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  By Martin Kelly
 
The Scottish government has upped calls for investment in infrastructure projects after a report by the Scottish ITEM Club painted a gloomy picture for Scotland’s economy within the UK over the next four years.
 
Commenting on the details of the report by Ernst & Young, the SNP has claimed it demonstrates why it is imperative that George Osborne uses his autumn statement this week to invest in capital projects.

The report predicts the Scottish economy will struggle until 2016, with growth falling short of the UK average.  It identifies the problems facing the construction sector, stating that “whatever the merits of placing such an emphasis of the initial phase of public sector spending restraint on capital budgets, the effects on the construction sector are clear to see.”

The Scottish Government has repeatedly called on UK Chancellor George Osborne to counter the problems in the sector by releasing funding for investment in shovel-ready projects, which they say will provide a swift boost to the construction industry.

The report - which puts Scotland’s economic performance as close to similar sized countries Denmark and Finland - also identifies the effects of the austerity programme currently being pursued by the Westminster Government as one of the main domestic risks facing the level of economic performance in Scotland.

According to the report, growth in Scotland’s business and financial services sectors outperformed the rest of the UK; it identifies this sector as crucial to longer term growth and employment prospects.

Commenting, SNP MSP John Mason who sits on Holyrood’s Finance Committee said:

“What this report makes clear is precisely why it is so important that George Osborne does not let another opportunity to boost growth slip by him in his autumn statement this week.

“The savage cuts to capital investment that he has forced on the country have had a clear and indisputable impact on Scotland’s economy.

“It is long past time that the Chancellor ceased his stubborn refusal to act and invested in the kind of shovel-ready projects that can quickly get our economy moving again.

“The construction sector is absolutely critical to our economic wellbeing and has been utterly failed by this Westminster Chancellor.

“His failings clearly demonstrate why the decisions over Scotland’s economy should be made by people in Scotland who by definition are the best placed to make these decisions.

“Only a Yes vote in 2014 will secure that right for people in Scotland and ensure that we no longer have to pay the price of a Westminster Chancellor’s inability to fix his mistakes.”

The Ernst & Young paper follows reports that a promised boost to the Scottish economy of a re-deployment of thousands of troops, is under threat.

This weekend it emerged that the creation of a ‘super garrison’ near Edinburgh looks set to be scrapped by the MoD, with the troops to be based in England instead.

Confirmation will be a blow to the local economy which would have benefited from the new barracks complex which was to be built at Kirknewton in order to house troops returning from Germany.

 

The Ernst & Young ITEM Club report can be viewed at: http://www.ey.com/Publication/vwLUAssets/Scottish_ITEM_Club_2013/$FILE/EY_ITEM_Club_Scotland_2013.pdf

Comments  

 
# gus1940 2012-12-04 09:13
What we need is a Roosevelt style New Deal Program as was implemented in The US in the 30's.

This kickstarted The US Economy and led the way out of The Great Depression which was completed by the massive armaments orders generated by the start of WW2 and The US subsequent entry thereto following Pearl Harbor and Hitler's ill-judged declaration of war.
 
 
# robbo 2012-12-04 10:41
This is wrong. The new deal extended the depression and was frankly a disaster. Nor did WWII end the depression - It simply masked it. After the war the depression continued for 2 more years. Eventually massive forced austerity allowed the US economy to bottom out, readjust to the new demand profile and grow again.

This is the difference between a Keynesian and an Austrian economist. Keyensians measure spending as key, Austrians measure productivity. Keyensians see war spending and this "aha we're out of depression". Austrians realise that spending money to kill foreigners is not increasing the productivity or the quality of life or the population - nor is it sustainable.

Unfortunately the overwhelming majority of politicians are Keynesians and that is why we are in this mess.
 
 
# RTP 2012-12-04 09:32
Ewan Crawford: Trying times as ‘No’ camp drop ball

How did the Scotsman allow this have they at last seen the light???
 
 
# bodun 2012-12-04 11:19
In stark contrast, Kelvin MacKenzie wants a new indie party for London:
bbc.scotlandshire.co.uk/.../...
 
 
# alexb 2012-12-04 10:04
I'm afraid John Mason is whistling in the wind if he thinks that George Osbourne will release any cash to kick-start the shovel-ready projects. Why should a Tory Chancellor help Scotland when they have only one Scottish M.P, and very little popular support. The only way we can grow the economy is to have full control of all our finances. In other words, independence.
 
 
# John Souter 2012-12-04 11:30
Shovel ready projects! I think these will have to whistle for a while yet.

Westminster is using all available shovels feeding the frenzy of the still failing banks.
 
 
# From The Suburbs 2012-12-04 14:34
Well O/T but interesting article on mandatory Scots literature in Higher English exam paper.

scotsman.com/.../...
 
 
# UpSpake 2012-12-04 17:16
5 Billion of shovel ready projects to be announced for England tomorrow. My ears are pricked for the Scots announcements. Not holding my breath either.
 
 
# govanite 2012-12-04 17:59
O/T
Westminster to amend 'Act' of union !

According to BBC

Oh really !
 
 
# MacSenex 2012-12-04 19:09
This is all part of a scorched earth policy by all Unionists. Even the ones in the Scots Parliament are prepared to undermine everything it has achieved to preserve the Union.

A strange strategy which is bound to fail.
 
 
# fynesider 2012-12-04 21:06
dailyrecord.co.uk/.../...

I've sent her a F/B message suggesting she reads this:
newsnetscotland.com/.../...

Has a good think, then re-writes her speech

Also apologised if I got the wrong F/B page!
 
 
# oldnat 2012-12-04 21:32
Interesting to see that Record editorial. The No campaign must be aghast!

We are beginning to see more balanced coverage, as the print media see the potential consequences of simply printing Unionist press releases.
 
 
# jinglyjangly 2012-12-05 00:15
Interesting debate on Newsnight tonight
with Gillian Telt (Assistant Editor of FT)
saying she though that a Technorat will be in charge of the uk in a few years
I guess in a non euro economy that means the IMF running the UK.
Not much of a choice really bankrupt bitter together or investment with indepence
 
 
# PerryThePlatypus 2012-12-05 07:24
From BBC website:
"Chancellor George Osborne will tell MPs there is "no miracle cure" for the UK's economic problems when he delivers his Autumn Statement later."

Oh, yes there is, George...... Resign!!!
 
 
# admiral 2012-12-05 14:58
I thought I'd share this gem from the BBC's Robert Peston:

1429: Robert Peston Business editor tweets: Danny Alexander tells me that keeping AAA credit rating is not be all and end all. Sounds as though he's written it off #bbceconomics


Now, is this the same Danny Alexander that swore blind that an independent Scotland wouldn't have a AAA rating and that this would be a VERY BAD THING, indeed?
 
 
# call me dave 2012-12-05 15:22
£331M on the table for Scotland for'capital investment' over two years says George.

Thanks George! Getting our own money back is such a good feeling, will it make a few think about the consequences of voting yes in 2014.

It makes me more worried about the consequences of not voting yes.

We will only have this one opportunity and we had better take it.
 

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