The UK braces ahead of the autumn statement tomorrow and the message from all the nations is clear - now is the time to change course.
As the chancellor prepares to deliver his autumn statement, in what will amount to a speech marking a bleak mid-winter, across the UK the message is clear – it’s time to change course and change course now.
In Scotland, finance secretary John Swinney formally wrote to the chancellor late last month, outlining the measures the Scottish government believes he needs to be announcing to get growth back into Scotland PLC.
“Scotland’s budget for construction and maintenance projects is being cut by 33 per cent by the UK coalition government in a failed attempt to reduce public sector borrowing and while we are investing what we can in economic recovery in Scotland there is much more to do.
“Too many households are still struggling and too many people find themselves out of work.
“I have asked the chancellor to significantly increase Scotland’s level of capital investment in his autumn statement to boost our future prosperity. This would provide much needed work to the Scottish construction sector and boost local economies all over Scotland.
“If these projects could get under way now, rather than being delayed, they would play a major part in helping to tackle unemployment. Capital investment is central to the Scottish government’s economic strategy, with every additional £100 million of capital spending estimated to support around 1,400 jobs in the Scottish economy.”
Predictably, he continued:
“With the full fiscal and economic powers of independence Scotland could create the best possible environment for economic success.”
Meanwhile, writing in The Scotsman this morning, one of the paper’s columnist’s, Peter Jones, says:
“How much of a risk-taker is George Osborne?
“Tomorrow, when the chancellor presents his somewhat tardy autumn statement on the economy, which now amounts to a mid-year budget, we will find out. My fear is paradoxical: that he is as conservative as his party label suggests and, in plotting a path which looks like avoiding risks to the economy, he will actually end up taking a bigger risk.”
Over in Wales, shadow Welsh secretary Owen Smith has called on the chancellor to “swallow his pride” and recognise Plan A has simply failed.
A former shadow Treasury minister, Smith argues:
“George Osborne needs to swallow his pride and acknowledge that Plan A hasn’t worked, that growth has been much lower than he expected, and that people are struggling.
“As things stand, much more severe cuts are due to be imposed in the next financial year from April. Yet the government’s belief that its austerity measures would lead to growth because the private sector would invest has been shown to be completely wrong-headed.
“It’s not rocket science. George Osborne should change direction and provide a short-term Keynesian stimulus aimed at injecting money into the economy and restoring consumer confidence.”
Meanwhile, warning of the consequences of no change in direction, Jonathan Edwards, Plaid Cymru’s Treasury spokesman, explains:
“We are in a grave situation – in economic terms worse than the great depression of the 1930s or the recession of the 1990s. In contrast to those situations, the UK’s gross domestic product is still 3% below what it was in 2008 at the time of the peak before the crash. The economy desperately needs a stimulus.
“Because of devolution, Wales could be in a position to make a real difference, but getting borrowing powers is essential.”
While in Northern Ireland, the biggest issue on the cards will be whether the chancellor will, or will not, make any announcement on the devolution of corporation tax.
Last month, the Belfast Telegraph reported that, although information over the consequences of a package to devolve the power over the tax to Stormont had been provided to ministers and officials in Belfast and London, it remained “inadequate for an informed debate on whether any of the options would be acceptable”.
Mark Nodder, president of the Northern Ireland Chamber of Commerce, has called on the chancellor to “pull out all the stops” to secure growth.
And in its preview of tomorrow’s autumn statement, the Irish Times notes:
Nodder is hoping that Osborne will tomorrow “pull out all the stops” to make it easier for businesses to break into new markets, invest and create jobs:
“The chancellor’s autumn statement must include tough decisions to prioritise growth without adverse effects on the government’s deficit-reduction programme. We believe that resources need to be re-prioritised to support business growth, international commerce and the building of houses and infrastructure.”
Nodder is confident businesses can lead an economic recovery but only with some targeted support and a confidence boost from government.
The Northern Ireland Chamber of Commerce is far from the only business voice urging the chancellor to take “unpopular decisions” to get the economy back on track.
There is no end to the number of potentially unpopular decisions from which Osborne has to choose – whether it is re-jigging the UK’s welfare spending budgets or increasing taxes on high earners and reducing pension relief. But, overall, the Confederation of British Industry (CBI) says the chancellor must be motivated by a desire to “drive growth” and deliver on finance for businesses.
He should also, the CBI urges, commit capital spending resources to big infrastructure projects and “short-term, high-impact measures to support growth”.
Mervyn McCall, chairman of the Institute of Directors’ Northern Ireland division, said business leaders would be looking for “initiatives that assist the growth of the wider economy that in turn will have a spin-off for local firms supplying the Great Britain market”. It’s a tall order.