NICOLA Sturgeon has unveiled a £100 million 'stimulus' package aimed at shoring up the post-Brexit economy, but was challenged to instead boost business by standing up to SNP "fanatics" and ruling out a new independence vote.
The First Minister said funding would be brought forward this financial year to pay for infrastructure projects that are already in the pipeline, announcing an initial £5m to fast-track an expansion of Golden Jubilee hospital in Clydebank, and saw her plan welcomed by business representatives and unions.
However, the Scottish Secretary, David Mundell, said it was her stance on a new independence referendum that was proving most damaging to business while the Liberal Democrats accused her of deploying "smoke and mirrors" after it emerged that the cash would come from a budget underspend in the last financial year rather than new sources.
Read more: Nicola Sturgeon unveils £100m 'stimulus' plan in bid to bolster post-Brexit economy
The row came amid growing concerns over the prospects for the economy following the EU referendum result, with a gloomy Bank of England yesterday warning that UK firms are expecting to put hiring and expansion on hold as they brace for a trading hit.
Ms Sturgeon called for more action from the UK Government, claiming it should roll out its own stimulus but had yet to take any meaningful action to alleviate uncertainty, and also revealed new plans to provide assistance to businesses uncertain about the future.
She said: "It is important to act now to support and stimulate the economy. 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."
Mr Mundell, who yesterday visited a hub for fledgling businesses in Glasgow that was part-funded by the UK Government as part of a tour in which he is seeking views on a post-Brexit deal with Europe, blamed Ms Sturgeon for ramping up uncertainty.
He said: "There are indications that some people in the SNP just see this as an opportunity to further the cause of independence. I hope Nicola Sturgeon and the Scottish Government are serious about getting the best possible deal for Scotland out of these negotiations... on a team UK basis.
Read more: Nicola Sturgeon unveils £100m 'stimulus' plan in bid to bolster post-Brexit economy
"Nicola Sturgeon has made an announcement about money that had been underspent from last year, in order to boost the Scottish economy. I think the number one thing that Nicola Sturgeon could do right now to boost the Scottish economy is to remove the uncertainty of a second independence referendum.
"Instead of reducing uncertainly in Scotland, [she] is maximising it by threatening another independence referendum. That is not the way to increase business confidence.
"What she needs to do is take the independence issue off the table. I know it's very hard for her because she's got a lot of very fanatical people who are obsessed with having another independence referendum. But there is no mood in Scotland for another independence referendum and certainly not for the uncertainty talking about it brings. It's already having an impact that there's additional uncertainty in Scotland... it's very, very unhelpful."
Read more: Nicola Sturgeon unveils £100m 'stimulus' plan in bid to bolster post-Brexit economy
In further signs of a post-Brexit hit to the economy, there were warnings that housing market in Scotland had continued to slow during July. A new report found that Aberdeen's economy is likely to be "severely challenged" in the period leading up to Brexit and beyond while the return on some UK government debt turned negative after the Bank of England missed its target in a new bond buying operation.
Reacting to the First Minister's £100m plan, LibDem leader Willie Rennie said it was not a post Brexit stimulus but "just post-holiday hogwash". He added: "The SNP are talking about spending yesterday's money tomorrow and asking us to believe that this is urgent action. This is ludicrous. Smoke and mirrors over funding that has been sat in Scottish Government bank accounts since last year will not provide the boost our economy so desperately needs."
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