Austerity has failed, says Sturgeon


Published: Wednesday 11th February 2015 by The News Editor

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A Labour government would have to abandon “failed” austerity policies to win the support of SNP MPs after the election, Nicola Sturgeon has indicated.

Scotland’s First Minister said her party, which could hold the balance of power after May’s general election, would require Ed Miliband to adopt a “more moderate” approach to deficit reduction if he wanted the backing of SNP MPs in Westminster.

She suggested an alternative approach for the next parliament which would see £180 billion extra spent on public services by 2020.

Labour has committed to getting the current budget into surplus and national debt falling as soon as possible within the next parliament.

But Ms Sturgeon said she wanted to break the “cosy consensus” in favour of austerity at Westminster and her MPs would work with “progressive” allies on that agenda.

Opinion polls have suggested that the SNP will make major gains in Scotland in May, potentially putting her in the position of kingmaker if the general election results in a hung parliament.

She told BBC Radio 4’s Today programme: “I would certainly hope if there was a Labour government and it was dependent on SNP support – which is the most popular preferred outcome of people in Scotland – then I would hope we could persuade and influence a Labour government to take a more moderate approach to deficit reduction.

“I am not going to support governments that plough ahead with austerity that damaged the poorest in society.”

She added: “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.”

Ms Sturgeon insisted she was focused on the SNP gaining as many seats as possible in Westminster rather than any possible post-election negotiations.

She said she did not know the Labour leader well and had met him only “a couple of times” but was “happy to chat with anybody”.

Ahead of a speech in central London setting out her approach to the public finances, Ms Sturgeon said: “I’m going to make that argument that austerity has failed, it has failed in human terms – it is hitting the poorest 10% in society harder than any other group – and it has failed on the terms that the coalition Government has set for it.

“George Osborne said in 2010 that next year he would have a £6 billion surplus on his current spending. In actual fact, he is going to have a £49 billion deficit.

“So austerity has failed and it’s time for a different approach.

“I think it is important we reduce the deficit and the debt. What I will set out is a different way of doing that.”

She said by allowing “modest, responsible increases in public spending” of around 0.5% in real terms, “debt and deficit would still be falling as a percentage of GDP over these years but we would free up something in the region of £180 billion over the UK to invest in infrastructure, in innovation, in growing the economy”.

She added: “I’m not denying that it is important to get the deficit under control and to start reducing the debt. What I’m arguing is that to look at deficit in isolation is far too narrow, because although that’s important, it’s also important to have stronger, sustainable, more solidly-based economic growth, it’s important to tackle inequality, it’s important to protect public services.

“If you invest some of that money in infrastructure, in innovation, in improving productivity and you grow the economy faster as a result, you shrink the debt over the long term faster than you would otherwise.”

The SNP leader fears budget cuts after May’s general election could be tougher than those already imposed by the current UK Government.

In her speech she will say that this would be “morally unjustifiable and economically unsustainable”.

The Scottish Government will “make the case for a more rational economic policy at Westminster”, Ms Sturgeon will pledge, as well as adopting a different approach north of the border.

The First Minister will argue: ” The UK Government’s economic policy has failed: categorically and comprehensively. And not by my reckoning, but on the UK Government’s own terms.

“Perhaps most damagingly of all for the UK Government’s credibility, it has failed to meet its own deficit reduction targets.

“But what the UK Government is now telling us is this: austerity hasn’t worked, so we need even more of it.”

The UK Office for Budget Responsibility (OBR) has predicted that by 2020 UK households will be ” more heavily indebted than they were just before the financial crisis”, Ms Sturgeon will say.

“Individuals will be deeper in debt, families will feel less secure, the economy will be less resilient.

“It is morally unjustifiable and economically unsustainable.”

A Liberal Democrat spokeswoman for Scottish Secretary Alistair Carmichael hit out at Ms Sturgeon, saying: ” All the bombast in the world will not change the reality that the UK Government’s economic strategy is working.

“Whether Nicola Sturgeon likes it or not, this Government has cut borrowing by £52 billion from the level we inherited.

“That’s why the markets have regained confidence, the cost of borrowing and mortgages is at a record low, and we are vying with the United States for the strongest economic growth in the G7.

“We have achieved this despite the continued economic trouble affecting our immediate partners, especially our largest trading partner – the eurozone.

“If the First Minister has something serious to say on this subject matter, now is the time to say it.

“By how much would she raise taxes, and by how much would she cut spending in the next parliament?

“Or does she want to go back to the days of high borrowing, high mortgage costs, and an ever-bigger debt problem for the next generation to pay off?”

Shadow Scottish secretary Margaret Curran said: ” Scotland can’t afford another five years of David Cameron, but Nicola Sturgeon wants to help the Tories get back into power. Every vote for the SNP in May is another boost for David Cameron, and makes it more likely that he will be prime minister for another five years.

“Labour has a fair plan to balance the books but the SNP have stood against Labour’s progressive policies, such as the 50p tax for top earners.”

Published: Wednesday 11th February 2015 by The News Editor

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