JIM Murphy has called on the Scottish government to launch a resilience fund to protect people against “economic storms” such as the crisis facing the oil and gas industry, in a flagship policy announcement by Labour’s new leader in Scotland.
Mr Murphy said the Scottish government already had £100 million in funding from the UK Treasury for the next year to cover the cost of a fund aimed at protecting jobs and the economy in crisis hit parts of the country.
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The Scottish Labour leader said a “pot of cash set aside for economic shocks” could be used to help retrain workers and pay for business aid in areas where a major employer has pulled out.
Mr Murphy hailed the plan as an “entirely new approach” as he unveiled the scheme on Tuesday during a visit to Aberdeen where he held talks with energy industry bosses and unions following a dramatic decline in oil prices in recent months.
The East Renfrewshire MP set out his latest pledge a day after promising funding for 1,000 extra nurses if he is elected as First Minister at the 2016 Scottish Parliament elections.
Mr Murphy also said that Scottish Labour would double the number of specialist nurses dedicated to treating motor neurone disease from seven to 14 following a campaign by one of the party’s former spin doctors Gordon Aikman, who is suffering from the illness.
Local councils such as Aberdeen would be able to bid for a share of the resilience fund if the area was hit with major oil industry job losses under the plan, which Mr Murphy said he was asking the Scottish government to back in an “immediate” demand made by Labour.
However, Mr Murphy said the cash would be potentially available to all areas ravaged by unemployment and could have been used when Scotland’s steel industry suffered heavy losses with the closure of the Ravenscraig steelworks in Lanarkshire in 1992.
He said that if the Scottish government failed to back the plan, he would launch an immediate consultation on the resilience fund, which he said would be implemented if he is elected as First Minister in 2016.
Mr Murphy said the fund would operate on a similar basis to the Belwin scheme, which is designed to recompense authorities for the costs of emergency damage caused by flood and storms.
He said: “The Scottish government should do things differently. I want to set up a resilience fund and I’ll approach the Scottish government to take forward this idea that a specific pot of Scottish government cash should be set aside for economic shocks.
“It’s based on the Belwin scheme for floods and storms. This would be about dealing with economic storms that may affect areas.”
Mr Murphy, speaking at a press conference in Aberdeen, said the Scottish government could use some of the £100 million he claimed it had in Barnett consequential - funding Scotland received every year in a block grant from Westminster.
He said the Scottish government had been handed £231 million by Westminster in consequential funding, with £127m already committed to the National Health Service north of the border.
However, Mr Murphy suggested the rest of the cash was uncommitted and that part of it could be used to pay for a resilience fund.
The Labour leader also said the UK government should accelerate funding pledged in the Chancellor’s autumn statement to Holyrood to allow it to have a resilience fund and provide a “specific designated sum of money to protect communities.
Mr Murphy sad: “The idea is that we set aside a pot of cash and local authorities apply.
“Local authorities would make applications. There’s no reason why it shouldn’t happen, as £100 million is as yet unspent in Barnett consequentials.
“I want to see the proposals in the autumn statement taken forward and implemented in a quicker time.
“I want the Scottish government to set this up, but If they don’t I will launch a consultation on implementing this if I’m elected as First Minister.”.
Mr Murphy went onto state that the scheme could be used by local councils awarded a share of the fund to offer business rates aid to encourage new investment, as well as provide training opportunities for unemployed people.
He said: “It’s to protect people from the harmful consequences of local economic shocks such as in Aberdeen if the crisis continues to develop.
“If it had been around at the time it could have been used to help steel workers who lost their jobs in areas like Lanarkshire.”
Mr Murphy also claimed that the SNP’s economic credibility was in “tatters” as he accused the party of over estimating the value of potential oil receipts in an independent Scotland during last year’s referendum.
Energy Minister Fergus Ewing responded by pointing out Labour’s own part in the failings of the oil industry, while playing down the importance of the crisis.
He said: “Jim Murphy’s belated conversion to backing an oil fund is welcome, especially after he and his Labour colleagues failed to deliver a single penny by refusing to establish such a fund when they were in office and had the chance.
“We have long called for the UK to set up such an oil fund – calls which have been ignored by successive Labour, Tory and Lib Dem Westminster Governments, despite receiving billions of pounds in revenue from more than four decades of North Sea production
“Current prices are nothing new – in 1999 they were close to $10 a barrel, and Norway had only just started to invest in its oil fund, which is now worth more than £500 billion and is the biggest sovereign wealth fund in the world, growing by an average of $165 million every day over the last 13 years.
“Oil is a bonus, not the basis of Scotland’s economy, and will be a fantastic asset for decades to come – many independent international forecasts expect the price to rise again this year, with OPEC predicting a price of $110 per barrel for the rest of the decade and around $100 in real terms in the long-run.
“The Scottish Government last year invested £15 million in the oil and gas sector via Scottish Enterprise and a further £10 million investment in the Oil and Gas Innovation Centre.
“In addition, hundreds of companies supported by our enterprise agencies are expected to increase export sales and turnover by hundreds of millions of pounds.”
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