Devolved nations call for Osborne to boost growth

In anticipation for George Osborne's autumn statement, Scotland calls for stimulus, Wales gets on with it.

As the Chancellor prepares to deliver his Autumn Statement against a background of dire economic figures and forecasts, the Scottish Government’s Chief Economist, Gary Gillespie has warned that the Scottish economy faces period of uncertainty and volatility.

While rates of unemployment north of the border have remained below the UK average and the Fraser of Allander Institute has  predicted albeit slight growth of 0.4% this year across Scotland, Gillespie’s regular State of the Economy reports outlines a picture of considerable uncertainty and volatility facing the country.

The report highlights:

  • The escalation of the European sovereign debt crisis, coupled with the general slowdown in trade and investment in many of the world’s key economies, has made the global recovery even more fragile than it was just six months ago.
  • Over the last year, the UK economy has grown by much less than the rate of recovery normally expected in the aftermath of a deep recession.
  • While the Scottish economy continues to recover, like almost all other advanced economies, the pace of growth remains fragile.
  • As a small open economy, the strength of the Scottish recovery will depend critically on the pick-up in the global economy and our ability to increase our share of international investment and trade.

Speaking on the eve of the Chancellor’s statement, the report promoted Finance Secretary, John Swinney, who earlier in the day had argued that the UK Government was relishing the prospect of a confrontation with the trades unions, to warn George Osborne:

“This report is yet another stark warning to the Chancellor. There is no doubt that UK economic growth will remain uncertain for the foreseeable future, as the economy continues its fragile recovery.

“While the Scottish labour market continues to outperform the UK as a whole – with lower unemployment, higher employment, and lower economic inactivity rates – we must ensure that growth is sustained.

“The improvement in the Scottish labour market over the past year has been encouraging – and we are taking action on youth unemployment and skills – but the report notes that further improvements will depend on the ability to boost output and generate new demand and employment opportunities.

“The Chancellor must heed the warnings and use his Autumn Statement to take urgent action to stimulate the economy and boost growth, improve access to finance and enhance economic security.”

Meanwhile, as Osborne prepares to formally announce what he will be hoping is a stimulus package that will kick start the British economy back into life, the Welsh Government has itself  unveiled an economic stimulus package worth close to £40 million, financed by the Barnett consequences from Whitehall’s decision to freeze the council tax in England.  Forming part of Labour’s budget deal with the Lib Dems at Cardiff Bay, measures include:

  • £4.9m over the next two years to support employers who run “high-quality” apprenticeship programmes, with a view to creating 1,800 new apprentices
  • £3m into Skills Growth Wales, an offshoot of the ProAct scheme which will provide support to companies which plan to expand their workforce.
  • £9.26m for capital maintenance in schools.
  • £6m into a housing project in Ely Mill, Cardiff, creating 200 jobs building affordable and market housing.
  • £3m investment in the Arbed scheme, improving energy efficiency in home in the most deprived communities across Wales.
  • £9.26m to  be spent on levering in private finance, building an additional 130 affordable homes Wales-wide.
  • £3.5m invested into road improvements in the planned new enterprise zones.


In publishing the package of measures, Finance Minister, Jane Hutt explained:

“Taken together, these proposals represent a comprehensive stimulus package which supports the skills and apprenticeship agenda and have formed part of the Budget agreement with the Welsh Liberal Democrats.

“On the November 16, the Minister for Business, Enterprise, Technology and Science [Edwina Hart] announced £55m of new investment in Welsh SMEs this year to support business growth. Last week, I announced an additional £87m of capital investment over the next two years across Wales.

“This package builds on those actions to boost the economy and develop public services, generating immediate benefits for our economy while complementing our long term aims.”

For Plaid Cymru, the party’s Treasury spokesman, Carmarthen East and Dinefwr MP Jonathan Edwards has supported calls for greater capital investment, declaring ahead of the Chancellor’s statement:

“What is now needed most is a major counter-cyclical investment in capital projects which will provide jobs in the construction industry, which employs 100,000 people in Wales, and in the longer term improve the competitiveness of the UK. With UK borrowing costs at their lowest ever level, around 2.2%, now is an excellent time to prudently invest and enhance our economic capacity.”

In her blog meanwhile, BBC Wales’ Political Editor, Bestan Powys, reflecting on the stimulus package spun all weekend by the Government says of the First Minister:

“Carwyn Jones will welcome the money but inevitably remind the UK government that it’s giving back with one hand a little bit of the far bigger sum it’s already taken with the other.

“The emphasis might be switching from day-to-day spending to spending on big capital projects now (giving someone in Edinburgh a few good lines for his next FMQs) but prepare for reminders in Cardiff Bay that it was the Welsh capital budget that took the heaviest blow of all.”

It’s time the Chancellor took note and implements a stimulus package that really works. Without it, all the nations of the UK will remain in intensive care.

See also:

• Edinburgh, Cardiff and Belfast at panic stations as Westminster enters crunch week – Ed Jacobs, November 28th 2011

• Miliband attacks Osborne’s “dangerous gamble” and “catastrophic mistakes” on economy – Shamik Das, November 24th 2011

• OECD: The economic indications are not good for Gideon – Alex Hern, November 15th 2011

• Osborne’s cuts having “damaging effect” on Northern Ireland peace process –Kevin Meagher, November 10th 2011

• Devolved nations call on Whitehall to create jobs – Ed Jacobs, October 12th 2011

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7 Responses to “Devolved nations call for Osborne to boost growth”

  1. Ed Jacobs

    RT @leftfootfwd: Devolved nations call for Osborne to boost growth

  2. Political Planet

    Devolved nations call for Osborne to boost growth: In anticipation for George Osborne's autumn statement, Scotla…

  3. Michael

    Devolved nations call for Osborne to boost growth I Left Foot Forward –

  4. Bob Miller

    What about boosting growth in England? Or is it only the devolved countries that count? Creating jobs in the devolved countries won’t help people like me who live in England.

  5. Janet Graham

    Devolved nations call for Osborne to boost growth: writes EdJacobs1985 #AS11

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