The SNP has renewed calls for the Tory government to deliver a meaningful fiscal stimulus package – after new analysis from the Institute for Fiscal Studies (IFS) confirmed up to £10billion of the measures in the summer statement will be funded through reallocations of previously announced spending.
The analysis published by IFS concludes the so-called ‘New Deal’ of £5.5billion additional capital spending actually “represents an increase of precisely zero this year on Budget plans” – reallocating money previously confirmed for other projects.
The analysis confirms the Scottish Government will receive just £21million in Barnett consequentials from the money announced to support the economy – “because (the) total spending envelope so little changed by last week’s announcement”.
The IFS outlines examples including:
- The £2billion Green Homes Grant scheme for England is actually being funded from within pre-existing spending limits – resulting in no new money for Scotland.
- Almost half of the £400 million announced for traineeships, apprenticeships, school leavers and careers advice in England is being reallocated from existing budgets.
- The £5.5billion infrastructure package actually represents an acceleration of previously planned investment and is funded by underspends – not new money.
Separately, the Office for Budget Responsibility (OBR) has estimated that despite claims that the UK government’s so-called ‘Plan for Jobs’ will deliver £30billion in investment, the actual investment is likely to be around a third lower at just £20billion, including the recycled money.
George Adam, Paisley’s MSP, said:
“Quite frankly this is unacceptable – but if I’m being honest, not surprising from a UK Government who have missed the mark on numerous occasions since the beginning of their time in office, never mind the beginning of the COVID-19 pandemic.
“Not only is the Chancellor’s package of support incredibly disappointing, but now it emerges that it is incredibly misleading too and absolutely falls apart under scrutiny from the IFS and OBR.
“Thousands of people are losing their jobs across the country and businesses are understandably struggling after months of closure so it is vital that the Tories stop being disingenuous and look to the example set by other countries and actually deliver the investment needed to boost the economy.
“Paisley deserves better than this and if there is one thing people hate more than anything, it’s being lied to – especially during such uncertain and difficult times. What the UK Government are doing is offensive and they must be held accountable here.”