Osborne’s austerity ‘harming economy’

Published on 29/01/2012 00:00

THE UK Government’s “austerity approach” is harming rather than helping the economy, according to the Finance Secretary.

John Swinney is due to give a keynote speech on the state of Scotland’s economy to the David Hume Institute in Edinburgh on Thursday.

Swinney will say Chancellor George Osborne’s strategy has placed “too much emphasis on austerity, and not enough on promoting growth”. He will argue that all the blame for last week’s GDP figures – which revealed the UK economy shrank more than expected at the end of last year – cannot be attributed to the Eurozone crisis.

“I have argued on a number of occasions that while I recognise the clear need to address the legacy of debt inherited from the previous UK Government, this can only be achieved if there is sufficient growth in the economy. This is not what we are seeing,” he is due to say.

“Continuing uncertainty in the Eurozone is playing its part in the disappointing growth figures.

“However, not all the blame can be laid at the door of the Eurozone. Much of the responsibility for the lack of economic growth must therefore be laid at the door of 11 Downing Street.”

Osborne has argued that his government’s efforts to cut expenditure offer the best solution to rebalancing the economy.

However, Swinney will argue that severe austerity measures could threaten growth and end up hampering recovery.