GERMAN ECONOMY PLAN SHOWS LEVEL OF AMBITION WE NEED

ON MONDAY, I published a blueprint to reboot the economy, with an £80billion stimulus and practical recommendations.

Yesterday, the Prime Minister announced £5billion of investment to much fanfare. For all his rhetoric, the announcement falls short of the ambition we need for our country.

In an economic crisis, we need bold proposals. Of course, any infrastructure spending is welcome, but yesterday’s announcement was underwhelming in scale and vision.

Now is the time to protect and create jobs across all sectors of the economy, as well as ensuring we take decisive steps to reduce inequalities.

If we want to see a government that is truly building its economic future, we need look no further than Germany, where they have developed an economic stimulus package worth four per cent of GDP.

With the economy contracting as a result of the entirely necessary economic shutdown, this is the level of ambition we need – policies that boost consumption, promote investment and protect jobs.

On Monday, we set out how a

UK-wide package of £80billion could finance a temporary reduction in VAT to 15 per cent in general and to five per cent for tourism and hospitality.

We could see a wage subsidy for sectors that have been hardest hit and investment in capital projects to boost the digital economy and accelerate our move towards net-zero emissions.

Most importantly, this level of investment could help to prevent the kind of austerity which causes so much damage to communities.

The Chancellor must prioritise economic stimulus over austerity and not try to cut the deficit at the cost of households and businesses.

There are also doubts about whether the Prime Minister’s £5billion package is actually new money – certainly, the indication is that all spend for this year is just recycled from existing budgets.

Whatever the detail, it is clear that this plan does not deliver what Scotland needs.

I will continue to press for more investment, alongside reforms to allow the Scottish Parliament greater flexibility to access the funds it requires.

This does not need sweeping new powers – just extra freedom to use resources better. At the moment, if the Scottish Government frees up resources on capital projects, we are not allowed to use this money for day-to-day spending – for example on our schools or the economy. To me this makes no sense, particularly at a time of national crisis.

These are extraordinary times – perhaps the most challenging of our lifetime. The only way to truly meet those challenges is with courage, ambition and a clear vision of how we help businesses and keep people in work.

But extraordinary challenges require an extraordinary response. And if the UK Government is not willing or able to take the kind of action needed, then Scotland must have the additional financial powers needed to do the job.