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Economic measures needed
20/11/2008
The UK government must take decisive action to help the Scottish economy weather the global downturn, Finance Secretary John Swinney said today.
Mr Swinney has written to Chancellor Alistair Darling, urging him to produce a balanced package of tax cuts and increased spending in the Pre Budget Report on Monday.
In the letter the Cabinet Secretary calls for the Treasury to ensure Scotland receives its fair share of any additional capital expenditure through Barnett consequentials.
Mr Swinney said:
"We need the UK government to take decisive action by introducing a substantial and balanced package of tax cuts and increased public expenditure.
"The Scottish Government is doing what we can within our limited powers and fixed budget. For months we have called on Westminster to introduce a reflationary package of increased public spending. That is what our economy needs and, on Monday, that is what the Chancellor has the chance to deliver.
"Increased and accelerated capital expenditure will help provide the jobs and investment to keep Scotland's economy moving in difficult times. We have already acted by accelerating investment in affordable housing - now the Chancellor must match that commitment. And if the Chancellor decides to accelerate capital expenditure, Scotland must also receive its fair share of consequentials through the Barnett formula.
"To help households - and to give people money in their pockets to spend in Scotland's businesses - we must also see tax cuts. Again the Scottish Government has acted by fully funding a Council Tax freeze. Now we need to see action like lifting VAT on fuel over the winter months and an increase in the winter fuel allowance. I have written to Alistair Darling today outlining the importance of taking these measures.
"I welcome the UK government's decision, albeit temporarily, to abandon its fiscal rules. That is absolutely necessary to introduce the fiscal stimulus I have outlined. But in the medium to long term fiscal policy must be more responsible and maximise investment and economic growth. Scotland must also be given full fiscal powers, including borrowing powers, to enable the Scottish Government to do more to help our own economy."