Nicola Sturgeon warned: Scotland faces ‘long haul’ economic recovery – plan laid bare

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The Advisory Group on Economic Recovery published its latest report on Monday which lays bare the hard work the Scottish First Minister must do to help get the Scottish economy moving. The report, commissioned by the Scottish government makes 25 recommendations.

Announcing the report, Nicola Sturgeon’s chief economic adviser Benny Higgins warns that Scotland faces an “economic challenge of monumental scale”.

The chairman of the advisory group, added: “If we do not intervene radically to transform our economy, inequalities will drastically widen with long-term scarring for communities across the country, and for our young people in particular.

“This cannot be allowed to happen.”

Among these recommendations include a programme for those aged between 16 and 25, guaranteeing two years of work paid at the real living wage.

 

It said the COVID-19 pandemic “will be a scar across (young people’s) working lives if there is no urgent, ambitious and focused intervention to address it”.

The report added: “It should be delivered locally, with brokerage of opportunities between employers and jobseekers: but it should be set within a coherent national framework.

“There should be targeted funding support from the Scottish Government to set up the scheme, and to assist small and medium-sized businesses, as well as larger firms, to participate.”

The report also recommends that talks are held on ensuring there are public stakes in private Scottish business.

READ MORE: Sturgeon confirms no new COVID death for second day across Scotland

It also calls for a full review of the three months of education which Children have lost during lockdown as well additional protections for cash-strapped colleges and universities.

The report also calls on Nicola Sturgeon’s government to prioritise a green recovery, strengthening the relationship between business and government and investing in digital infrastructure.

The report is also calling for the Scottish government to grant a VAT reduction to help the tourism sector which has been one of the worst industries hit by COVID-19.

Mr Higgins’ group also pushed for a faster revision of the fiscal framework between the Scottish and UK Governments – the agreement which sets out the funding arrangement north of the border – to allow for more autonomy in Scotland.

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The report said: “It would benefit both the UK and devolved governments to design a model for investment in the economic recovery period, which enabled an appropriate flexibility to allow different priorities to be pursued.

“There is also a strong case for the Scottish Government to have greater autonomy to use targeted fiscal measures to stimulate demand or incentivise behavioural change in the recovery period.”

Mr Higgins continued: “To create a robust, resilient well-being economy, the public and private sector must now build a new partnership to prioritise and deliver bold action.

“And they must do so with purpose and urgency.”

The Advisory Group on Economic Recovery also warned that lockdown has spawned more inequality because low earning, essential workers “have put their health and that of their families at risk” whilst higher salary workers are able to work from home.

Mr Higgins has urged the Scottish Government to develop a recovery plan based on their report, by the end of July.

He also warned that at least £6billion in stimulus money will be needed for the Scottish economy to recover from COVID-19.

This funding will need to be equal to at least four percent of financial output to be effective, the economist said.

He added: “If Germany needs four percent of its economic output to stimulate the economy, then you’d think that we’d need at least that.

“That’s £6 billion and the current limit through the fiscal framework is £450 million so there’s a long way to go from where we are to where we need to be.”

Speaking during her daily briefing today, First Minister Nicola Sturgeon said she would respond to the group by the end of July.

She said: “The Scottish Government sees this report as a serious and substantive piece of work and we agree with its basic principles.

“Many of its themes – for example the importance of education, employment and tackling inequalities – are clearly going to be critical to our economic recovery.”

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