SNP attacks Downing Street’s capital investment stance as double-dip recession hits UK

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By G.A.Ponsonby
 
The Tory/Lib Dem coalition’s refusal to commit funds for so called ‘shovel-ready’ projects has been condemned by the SNP after official figures showed the UK has slipped back into recession.
 
Scottish Finance Secretary John Swinney said that the UK coalition “must act immediately” to stimulate economic growth.

By G.A.Ponsonby
 
The Tory/Lib Dem coalition’s refusal to commit funds for so called ‘shovel-ready’ projects has been condemned by the SNP after official figures showed the UK has slipped back into recession.
 
Scottish Finance Secretary John Swinney said that the UK coalition “must act immediately” to stimulate economic growth.

The new figures show that the UK economy shrunk by 0.2 per cent in the last quarter, which followed a drop of 0.3 per cent in the last three months of 2011, two periods of negative growth constitute a recession.

The UK economy has now shown negative growth for three out of the last four quarters.

A sharp fall in the construction sector is behind the contraction, the sector fell by 3 per cent.  The Office of National Statistics blamed the particularly large fall on UK Government spending in the sector.

SNP Treasury spokesperson Stewart Hosie MP said the ‘double-dip’ was a result of the Coalition Government’s refusal to invest in shovel-ready infrastructure projects as consistently called for by the Scottish Government.

Mr Hosie, a member of the Treasury Select Committee, described the UK coalition’s handling of the economy as “reckless” and said:

“Scotland is again paying the price of the UK Government’s reckless economic mismanagement.  This double-dip recession is the direct result of a sharp fall in construction output over a period when the Scottish Government has consistently called for investment in shovel-ready projects.

“At a time when we needed capital investment to support employment, help small business and promote economic security, the centrepiece of the recent Budget was a tax cut for the rich.  This fall back into recession shows that the UK Government has its priorities all wrong, and that we urgently need a change of direction.”

The Scottish Government submitted a list of shovel ready projects after a request from UK PM David Cameron.  However Chancellor George Osborne subsequently refused the £300m funding to kick start the projects in his last Budget.

Mr Hosie repeated his party’s call for economic powers to be given to Scotland and added:

“The Chancellor has ignored the needs of Scotland in a Budget which shows the UK government has its priorities all wrong, and that Scotland now urgently needs the real economic powers of independence.

“What this highlights is the limitations of the current constitutional arrangements, in particular our inability to borrow.  That means work is delayed while we await the green light from Westminster, which is completely unacceptable and is holding us back.”

Speaking at Prime Ministers Questions, Prime Minister David Cameron said the figures were “very, very disappointing”.

“I don’t seek to excuse them, I don’t seek to try to explain them away,” he said.

There will now be pressure on Mr Cameron’s Chancellor George Osborne to alter his economic strategy.