The devolved administrations have united to call on the UK government to adopt Vince Cable’s call for much greater expenditure on infrastructure to boost growth.
The devolved administrations have united to call on the UK government to adopt Vince Cable’s call for much greater expenditure on infrastructure to boost growth.
In a letter to the chief secretary to the treasury, Danny Alexander, Welsh finance minister, Jane Hutt, her Northern Irish counterpart, Sammy Wilson, and Scotland finance secretary, John Swinney, write:
“We have been clear for some time that our priority in these difficult times is growth and jobs. Despite the reductions in our budgets that we have faced, the devolved administrations have provided a short-term stimulus to our economies and put in place the conditions for growth in the longer-term. However, we have repeatedly argued that the UK government’s budget cuts have been too deep and too fast and have hampered our efforts to stimulate growth.
“We have welcomed the UK government’s acknowledgement of our argument, including the long overdue decision in the Autumn Statement 2012 to increase capital investment. However, the fact remains that the devolved administrations are continuing to experience significant capital budget constraint as a consequence of the 2010 Spending Review outcome. Furthermore, we remain concerned that the recent capital injection has been financed through reductions in other areas of public expenditure. We therefore continue to call on the UK government to use the full range of tools at its disposal to boost growth and jobs.”
They continue:
“With the imminent budget and preparations for the spending round, we would urge you to consider a targeted programme of infrastructure investment and other activities that will stimulate the UK economy. A return to economic growth will increase tax revenues, reduce outgoings required to support those who cannot find work and in turn act to rebuild UK public finances.”
Noting the low borrowing costs that the country continues to enjoy, despite the recent downgrade by Moodys, the minister concludes:
“Despite the recent loss of triple A status, borrowing costs remain very low. This is an indication that the financial markets are perfectly willing to provide the funds needed to support such a programme. Of course, borrowing has to be repaid and we are not advocating indiscriminate borrowing. However borrowing to invest in growth, or reprofiling planned expenditure to frontload the economic stimulus are both strategies that could have a significant beneficial impact on growth and jobs. Analysis by IMF economists has shown that the right time to reduce debt is when the economy has recovered – trying to do so now means paying a bigger than necessary price in terms of lost output.
“The devolved administrations have a range of capital projects that could be accelerated if additional resources were available to ensure that we would play our part in restoring the UK economy to full health.”
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4 Responses to “Devolved governments unite to call for change in economic policy”
Old Albion
What did the English devolved government say? Oh! but of course we don’t have one……………
Mick
Yes. Have the leftists answer the West Lothian Question before you let them open their mouths on anything else.
Mick
So even Swinney admits that Tory cuts are sound. It’s just that he thinks they cut doo deep too quickly.
Left Wing dabbling with high spending and borrowing ALWAYS leads to danger. Indeed, that’s why Tories always inherit bad Labour economies whilst Labour virtually always inherits good Tory ones.
But of course the boorish Left will never see.
soppygit
But clearly if Swinney supports something it must be wrong,