Chancellor’s Autumn Statement falls short as UK faces extended period of cuts

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By G.A.Ponsonby
 
The SNP has responded to the UK Chancellor’s Autumn Statement by claiming it falls short of what is needed and any benefits will in fact kick in too late.
 
Responding to the announcement from Chancellor George Osborne, SNP Westminster Treasury spokesperson Stewart Hosie MP warned that the proposals fell far short of what was required and the planned capital spending injection will not begin until after 2012.

Mr Osborne’s speech, given against a backdrop of economic gloom, contained what appeared to be some positive news for Scotland with an expected capital spending bonus of £430 million over the next three years.

However the announcement was treated with caution by the SNP who pointed out that details of planned cuts to other budgets, needed in order to fund the increase, have yet to be clarified and the changes may in fact result in the Scottish budget being cut.

Mr Hosie said: “We do not even have the detail from the Treasury on what the Barnett implications from the statement will mean for Scotland which, with the revenue budget set to fall, could actually men a cut instead of any benefit from consequentials.”

However, speaking on Newsnight Scotland, junior Scotland Office Minister David Mundell insisted that the Scottish grant would not be cut, a pledge Scottish government Finance Minister John Swinney described as “extraordinary”.  The SNP Minister said he would wait with interest for the letter of confirmation.

Analysts have claimed that the overall spending envelope contains no spending increases and is in fact neutral; they claim it will have little or no impact on the economy.

The announcement from Mr Osborne was overshadowed by a report by the Office of Budget Responsibility (OBR) that cut UK growth forecasts for 2012 by almost three quarters, from 2.5 per cent to 0.7 per cent.

Following the Chancellor’s statement the OBR claimed it will have no effect on growth saying “we have not made any significant changes to our forecasts as a result of today’s measures”.

The gloomy economic forecasts resulted in the estimated number of public sector job losses increasing from 400,000 to 700,000.

Mr Hosie said:

“The Chancellor’s statement falls well short of what is required with growth forecasts dramatically cut for 2012, and essential capital investment not kicking in until after next year.  Even the Office of
Budget Responsibility points out that the Chancellor’s announcements will have ‘limited impact’ on their forecast for the economy.”

Mr Hosie claimed that infrastructure investment was needed urgently and repeated calls for Scotland to be given the necessary powers to allow the Scottish government to address the economic problems.

The SNP MP added:

“Given the now stark economic warnings over the direction of the UK economy, it is essential that planned investment to boost business lending and bring forward infrastructure spending are delivered without delay given the danger point for the UK re-entering recession in 2012 – not dripped out over the next decade.

“It is hugely regrettable that the Treasury has not listened to the Scottish Government’s calls for a targeted, expanded programme of capital infrastructure investments in Scotland to stimulate demand. …

“It is clear that Scotland needs the same financial and economic powers as other nations have, so that we can grow our economy and revenues as the only alternative to a decade or more of Westminster-dictated cuts. We have used the powers we have wisely – we now need the same powers as other countries have in order to sort this mess out.”

The UK coalition promised £50 million in order to help keep the Caledonian Sleeper trains.  The money was welcomed by the Scottish government who said that they would work constructively with the UK government in order to keep the service running.