Alex Salmond blames Westminster for double-dip recession

Alex Salmond has demanded that Westminster do more to support jobs and growth

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As David Cameron has today given an interview with the Daily Telegraph arguing that austerity will last until 2020, Alex Salmond has demanded that Westminster do more to support jobs and growth.

salmond-cameronThe Scottish first minister’s comments come following a day of mixed news for the Scottish economy. On the jobs front, the number of jobless fell by 4,000 to 215,000 between March and May.

This means that the Scottish unemployment rate is now 8%, just below the UK wide average of 8.1%.

However, in a blow to the country, figures revealed that Scotland had followed the rest of the UK into a double dip recession. Data revealed that the Scottish economy contracted by 0.1% in the first quarter of the year, fuelled by a sharp 6.9% fall in construction output.

Placing the blame squarely at the door at Number 10, Salmond declared that “the UK’s government’s austerity agenda and the prime minister’s failure to heed calls for direct investment in construction and infrastructure is hampering progress.”

He continued:

“With the full economic and financial powers of independence we could do even more to raise Scotland’s competitiveness and drive forward economic recovery.

“In the meantime the UK government must deliver substantial capital investment immediately to promote growth and jobs.

Whilst Scottish Labour have sought to pin the blame on both Holyrood and Westminster, reaction in the Scottish press has George Osborne firmly in its sights.

At the Herald, in its editorial, whilst recognising Treasury announcements yesterday on infrastructure spending and the launch of the national loan scheme it warned:

“While all this should help to bring forward projects, it could take a year before the diggers move in and it is possible that the projects backed by government guarantee would go ahead anyway.

“By contrast the first minister’s call for direct investment in public sector projects would have the merit of getting some of his shovel-ready projects on site quickly. Mr Osborne would achieve more growth by recognising that investment in infrastructure has the double benefit of getting the economy and the country moving.”


See also:

Delaying a decision on gay marriage could spell trouble for Salmond 18 Jul 2012

As Yes to Independence campaign splits (again), Cameron considers taking control of Scottish referendum 9 Jul 2012

Darling launches campaign for the Union: ‘Better Together, united not divided’ 25 Jun 2012


At the Scotsman, meanwhile, its leader has called on the Treasury to take a dose of Keynesianism economics, concluding:

“What really needs to be revisited is the UK government’s dogged adherence to a Plan A, in which the A stands for Austerity. Mr Osborne has been at pains to ensure the markets are in no doubt that he is serious about tackling the country’s debt mountain.

“But there is a growing consensus that the policy required to see off the bond traders two years ago is not the policy required now, under different international circumstances and in the absence of the green shoots of recovery that everyone hoped would now be beginning to peek through the soil.

“What the markets want to see is growth, and quickest way to growth is a cleverly targeted increase in government spending.

“Keynesianism has been a dirty word at the Treasury for two years, but circumstances change, and policy must change too. The injection of money into the economy argued for by both Labour and the SNP must happen if Scotland and Britain as a whole are to begin the slow climb back to recovery.”

Interestingly however,  Professor John McLaren, of the Centre for Public Policy for Regions at the University of Glasgow argued that the figures published yesterday prove the needed for clearer economic data ahead of a referendum on independence.

Declaring that “overall, our economic prospects remain poor and the best way to improve them uncertain”, writing in the Scotsman he argues:

“Looking forward to the referendum, the current state of the economic data for Scotland remains inadequate. While we have data for the UK with and without the contribution of North Sea oil, we only have figures for Scotland without any share of North Sea oil. This situation could be easily corrected and should be.

“There is also a strong case for Scottish gross national product (GNP) to be published, as it more accurately measures the rewards from economic activity that remain within Scotland.

“Without this, the debate leading up to the referendum will be based on incomplete, possibly distorted information.”

Elsewhere, in Wales unemployment has risen to 9%, up 1.1% from the same period last year. Assessing the figures, Nick Servini BBC Wales business correspondent explains:

“Unemployment in Wales is not changing much for better or worse at the moment.

“Over the past six months it has gone up marginally three times and down the same. It has been at or above 130,000 for the past ten months, an historically high figure.

“During the pre-recession years of 2006 and 2008 that same figure stood at between 70,000 and 80,000.

“Employment has come down for the past three months, which will be worrying, but it has not reduced enough to raise major alarm bells yet.

“As you’d expect, the jobs’ market is sluggish in a double-dip recession and there is nothing to contradict that in today’s official figures for Wales.”

In Northern Ireland meanwhile, figures pointed to unemployment having risen to 6.9%, a 0.1% increase on the quarter before but down 0.2% on a year earlier.

Responding, Angela McGowan, Chief Economist at the Northern Bank is quoted in the Belfast Telegraph has having said:

“With economic stagnation and a far from dynamic labour market, unemployment levels remain remarkably resilient. However, the longer economic problems persist, the higher the chances of further job losses.”

Whilst arguing that high public sector employment in Northern Ireland had traditionally been a buffer she added:

“That safety blanket could rapidly erode if the UK coalition Government does not up its game when it comes to pulling the UK economy out of the current double-dip…

“Northern Bank forecasts suggest that unemployment in the local economy will peak at almost 64,000 claimants next year.”


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