Swinney: loss of AAA credit rating proves UK economic strategy has failed

Saturday 23 February 2013

Scottish finance secretary John Swinney has said the loss of the UK's AAA rating proves the UK's economic strategy has "completely failed".

After credit rating agency Moody's downgraded the country's AAA credit rating.for the first time since 1978 Mr Swinney said: "It is very clear that the economic strategy of the United Kingdom government has completely failed."

He explained that Westminster's approach towards tackling the recession by a "vigorous austerity programme" was argued by the UK government as a requirement in order to protect the AAA credit ratingSpeaking on BBC Radio Scotland, Mr Swinney criticised the Chancellor George Osbourne for his approach to capital expenditure, adding: "We could have invested more in our capital estates rather than reducing capital budgets by now 26%, a quarter, and the consequence of that is to deliver very sluggish economic activity."The UK government has got it wrong on all counts and it now needs the Chancellor to take action very swiftly in the budget to stimulate the economy and provide the platform for growth which they have failed to do since 2010."He also argued that an independent Scotland would have a better approach to managing their economy, he said: "What an independent Scotland would do, by any margin, would be to take a much more assertive position on delivering growth, on encouraging the expansion of the economy to generate the greater revenues and repair the public finances and that's the type of virtuous cycle that credit rating agencies like to see from governments."Danny Alexander, Chief Secretary to the Treasury, said that the financial future for an independent Scotland was a lot less secure than Mr Swinney suggests due to the country having "no track record".He said: "I think an independent Scotland would be in a much more difficult situation in terms of raising finance, in terms of its debt and its borrowing."Despite having the UK rating lowered by a notch to AA1, Mr Alexander remained positive about Westminster's economic strategy in place and said: "Of course this is disappointing news but I've always said the credit rating agencies are not the be all and end all."In the end what matters is having the right mix of policies to support the economy, to deal with the financial problems that we inherited and crucially to provide jobs in the British economy."He added: "Because of what's going on around the world, because of what's happening in Eurozone, progress has been slower than we would've hoped. But I've always said it's a long hard road that we're on but we have to stick to that path, we have to keep to that road because the alternative is much, much more difficult for this country."

Contextual targeting label:

Finance

Commenting & Moderation

We moderate all comments on HeraldScotland on either a pre-moderated or post-moderated basis. If you're a relatively new user then your comments will be reviewed before publication and if we know you well then your comments will be subject to moderation only if other users or the moderators believe you've broken the rules, which are available here.

Moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours. Please be patient if your posts are not approved instantly.

Swinney: loss of AAA credit rating proves UK economic strategy has failed

Commenting & Moderation

MOST READ

SPONSORED LINKS

MOST COMMENTED