Scottish Budget 'inadequate'

Published on Saturday 24 October 2009 19:56

BUSINESS leaders have criticised the Scottish Government's "inadequate" Budget plans, claiming they are not nearly radical enough to lift the country out of recession.

CBI Scotland said ministers should redraw their 35 billion draft 2010/11 Budget, and suggested Scottish Water should be privatised and the number of councils cut.

The CBI's own Budget blueprint also said the Glasgow airport rail link (GARL), controversially axed by the finance secretary John Swinney, should be reinstated.

The CBI said GARL could have been rescued had more savings been made and argued that axing it did not sit easily with the government's ambition to grow the economy.

In its official response to Swinney's draft Budget, 48 hours after official figures revealed Britain was in its longest recession in recorded history, the CBI acknowledged the "bleak" state of UK finances.

It said public sector net debt was expected to double by 2013, by which time it would cost 63bn a year just to service the interest payments.

The CBI argued that public sector payrolls and pensions should be "restrained", but said investment in the economy ought to be supported rather than cut."Sacred cows" ought to be challenged in order to reduce public spending, the CBI said. It criticised "piecemeal" spending cuts, saying scrapping infrastructure projects was the "wrong approach".

CBI Scotland director Iain McMillan said: "The devolved spending plans are inadequate, given the extent of the fiscal stringency which will be required over the next few years and the need to sustain investment in and support for economic growth.

"A far bolder approach to making savings is required, one which protects rather than cuts important GDP- enhancing investments."

A spokesman for Swinney said: "The draft Budget is focused on promoting economic recovery and protecting frontline services."