Danny Alexander: SNP plan will derail recovery

NICOLA Sturgeon’s key demand that austerity measures would have to be eased as the price of SNP support for a Labour government would derail the economic recovery, Chief Treasury Secretary Danny Alexander has claimed.

Comments were made by Chief Treasury Secretary Danny Alexander. Picture: Greg Macvean
Comments were made by Chief Treasury Secretary Danny Alexander. Picture: Greg Macvean

Mr Alexander cites official Treasury research, published today, which warns that Ms Sturgeon’s call for an extra £180 billion of public spending to ease the impact of more austerity would increase UK debt – contrary to the First Minister’s claims.

The findings come after senior Labour politicians refused to rule out the prospect of a deal with the SNP and polls that predicting the Nationalists could hold the balance of power after May’s election.

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Ms Sturgeon used a keynote speech in London last month to warn that Ed Miliband would have to adopt a “more moderate” approach to spending cuts if he wanted the backing of SNP MPs at Westminster. The First Minister claimed this would still bring down the UK’s soaring national debt.

But the Treasury analysis shows debt as a share of GDP would rise from 81.9 per cent now to 82.2 per cent in 2017-18, and that by the end of the new parliament, this would stand at 81.4 per cent, compared with 81.1 per cent at the start.

Mr Alexander said: “Once again, the SNP have been caught out on the economy. Their economic plans for a separate Scotland in the run-up to the referendum were simply not credible – the recent crash in oil prices would have blown a massive black hole in Scotland’s finances.

“Now we see the SNP would blow a huge hole in Britain’s finances too. Again and again, the SNP have taken their eye off the ball – on upgrading the A9, on the state of Scotland’s NHS and now with the future of our economy. Scotland’s economy is growing fast and creating jobs. These figures show that the economic recovery would not be safe in Nationalist hands.”

The SNP looks poised to make big gains from Labour in May, with a series of recent polls suggesting the party could take more than 50 of Scotland’s 59 seats. With the Tories and Labour running neck and neck at UK level, the SNP could deprive Ed Miliband’s party of an overall majority.

Shadow Scottish secretary Margaret Curran, who could lose her Glasgow East seat, was among a host of senior Labour figures who refused to rule out a deal with the Nationalists over the weekend.

Asked whether Scots were attracted to the prospect of a minority Labour administration “held to account” by a large contingent of SNP MPs, she said: “That’s the argument I’m having with people on the doorsteps.

“I think that’s a mistake and I do point out to constituents that the last time the SNP had a confidence and supply deal was with the Tories in the Scottish Parliament in 2007, and I think that wasn’t to the benefit of Scotland then.”

Ms Sturgeon has ruled out any deal with the Tories but suggested she could reach an informal arrangement with Labour that would allow Mr Miliband to become prime minister.

In her speech at the London School of Economics last month, Ms Sturgeon said “debt and the deficit should be reduced as a percentage of GDP but more gradually than either of the largest UK parties is proposing”.

She went on: “If you limited real-terms growth in departmental spending to half a per cent each year, it would reduce debt as a share of GDP in every year from 2016-17. But it would also permit a further £180 billion of investment across the UK over the next four years.”

She made it clear this would be a key issue in brokering any post-election deal with Labour. “I am not going to support governments that plough ahead with austerity that damaged the poorest in society,” she said.

“A Labour government that looked to the SNP for support would have to moderate its position in that regard. That would be popular not just with SNP supporters but I’m sure a lot of traditional Labour supporters in Scotland and across the rest of the UK as well.”

The SNP yesterday highlighted House of Commons Library research that has revealed the proportion of GDP spent on child benefit has fallen to 0.6 per cent – its lowest level since 1977.

The Child Poverty Action Group has previously estimated up to 100,000 more children in Scotland risk being pushed into poverty by 2020.

SNP work and pensions spokeswoman Dr Eilidh White-ford said the latest figures were “an appalling indictment of the lack of importance the Westminster government attaches to reducing child poverty”.

She went on: “It shows that there is a complete lack of will amongst the Westminster establishment to tackle the increasing child poverty being driven by their austerity agenda.”

SNP deputy leader Stewart Hosie said a deal whereby the party could support Labour in votes on the Budget or confidence motions was “perfectly viable”. But he stressed the SNP could not “countenance supporting £100 billion on Trident and its replacement”.