By Keith Aitken in Edinburgh | 11 February 2015
First Minister Nicola Sturgeon chose a speech in London today to set out the Scottish Government’s alternative to the Westminster ‘cosy consensus’ in favour of fiscal austerity.
Sturgeon told an audience at University College that the UK coalition’s deficit eradication strategy, as endorsed by Labour in aim if not name, is ‘morally unjustifiable and economically unsustainable’. She called instead for a real-terms public spending increase of around 0.5%.
In a BBC interview this morning, the first minister referenced Institute of Fiscal Studies research to argue that such an approach could pump some £180bn into the UK economy by 2020, while continuing to make progress in reducing the fiscal deficit.
The speech is being seen as a move by Sturgeon’s Scottish National Party to set out a distinctively Scottish economic strategy ahead of the UK general election, and to appeal to Labour’s traditional Scottish base, where polls suggest the SNP could make significant inroads. She denied in the interview that she was also seeking to draw “red lines” for a possible coalition deal with Labour.
‘The UK Government’s economic policy has failed, categorically and comprehensively, and not by my reckoning but on the UK Government’s own terms,’ she will tell her university audience. ‘It has failed to meet its own deficit-reduction targets.
‘But what the UK Government is now telling us is this: austerity hasn’t worked, so we need even more of it.’
Sturgeon told the BBC that austerity had impacted hardest on the poorest and most vulnerable in society. ‘What I’m arguing is that to look at the deficit in isolation is far too narrow, because although that’s important, it’s also important to have stronger, more sustainable, more solidly based economic growth, it’s important to tackle inequality, and it’s important to protect public services.’
But Scottish Secretary Alistair Carmichael responded that the coalition’s fiscal strategy was working, and that its actions in cutting borrowing by £52bn since taking office had been rewarded by international market confidence and a growth rate that rivalled the US for the top spot in the G7 economies.
