HOSIE WARNS OVER RETURN TO RECESSION WITHOUT STIMULUS

HOSIE WARNS OVER RETURN TO RECESSION WITHOUT STIMULUS

Commenting on news the UK economy has come out of recession, after figures showed it had grown by a weaker-than-expected 0.1% in the last three months of 2009, SNP Treasury spokesperson Stewart Hosie MP warned that growth was still largely driven by government stimulus measures and the UK risked a return to recession if stimulus measures are withdrawn too soon.

Mr Hosie’s concerns echo the head of the IMF, Dominique Strauss-Kahn, who warned of a possible double dip recession, particularly if countries exit from stimulus packages too early. He is quoted as saying “for as long as you do not have private demand strong enough to offset the need of public policy, you shouldn't exit”

Mr Hosie said:

“The weakness of these growth figures underline the continued fragility of the recovery, and entirely reinforce the need for further accelerated capital spending in order to protect jobs.

“The Chancellor must heed the IMF warning about the risk of returning to recession if stimulus measures are withheld. Downing Street must confirm that it is prepared to do what is necessary to safeguard jobs and promote economic recovery.

“The Scottish Government’s acceleration of £350 million of capital spending into vital areas such as affordable housing and other infrastructure projects has helped us fight recession, boost spending, and assist the construction sector during tough times. Clearly, these resources have been spent, which is why we need a further acceleration of capital spending into 2010/11, so that we can maintain this enhanced level of spending for infrastructure and investment next year, and support thousands more jobs. Already, the Scottish Government’s recovery plan is supporting 15,000 jobs – despite Scotland’s budget being cut for the first time since devolution by the UK Labour government.”