UK coalition signals economic U-turn as Clegg admits ‘massive’ capital spend plans

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By Martin Kelly

Reports that the UK Coalition are planning to change their economic stance have led to renewed calls for Scotland’s ‘shovel ready’ projects to be funded.

Following an article in today’s Financial Times, where Deputy Prime Minister Nick Clegg reveals plans for a “massive” increase in state-backed investment in housing and infrastructure, the SNP have said there is now no excuse not to fund infrastructure projects in Scotland.

In the article, the Liberal Democrat leader also claimed the Coalition’s use of “lurid” language about the state of the country’s finances may have damaged the UK economy.

“That kind of language over a prolonged period of time can have a dampening effect on mood, which is very important in an economy,” he said.

The move follows a report yesterday by the IMF chief Christine Lagarde in which she warned the UK Coalition that they should prepare an economic Plan B.

SNP Westminster Treasury Spokesperson Stewart Hosie MP said the signals of a change by the Coalition would be met with “sighs of relief by job creators across the country.”

Mr Hosie added:

“It seems the UK Government are the last ones to recognise the importance of investment in infrastructure for promoting economic growth.

“With the economy stagnating and the IMF joining calls for a plan B, perhaps the UK Government has finally got the message that austerity measures alone aren’t working.

“The plan to increase infrastructure spend leaves the UK Government with no more excuses for ignoring the Scottish Government’s calls for £300 million capital investment in 30 ‘shovel ready projects’ to build economic recovery and create jobs across Scotland. Every £100m of capital investment is estimated to support 1,400 jobs, and would provide a much needed boost to the UK’s stagnating economy.

“If the UK Government are serious about investing in infrastructure to boost growth, a capital injection in the Scottish Government’s “shovel-ready” projects must be an integral part of these plans.”

There is now speculation that the UK Coalition will make an announcement soon.  Projects believed to be under consideration by the Tory/Lib Dem coalition include another airport near the river Thames in London.

Projects ready to go in Scotland include M8, M73, M74 Motorway Improvements at £37m, accelerated School building project at £30m and affordable local authority housing at £15m.

The Scottish Government is currently pushing for £302m worth of so called ‘shovel ready projects’ to be given funding.  It is estimated that 1400 jobs will be created for each £100m of investment.