Leaders: Policy change needed now to stimulate growth

Published on 07/09/2012 00:00

ANY doubt over the frustration in Scotland over the lack of action by the coalition government to address our moribund economy should be dispelled by two forceful interventions coincident with Chancellor George Osborne’s visit to Scotland yesterday.

The first, from Jim McColl, chief executive of Clyde Blowers, warns that Scotland’s economy will continue to flatline unless there is a policy shift by the chancellor to stimulate growth, particularly in the construction sector.

Mr McColl, having argued in the past that full fiscal autonomy should be offered to Scots in a referendum, now concludes that “only independence… will allow England and Scotland to pursue distinct economic policies in the face of different demands and competitive pressures.”

The second, from four prominent economists, backs First Minister Alex Salmond’s repeated calls for UK government capital investment “to stimulate, not just construction, but by extension broader economic growth”. In the letter, signed by four professors, they say it matters less what the change in policy is called – “Plan A+, Plan B, Plan Mac-B” – what is important is “having the courage to admit the need for change when it is so desperately required”.

Mr Osborne, in his speech to the CBI Scotland annual dinner last night, said that despite the “uncertain” outlook “there are some positive signs. Our economy is healing – jobs are being created [and] manufacturing and exports have grown as a share of our economy.” But the fact is that the economy is still mired in recession, and the OECD announced yesterday it had slashed its forecast for the UK economy from growth of 0.5 per cent to a contraction of 0.7 per cent.

Moreover, the critique advanced by Mr McColl and the four economists is shared in varying degrees across the UK. There has been growing criticism over the time it has taken for the coalition government to respond to the economic stagnation and advance infrastructure projects from political rhetoric into reality. If only some of the urgency shown on the development of London Olympic facilities were evident on projects elsewhere in the UK there would have been no need for Mr McColl to cite the shocking 6.9 per cent decline in Scotland’s construction sector as evidence for his case.

It is certainly true that the eurozone crisis has hit business confidence. But the move by the European Central Bank yesterday to buy struggling countries’ bonds could signal that the worst is past. But the euro crisis should never have been an excuse for the coalition to sit back and do nothing.

Construction is a critical part of Scotland’s economy, and the Scottish Government has long had to hand a long list of “shovel-ready” infrastructure projects on which work should have begun long ago. Four years after the first onset of recession we should not still be waiting for the Treasury properly to respond.

MPs’ new expenses raise old spectres

Might some old bad habits be creeping back on MPs’ expense claims? At the height of the expenses scandal, it seemed inconceivable that a Member of Parliament would dare to submit a claim that would seem loaded or excessive. But that does not mean MPs cease to put in for hefty legitimate claims. These machines can be expensive to service.

Latest figures show that the total amount of expenses claimed by MPs has risen to nearly

£90 million, compared with £71m the preceding year, a rise of 25 per cent. Has an MP’s life really got 25 per cent more expensive over the past 12 months? Even allowing for inflation, this is a leap that would bring a blush to a power company. Might the Commons be slipping back to the bad old ways?

Three top claimants are Liberal Democrat MPS but as one of these is Alastair Carmichael, MP for Orkney and Shetland, travelling costs will account for a very large share of the £185,389 claimed. There is less of an excuse for the two other Scots MPs in the top five. These are Brian Donohoe (Central Ayrshire) who claimed £182,003, and Willie Bain (Glasgow North East) who claimed £180,923. Circumstances have certainly changed for Labour MP Eric Joyce. Having topped the expenses table for four years, he has dropped well down the list.

It would be a bitter pill for the public to swallow if MPs expenses, having scandalised the nation, resulted in jail sentences and forced many to stand down, were allowed to enjoy “mission creep”.

Elaborate machinery was put in place to ensure there would never be a return to the bad old ways. It, too, is paid for by the public. It must not let its guard down.