Scotland’s economic priorities

1 Dec 2014 02:28 PM

Autumn Statement must support sustained economic growth - DFM.

The UK Government must take action to swiftly implement the proposals of the Smith Commission and ensure that the benefits of economic growth are not only sustained but are made accessible to all.

The Deputy First Minister made the call for action to reduce the inequalities and disparities that exist across the United Kingdom in a letter to the Chancellor of the Exchequer ahead of this week’s Autumn budget statement

The Smith Commission which reported on Thursday (November 27) did not go far enough to provide powers for Scotland that would enable the Scottish Government to effectively boost job creation or to offer an effective alternative to the austerity policies of the UK Government.

Ahead of the Chancellor’s Autumn Statement, Mr Swinney has set out a number of priorities for Scotland’s economy that must now be addressed.

The Deputy First Minister has called on the Chancellor to take the following measures to help grow Scotland’s economy and protect public services:

- Move swiftly to implement the new powers proposed by the Smith Commission

- Increase capital investment

- Increase minimum wage at least in line with inflation

- Support innovation and internationalisation in the Scottish economy.

Deputy First Minister John Swinney said:

“The Scottish Government is doing all it can, within its powers, to strengthen the Scottish economy. The latest Scottish GDP figures show the economy has grown continuously over the last two years, while our employment, unemployment and inactivity rates are the strongest of the four nations of the UK.

“However, there is clear evidence that economic and geographic inequality is inhibiting growth and successive UK budgets and Autumn Statements have under-delivered and undermined the Scottish Government’s ability to support economic growth.

"Efforts to tackle economic inequalities in Scotland are being made in the face of a welfare reform programme that is estimated to remove £6 billion from Scotland's economy in the six years to 2015-16. Pursuing a policy of continued austerity and welfare cuts will have a significant and detrimental impact in Scotland and will have a disproportionate impact on not only Scotland’s but many of United Kingdom’s most vulnerable citizens.

"The Scottish Government believes that now that economic recovery is established, action should be taken to reverse the erosion of the pay levels that those receiving the National Minimum wage have experienced since the economic downturn. We believe that the National Minimum Wage should, as a minimum, increase in line with inflation.

“It is also vital that we tackle geographic disparities and use large scale infrastructure projects to maximise opportunities for economic growth in Scotland and across the UK, rather than strengthening existing economic imbalances which benefit the South East of England.

“In that spirit I call on the Chancellor to increase infrastructure spend to support growth. Such investment in the future of our country’s economic health will not only create jobs and prosperity but will, in time, boost the public finances.”

Mr Swinney said the UK Government must use the Autumn Statement to make early progress on implementing financial powers recommended by the Smith Commission, including APD, as soon as possible.

Mr Swinney added:

“I have also urged the Chancellor for early implementation of the powers set out by the Smith Commission. I am determined that this next stage of devolution is accompanied by firm financial foundations and a fiscal framework that provides an equitable settlement for the people of Scotland.

“The Smith Commission did not recommend the job creating powers I wanted to see come to Scotland but there is action the UK Government can take to support internationalisation in the Scottish economy and to boost innovation. If these powers are not to be transferred to Scotland then the UK Government must show that it will use the powers it has kept in Scotland’s interests.

“The Chancellor must use this Autumn Statement to make an early commitment to deliver on the financial powers of the Smith Commission and to do so as soon as possible.”