Linda Fabiani MSP for East Kilbride has backed a letter from Finance Secretary, John Swinney to the UK Chancellor for new initiatives to stimulate economic growth in his Autumn Statement.
Linda said “The Chancellor must use the opportunity his Autumn Statement gives him to put in place new measures to boost the economy and enhance consumer confidence.
“Under the current devolution settlement, much of our economic policy is controlled by Westminster. The Scottish Government is doing all it can to boost economic growth with its limited tools therefore we need Westminster to put in place the appropriate steps to allow us to grow the economic and create jobs.”
Finance Secretary John Swinney has written to the Chancellor ahead of the UK Autumn Statement on 29th November. Mr Swinney said “Scotland is the most competitive environment for business in the UK and the Scottish Government and our enterprise agencies have secured new investment in recent months from major companies such as Avaloq, Dell, Amazon, FMC Technologies and Doosan Power Systems. Yet with the Bank of England again downgrading its forecasts, the UK Government must take urgent action to stimulate the economy by supporting capital investment, improving access to finance and enhancing economic security.
“In the face of a 36 per cent real terms cut to our capital budget, we are using all levers at our disposal to invest even more into capital over the next three years. As a result of our £2.5 billion Non-Profit Distributing capital programme and switching of resources from revenue to capital, infrastructure investment in Scotland will now rise year-on-year throughout the spending period. The UK Government must do the same and set out a targeted, cost effective, programme of new capital investment.
“The construction sector is crucial and I want the Chancellor to consider the proposals put forward by many in the construction sector to reduce the rate of VAT on repair and maintenance work to houses from 20 per cent to 5 per cent. This would help improve our housing stock, create jobs and potentially bring empty homes back into use.
“I will welcome any action that can be taken to help pension funds and other large institutional investors to channel a proportion of their investment into major infrastructure projects, while reducing the interest charged on local authority public borrowing would let councils maximise their part in supporting the economy.
“Securing affordable access to finance is still a serious challenge for many businesses and Project Merlin must fully deliver its lending commitments, particularly to small and medium sized firms. Encouraging new entrants to the banking market would provide businesses with alternative options when seeking finance and will help boost competition in the sector. Improving financial understanding of SMEs is a key component, so I have suggested the UK puts in place a financial readiness campaign, aimed at SMEs, to build on the Better Business Finance commitments already in place.
“Scotland is home to a world class video game industry and there is a strong case to revisit the decision to abandon the previous UK Government’s proposal to offer tax relief for the video games industry.
“Economic confidence has weakened in recent months and household budgets are being squeezed by rising fuel and food prices, so it is imperative to mitigate these pressures. Our Government has acted to continue freezing the council tax, abolish prescription and protect concessionary travel. Yet I am concerned by recent reports that the UK Government is considering uprating benefit levels next year by less than the rate of inflation. Increasing that would slash the incomes of some of the most vulnerable in our society, and I have urged the Chancellor not to cut benefits incomes next year.
“Taken together, these measures will help accelerate the economic recovery, protect jobs and in turn rebuild the UK public finances.”