AN additional £100 million will be spent on infrastructure projects this year in a bid to bolster the flagging post-Brexit economy, Nicola Sturgeon has announced.
Revealing an 'economic stimulus' package this morning, the First Minister said £5m would be used to speed up plans to expand Golden Jubilee hospital in Clydebank while other projects to receive an earlier than expected finding boost will be announced in the months to come.
The SNP leader said that she hoped the plan, which was welcomed by business representatives and Trade Unions, would help protect jobs and the wider economy amid warnings that a recession sparked by the UK's decision to quit the EU is a strong possibility.
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The Scottish Government will also set up a new dedicated service to provide information and support to businesses affected by the EU referendum, while a new Post-Referendum Business Network will work with business bodies, the Scottish Trades Union Congress (STUC) and the Scotland Office.
(Photo: Jamie Simpson)
The First Minister said: "Scotland is and remains an attractive and stable place to do business - however, there is no doubt that the referendum outcome has created deep and widespread uncertainty, with the impact on jobs and investment already being felt.
"The UK Government has not yet taken any meaningful action to alleviate uncertainty or to boost confidence, and there are very real concerns that the damage to the economy and to jobs will be severe and long lasting.
"It is against this background that the Scottish Government is announcing early action to boost confidence, stimulate economic activity and support business.
"Our Infrastructure Investment Plan is already delivering major infrastructure improvements, with projects worth almost £6 billion currently under construction - we will now inject a further £100 million of spending this year to accelerate planned projects."
The Scottish Government confirmed that the cash would come from a budget underspend last year, which had not yet been allocated, rather than increased use of new borrowing powers or making cuts elsewhere. Unlike the UK Government, the Scottish Government must balance its budget every year.
Ms Sturgeon called for more action from London to protect the economy. She added: "It is important that the UK Government also acts and I am calling today for urgent action on two fronts - firstly, early assurance about EU Structural Funds and, second, a UK wide stimulus package which, through consequential funding, would enable the Scottish Government to do more to accelerate capital spending."
(Photo: Jamie Simpson)
The Federation of Small Businesses welcomed the announcement, saying an information service for businesses would help address uncertainty when making medium-term decisions.
On the new round of infrastructure spending, FSB Scottish policy convenor Andy Willox said: "We need to squeeze every drop of value from this new spending – and that means ensuring that a fair share of these contracts, and associated sub-contracts, go to local firms."
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Grahame Smith, the STUC General Secretary, said: "The STUC strongly endorses the approach set out by the First Minister today. The Scottish economy, already weak due to the downturn in the oil and gas sector, risks falling into technical recession as a result of Brexit induced uncertainty. In this context it is important that the Scottish Government accelerates capital projects where feasible in order to support employment.
"The First Minister is also entirely justified in calling on the UK Government to act swiftly to help minimise the economic consequences of their calamitous handling of the referendum and its aftermath. With borrowing costs at a historic low, now is the time to invest to support jobs in the present and increase the economy’s capacity to grow sustainably in the future."
However Willie Rennie, the Scottish Liberal Democrat leader, branded the plan "post holiday hogwash".
He added: "Nicola Sturgeon is not planning to spend a single pound more on public services. She is cutting spending in one area to increase it elsewhere. This is not a post Brexit stimulus, it's just post holiday hogwash.
"The Scottish Liberal Democrat plan is to increase income tax by a modest penny on income tax to boost education. Supporting skills and education is the best way to prepare Scotland for the economic consequences of the referendum vote."
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