It looks like a(nother) decisive week in UK politics with the new chancellor Jeremy Hunt expected to make an emergency economic statement today in a bid to shore up confidence in the UK following the recent mini-budget.
Hunt was forced to defend the prime minister, Liz Truss, on television yesterday, following some sharp about-turns in economic policy over the past week and noises from a parliamentary party that seems to be questioning whether she should continue in a position she has held for not much more than a month.
Tomorrow will see the BBC celebrate its centenary and the Trades Union Congress begin its conference, which Labour leader Sir Keir Starmer will address on Thursday.
This morning’s View from the Street offers some timely reflections on the Scottish export industry, while we await the economic prospectus for an independent Scotland being published later today.
One observation which can be made about Scotland’s place in the world is that this position has never been stagnant. Over the past millennium, Scotland has been a leading medieval state, an international epicentre of culture and innovation, part of a 300-year-old union, represented in the European Union, an international capital for the extraction of fossil fuels (£), and now a leading advocate for loss and damage support to address the consequences of climate change.
As part of the UK, like many other sub-state nations across the world, Scotland has an international network designed, in part, to support business opportunities. Scotland’s post-devolution international work was initiated by its then first minister Jack McConnell and continues to be an area of focus today. Just last week, the largest ever Scottish delegation attended the Arctic Circle Assembly, after the current first minister Nicola Sturgeon addressed the summit in 2021.
Exportation has always been a vital part of Scotland’s economy and our international profile, perhaps more so than the UK as a whole. This is exemplified by recent HMRC figures which show that in the first six months of 2022, Scotland outperformed the UK with a 12.9% increase in international goods exports (excluding oil and gas), compared to the first six months of 2019. In the same period, UK exports decreased by 0.5%.
It has also been noted that recent economic measures introduced by the UK government – or, rather, the unintended consequences of those measures – could further strengthen exports, with the fall in the value of the pound making this activity more profitable and thus helping Scottish exporters absorb some of the other rising costs. However, industry voices remain concerned about wider economic challenges and how this could affect their ability to trade. Scotland operates in uncertain economic conditions, with the fourth chancellor in four months being a symptom of this instability, rather than a solution.
In this environment, Scotland needs to ensure its international strategy is diverse and responsive to key international issues. Exports and commerce undoubtedly have a central role to play, but they are not the be-all and end-all.
Given Scotland’s lack of formalised diplomatic power, businesses have an important role to play in developing our international profile and reputation. Trade and exportation are clear strengths for Scotland, but as we continue to experience a turbulent international economic environment, it’s vital that these commercial actors also contribute to wider objectives, such as supporting Scotland to play our part in tackling serious global issues like climate change.
For a relatively small country, Scotland has made a massive contribution to humanity. While the present economic situation poses both opportunities and threats in the short term, the priority must be to continue making that positive global contribution in the long term.
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