FINANCE Secretary Kate Forbes has handed proposals to re-start Britain’s economy to the UK Government – including plans for a national debt plan and extending Scotland’s financial powers.

The UK-wide £80 billion proposals have been drawn up to help the economy recovery amid the emergence from the lockdown – with incentives for low carbon projects and new fiscal rules which prioritise economic growth over reducing the deficit during times of crisis.

The report stresses that "either the UK Government must take steps to respond to these challenges, or provide the Scottish Government with the powers and responsibilities to deliver the response the people of Scotland need".

The blueprint, brought forward in a new Scottish Government report, includes cutting the standard rate of VAT to 15 per cent for six months once current restrictions have been lifted – while the tourism and hospitality sector would move onto a five per cent VAT rate.

The ten-point plan also points to a two pence cut in employers’ National Insurance contributions to reduce the cost of hiring staff.

READ MORE: How Scotland can kickstart the economy through green energy

Other actions the Scottish Government has suggested to leaders south of the border include introducing a jobs guarantee scheme for young people, a national debt plan being set up to help business and household budgets recover from the effects of the pandemic and plans to accelerate major investment in low‑carbon projects, energy efficiency and digital infrastructure.

The document also renews calls to extend Scotland’s financial powers to allow it to shape its own response to the pandemic.

The Finance Secretary has stressed the blueprint contains “bold, practical steps which would provide an immediate boost to our economy, protect existing jobs and deliver new ones”. 

READ MORE: Kate Forbes: Full fiscal autonomy would help Scotland 'respond fully' to Covid-19 crisis

Ms Forbes told the Herald: “I think that certainly the devolution settlement and the fiscal framework in particular, which is of course the rules that set out what we can and can’t do financially, were never designed with a pandemic in mind. 

“At these extraordinary times, we need to see some of those rules relaxed so that we can use our budget most effectively in order to continue to invest. 

“Clearly there are additional costs that we know of, whether that’s ensuring that our transport system can cope with social distancing, whether it’s supporting schools.” 

She added: “These are relatively minor in nature- these are minor fiscal flexibilities that most governments don’t have to battle for but can use quite simply in order to allow them maximum effectiveness when it comes to using their budget. 

“We’ll continue to press the case – I think it’s a very persuasive case, it’s got cross-party support behind it, all parties bar the Conservatives have backed it. In my mind, it’s absolutely essential in order to allow us to continue to combat coronavirus but also to support the economy and society to cope with recovery.” 

READ MORE: Sir Tom Hunter urges Nicola Sturgeon to let business lead Covid recovery

The plans have been welcomed by Benny Higgins, who leads the Scottish Government's advisory group on economic recovery and has drawn up recommendations to help Scotland’s economy bounce back from the crisis. 

He said: “I welcome Kate Forbes’ proposals to the UK Government. The response recognises the need for fiscal stimulus and the criticality of getting Scotland back to work.   

“It is very encouraging that Scottish Government are responding immediately to recommendations put forward by the advisory group, including the jobs guarantee for young people.”