Politicians have been told to make the economy their priority in 2003, as new figures show the number of businesses failing in Scotland rose by more than 6% over the last 12 months.

CBI Scotland chief Iain McMillan said the Scottish Executive must not put economic growth and job creation behind social policy.

In his New Year message, he said the "economy first" message must be "ingrained" into the "very fabric of Scottish public life".

Mr McMillan spoke out as city consultants D&B said the number of businesses going to the wall in Scotland rose from 4,519 in 2001 to 4,804 in 2002 - an increase of 6.3%.

Iain McMillan warned MSPs off "trivia"

However, the rise was below the UK average of 7.2% in 2002.

D&B said smaller firms were being forced to close down as orders and lucrative contracts from larger companies dried up.

Analyst Philip Mellor said: "Our own economy is slowing down but if you look at the global markets, all doors are closing at the same time.

"The US is still to pick up, Germany is almost in recession, France is slowing down and the Far Eastern markets are all suffering."

To combat the effects of the bleak global economic situation, Mr McMillan said the CBI wanted to see accelerated investment in the transport infrastructure along with an overhaul of the planning regime.

He said work and enterprise needed to be "embedded" into teacher training, in schools and colleges.

The business leader also urged the Scottish Parliament to use local fiscal powers to help by setting a competitive business rate.

The manufacturing sector has been struggling

Mr McMillan said: "In 2003, Scotland's political leaders must put the development and success of the Scottish economy at the very top of their agendas.

"A useful start was made in 2002 with the Scottish Executive's spending allocations being directed more at investment in the economy.

"The executive's change of policy on business rates and the SNP's withdrawal of their 'Penny for Scotland' tax policy were also welcome."

He added: "But much more needs to be done. For too many years, too many of Scotland's politicians have been obsessed with the social agenda and legislative trivia, whilst displaying little or no interest in the success of the Scottish economy.

"This must change. Scotland will never be entrepreneurial, successful and confident for as long as our political leaders and their parties try to 'out left' each other and put the social agenda first and the agenda to build sustainable economic growth second."

The Scottish Parliament has been told to act

Meanwhile, the Scottish National Party has claimed the country has lost between �2bn and �13bn of public sector spending because of low economic growth under Labour.

The party said the economy has grown on average by just 1.4% annually since Labour came to power in 1997.

It said that compared with a rate of 2.6% in the UK, 4% in Finland and 8.6% in Ireland during the same five year period.

The SNP report said if the Scottish economy had grown at the same rate as the UK one as a whole, its Gross Domestic Product would be �5bn more, providing an extra �2bn of public spending.

The party suggested a growth rate equal to that of Ireland would have put Scottish GDP �33bn higher and delivered a public expenditure boost of �13bn.

SNP finance spokesman Ian Wilson claims the figures make a case for financial independence.

"We have to get the job situation in Scotland sorted, make sure we're at a competitive advantage to the rest of the UK," he said.

"The imperative for all of us in Scotland though is to stop focusing on spending money on the symptoms of economic underperformance and to start to get the economy central and to use the powers we have got to redirect resources into getting the economy going."

But Enterprise Minister Iain Gray insisted economic growth was already central to the executive's policy.

Mr Gray said: "We know that Scotland isn't growing as fast as we want it to, we've said that for a very long time now and we have a strategy to turn that round, it's already underway.

"We're investing in our skills, investing in education, investing in initiatives such as the Intermediary Technology Institutes.

"These are the things that in the medium to long term will actually get the Scottish economy going again."