George Osborne's boost for Scots economy

Published on 03/10/2010 20:15

Chancellor George Osborne is to hitch the UK's future economic fortunes to renewable energy and medical sciences, in a move that could massively boost the Scottish economy.

In his conference speech today, he will tell his party the country can no longer rely on wealth generated by the City of London and the financial sector and that the investment priorities will be areas of maximum growth.

He will highlight green energy and medical sciences, two of Scotland's strongest growth industries, as the way forward.

"Britain has no divine right to be one of the richest countries in the world," he will say.

"As economic power is shifting to the east, there is nothing automatic about our prosperity. So we will give priority to spending that supports growth in our economy. That means funding a green investment bank and carbon capture and storage so we reap the financial rewards of the green energy revolution."

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It is estimated at least half of the 2 billion expected to be put into the green investment bank will end up being spent in Scotland. And Mr Osborne's words appear to reflect the recent push by the SNP government in Edinburgh to have support focused on green energy sources.

However, Mr Osborne will also highlight there will be no retreat over spending cuts. This comes amid rows over how quickly welfare should be reduced and concerns over the future of defence spending.

Mr Osborne, along with Lib Dem Chief Secretary to the Treasury Danny Alexander, is due to unveil the comprehensive spending review on 20 October, which could see cuts of up to 40 per cent to some government departments.

Mr Osborne will today compare the coalition government's policies with Labour under new leader Ed Miliband. He will say that if the structural deficit of 109bn a year is not tackled, Britain would be paying for decades.