’s economy.”

Hugh Rutherford, Chair of Edinburgh Business Forum and a partner at National Property and Planning Consultants, Montagu Evans said: “No one partner or organisation in the city has sufficient influence to drive development of the economy alone, so it is critically important that we pool our knowledge, expertise and resources to ensure Edinburgh remains an attractive place to do business. We want businesses to work with us to get people in the city back to work and that means engaging with the Economic Strategy to ensure sustainable economic growth.”

Further information on the Economic Strategy

Forged in the wake of the banking crisis, the Council’s new Economic Strategy is the first to focus on the Scottish capital and the part it plays in the wider regional and Scottish economy. It follows the largest and most wide-ranging economic analysis ever undertaken in the city.

The ‘Strategy for Jobs’ responds to a widening jobs gap – rapid growth in the working age population means that by 2018 there could be up to 37,000 more people looking for work in the city than jobs available – and sets out a pioneering ‘Whole Council’ approach to address this.

The Economic Strategy sets out three key targets for 2012-17: to support the creation and safeguarding of 20,000 jobs; to support £1.3 billion of infrastructure investment in the city and to help 10,000 people into work or learning.

These objectives will be achieved through four programmes of activity with detailed action plans: investing in the city’s physical development; supporting inward investment; supporting businesses and helping unemployed people into work or learning.

Key highlights include the completion of Edinburgh’s tram project; maximising low-carbon opportunities with the arrival in Edinburgh of the £1 billion UK Green Investment Bank; engaging with a target list of potential inward investors in key city regions of the Middle East, China, North America and London; the further development of the ‘Edinburgh Guarantee’, a collaborative initiative with businesses to secure training, education or employment for every school leaver in Edinburgh; the creation of a dedicated new hub for business customers at the City of Edinburgh Council’s headquarters; and the creation of ‘Integrated Employability Service’ that will work with national agencies to provide a ‘no wrong door’ approach for job seekers across Edinburgh. Extensive public consultation was carried out from July to September last year on a comprehensive analysis of Edinburgh’s economy – The Edinburgh City Region Economic Review. This was the largest and most wide-ranging consultation on the economy ever undertaken in the Capital. Its findings underpin the key areas of action in the new Economic Strategy.