First Minister demands change of policy

Sturgeon calls for government to spend more as an alternative to austerity

Nicola SturgeonFirst Minister Nicola Sturgeon today laid down a bold challenge to the Westminister government by calling for increases to government spending as an alternative to austerity.

In a speech delivered in the heart of London, Ms Sturgeon set out an “alternative plan” to tackle the economic deficit which would enable ministers to raise £180 billion to invest in infrastructure, skills and education.

This could be achieved by half a percentage point increases in spending by government departments which would see debt reduced as a share of GDP over four years, she said.

Speaking to a packed audience at University College London, she said there should be no “trade off” between reducing the deficit and having a fairer society, with a clear link between economic growth and reducing inequality.

Ms Sturgeon highlighted how successful economic policies such as gender equality and the living wage “have a sense of fairness at their heart” and help grow the economy by ensuring that Scotland maximises the skill and innovation of all its people.

The First Minister also renewed her calls to scrap the renewal of Trident, with the £100bn savings over the next 35 years to be invested back into public services.

“The Scottish Government has balanced its budget every single year and that’s something which has required genuinely tough decisions. But by and large, we’ve carried people with us because the policies we’ve adopted have clearly had a sense of fairness at their heart,” she said.

“In terms of the UK economy, we believe that debt and the deficit should be reduced as a percentage of GDP but more gradually than either of the largest UK parties is proposing.

“For example, if you limited real terms growth in departmental spending to half a per cent each year it would reduce debt as a share of GDP in every year from 2016-17. But it would also permit a further £180 billion of investment across the UK over the next four years.

“We could protect the infrastructure, education and innovation which will support sustainable growth. And we could take a different approach to the crude cuts that reduce work incentives and impact directly on disabled people and families with children. We could manage the deficit down, without destroying the social fabric.

“We could also release savings through some more straightforward choices. Deciding not to renew Trident, for example, would save around £100bn, at 2012 prices, over the next 35 years. That is money that could be – and should be – invested instead in health and education.

“By taking a different approach – by offering an alternative to the austerity agenda – we would ensure that fiscal consolidation is consistent with a wider vision of society. A society which strives to become more equal, as part of becoming more prosperous.

“We simply don’t accept that there’s a trade-off between balancing the books and having a balanced society; fairness and prosperity can go hand in hand. It’s basic common sense that as a society, we will do better if we can benefit from the skill, talent and innovation of all of our people.

“But there are other reasons too. Higher incomes would increase demand and boost the revenues needed for investment in infrastructure and education. More equal economies are more resilient and less likely to depend on borrowing and credit.”

The First Minister continued: “But one thing we’re already very clear on, is that we see the private sector as being an essential partner in all of this. They are not only vital to but will also benefit hugely from helping to build a fairer society. And so we’re also encouraging and supporting business to contribute to a fairer society – because that’s clearly in their own best interests.

“Gender equality is a good example of that. The Scottish Government is leading by example – the Scottish Cabinet is one of only three in the developed world to have a 50/50 gender split. But we’re also launching a major drive – called 50/50 by 2020 – to encourage gender equality in public, private and third sector boardrooms.

“And we have a clear focus on the quality of work – people’s experience in the workplace. The Scottish Government already pays the living wage to all our employees; and we’re using procurement policy, where we can, to encourage its use in all public sector contracts. Now we are funding the Poverty Alliance to run a scheme for accrediting living wage employers.

“Essentially, we are appealing to companies’ sense of enlightened self-interest. In doing so, we are encouraging them to commit to good business practices – such as innovation or internationalisation – and to good employment practices; such as the living wage, gender equality or supporting workforce engagement.

“So we will make the case for a more rational economic policy at Westminster. And we will use the powers we have in the Scottish Parliament to pursue a different approach; one based on partnership, fairness and prosperity.”

Graeme Blackett from the pro-nationalist business group N-56 said:

“The best way to address the public sector deficit and debt position is to grow the economy and to do this there needs to be a recognition that the needs and opportunities of the Scottish economy differ from those of the UK as a whole.

“Government and business need to work together to develop and implement a growth strategy, which includes investment in infrastructure and innovation and this should have not just a UK but also a clear Scottish dimension.”

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