Plea for recovery plan to boost economy post-pandemic

The Scottish Government is calling for an £80 billion UK-wide economic stimulus package to offset the damage caused by the coronavirus pandemic.

By Neil McGrory, Local Democracy Reporter
Monday, 29th June 2020, 4:05 pm
Finance Secretary Kate Forbes. Photo: Scottish Government
Finance Secretary Kate Forbes. Photo: Scottish Government

A newly-published report says this funding would lead to VAT being cut to five per cent in the hospitality and tourism industries as well as further assist employers by supporting a 2p cut in National Insurance contributions, thereby making it cheaper to hire staff.

Other measures recommended in the report include a jobs guarantee scheme, a National Debt Plan, new rules to prioritise economic growth over deficit reduction, investing in low carbon and energy efficient intitatives as well as digitial infrastructure and increased financial powers for Scotland.

Launching the report, finance secretary Kate Forbes said: “We are emerging from the biggest economic shock of our lifetimes. It has hit the most vulnerable in our society disproportionately and presents challenges that the Scottish Government does not currently have the powers to meet.

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“The UK Government’s fiscal policies are still key in determining our budget, so today we set out the principles we believe it should follow to ensure we emerge with a fairer, greener economy that values wellbeing alongside growth.

“This report recommends bold, practical steps which would provide an immediate boost to our economy, protect existing jobs and deliver new ones. It tackles public debt, employment and proposes measures to further support business. Crucially, it avoids any return to austerity. Economic stimulus must be prioritised over deficit reduction until the recovery has fully taken hold.

“Germany has already adopted a similar-size stimulus package, representing four per cent of GDP, and the UK Government needs to be similarly positive, proactive and ambitious.

“Action is needed now. If the UK Government is not prepared to respond then Scotland must have the additional financial powers required to secure a sustainable economic recovery.

“Without those powers we will be at a severe disadvantage to other nations. It would be like trying to chart our way to recovery with one hand tied behind our back.”