Eilidh Whiteford



Tuesday, 30 March 2010


Making his last speech in the House of Commons as MP for Banff & Buchan tonight (Tuesday) during the Budget debate, SNP Leader Alex Salmond MP said:

“As I argued during this same debate 12 months ago, until there is enough strength in the private sector, it is vital that the fiscal stimulus is maintained.

“I am not alone in arguing this case. The IMF argue that “one of the key lessons from experiences of similar crises is that a premature withdrawal of policy stimulus can be very costly, particularly if the financial system is weak.

“Even the Prime Minister agrees. With his warnings that "recklessly and rapidly" withdrawing government support would "risk driving our economy back into recession”. The Chancellor also argued in his Budget statement that “to start cutting now risks derailing the recovery.

“However, that is exactly what the Chancellor has done.

“Chart 2.5 of the Red Book clearly shows that the UK’s fiscal stance for 2010-11 is negative. Discretionary fiscal policy will act to tighten public spending and taxation relative to 2009-10. To quote one City analyst: “despite all the warnings about [the] withdrawal [of] support too early, the fiscal stance is being tightened in 2010/11 by 1.1% of GDP.

“This is the wrong approach. Among the G20, only Argentina and the UK stand apart in choosing to provide no further fiscal stimulus.

“This might have been justifiable if the rate of recovery had exceeded the Chancellor’s predictions.

“But since the crisis peaked in Autumn 2008, the Chancellor has delivered two Pre-Budget Reports and now two Budget statements. And each revision has seen his forecasts for economic growth been revised downwards.

“Just 18 months ago, the Treasury was forecasting a fall in output of between 1¼ to 1¾% in 2009 and growth of between 1½ and 2% in 2010. Now it forecasts a fall in output of 5% in 2009 with growth in 2010 of only 1 to 1½%.

“Mr Speaker, the evidence is clear – to support recovery and ensure sustainability in the public finances, we must invest in our economy.

“This is why we called for a further, targeted but cost effective stimulus, focusing on bringing forward a proportion of our capital budget into 2010/11.

“Compared to the package the Chancellor delivered, this action would have supported some 4,000 more jobs in Scotland – the majority in the construction sector.

“The benefits are not just limited to the short term. Such investment, be it in housing, schools, transport or in Scotland’s vast renewables potential, create a positive legacy for long-term growth. Faster growth, makes lowering the burden of debt so much easier.

“Put simply, you can’t cut your way out of a recession, but you can cut your way into a double‑dip recession. Yet despite this is precisely what the Chancellor proposes.

“We are already living with the experience of a 1.3% real cut to the Scottish Budget.

“And despite repeated requests, the Chancellor has failed to commit to no further reductions in 2010-11 post General Election.

“And despite the UK Government’s rhetoric about its ambitious efficiency programme, they have taken two years to achieve savings worth 3.1% of their budget – a target we achieved in just 12 months.

“A more radical plan is needed. Fundamental choices about what is vital and what is simply no longer affordable. Not the 50% cut in public sector net investment over the next three years but – cuts in those things that matter least – the £100,000 million replacement for Trident, the £5,000 million for the remnants of the ID card scheme – or indeed the near £10 million cost of the Scotland Office or the £100 million for the ‘Other Place’. We can cut these and instead protect local services.

“In these difficult times, for the economy and those delivering vital public services, we need - as a minimum - some degree of certainty of plans and purpose for this year.

“Without such clarity, we are left to speculate about his future intentions and what lies hidden within the detail of the Red Book. But one thing is certain, it is not as the Prime Minister has argued about investing in public services. The detail, scrutinised by the IFS, shows planned annual real terms reductions of over 3% in departmental budgets through to 2014/15. Cuts which will reverse almost all of the increase in public spending since the current Government came to power.

“Analysis suggests that in just 12 months time the Scottish Government budget could be cut by £1.5 billion under these projections.

“Little wonder the Chancellor has now admitted to planned cuts that are ‘deeper and tougher’ than those under Mrs Thatcher. In Scotland we remember all too well the deep and damaging impact on our communities of those Thatcher cuts and so today, to have a Labour Chancellor, a Labour Chancellor, promising cuts that are “deeper and tougher” beggars belief. And of course the Shadow Chancellor agrees – for Scotland Labour cuts and Tory cuts are now effectively one and the same thing. They will be savage, if I can borrow the description used by the Liberal Democrats for their own budget plans.

“Certainly, the Chancellor will need to face up to some tough public spending decisions.

“But in making those decisions, he must prioritise recovery, he must protect vital public services, such as health and education, and he must scrap vanity projects like the replacement for Trident.”

Concluding his remarks, the Banff & Buchan MP ended his last speech to the House of Commons by saying:

"I have enjoyed and relished this Chamber for all of my 23 years here. The rest of the Palace of Westminster I can take or leave, but this is a fantastic Chamber and a fantastic place for debate to be joined. It has a great atmosphere and at its best it is second only to the Scottish parliamentary Chamber, which looks better on telly. None the less, this is a fine place to have enjoyed debating. I have met and clashed with a number of formidable debaters and speakers from both sides of the House, and I have enjoyed every minute of doing that. I wish well the individual Members—if not necessarily their parties.

"However, I should say that what has happened over the past 23 years has strengthened my absolute conviction that the case for our having full determination over Scotland’s finances and resources has never been more urgent and has never required to be better made than it is now."

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