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By a Newsnet reporter
UK Chancellor George Osborne has been urged to adopt an economic plan MacB as he prepares to deliver next week’s Autumn Statement.
Speaking ahead of Tuesday’s speech, SNP Westminster Treasury spokesperson Stewart Hosie MP called on the UK Government to “stop dithering and start delivering” measures to boost the economy and enhance consumer confidence.
Mr Hosie, a Member of the Treasury Select Committee, said:
“George Osborne must stop dithering and start delivering a plan MacB to stimulate the economy by supporting capital investment, improving access to finance and enhancing economic security.
“So far the Chancellor’s rhetoric has not been matched by the arithmetic, and the autumn statement must bring a change of direction.
“The Treasury must follow the successful strategy of the Scottish Government and set out a targeted, cost effective, programme of new capital investment. Despite a 36 per cent real terms cut in its capital budget, the Scottish Government are using every lever at its disposal to invest more into capital in the coming years – with the result that investment in infrastructure is rising by a quarter in Scotland over the spending period.”
Echoing calls from the construction sector Mr Hosie said:
“In particular, the construction sector is crucial and the Chancellor should respond positively to the proposals by many in the 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.
“Action is also needed 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.”
Mr Hosie’s comments come as the Organisation for Economic Co-operation and Development (OECD) is predicting the UK economy will enter another recession early in 2012. OECD officials are said to have advised the UK coalition of a possible need for an economic plan B.
The coalition are believed to be considering plans to try to attract £50 billion worth of investment capital in order to boost infrastructure projects, something the SNP has been calling for.
The SNP’s Treasury spokesman also highlighted the problems faced by small to medium sized businesses in accessing finance. Prime Minister David Cameron has already indicated that a new “credit easing scheme” is to be announced that will reduce the cost of loans for small and medium-sized businesses.
Mr Hosie called for help for Scotland’s cutting edge gaming industry, adding:
“Scotland is home to a world class video game industry, including in my own Dundee constituency, and there is a strong case to reverse the last Labour Government’s decision to abandon proposals for tax relief for the video games industry.
The SNP MP also addressed speculation that the UK Chancellor is planning to cut welfare benefits and said:
“This must be an autumn statement that delivers for individuals as well as businesses because economic confidence has been weakened as household budgets are being squeezed by rising fuel and food prices, so it is imperative to mitigate these pressures.
“Again the Scottish Government has shown the way forward by acting to continue freezing the council tax, abolish prescription and protect concessionary travel. In contrast, there is growing concern at 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.
“It is clear that Scotland needs the same financial and economic powers as other nations have, so that we can grow our economy and revenues as the only alternative to a decade or more of Westminster-dictated cuts. We have used the powers we have wisely – we now need the same powers as other countries have in order to sort this mess out.”
Labour leader Ed Miliband has also urged the Chancellor to ‘change course’. Mr Miliband said that Mr Osborne should focus on reducing VAT, bring in a ‘bank-bonus’ tax and move forward ‘essential’ capital investment.
Mr Miliband insisted that the coalition’s deficit strategy was a gamble that was failing and that Mr Osborne should consider more borrowing to help the economy.
Answering critics who have said that more borrowing is too expensive, Mr Miliband said: “the answer is the cost of not acting is the more expensive choice, economically and socially,”
Last week SNP Finance Minister John Swinney called on the Chancellor to borrow £2 billion in order to protect the Scottish economy.
Mr Swinney’s request was subsequently dismissed by Lib Dem UK Treasury Chief Danny Alexander.