New CBI Scotland Director Hugh Aitken’s calls for austerity to be a priority for the new SNP MPs have been criticised by Business for Scotland.
In his statement on the SNP election performance, Mr Aitken said: “Getting the deficit down must be a priority, to maintain the UK’s credibility in international markets which will keep the cost of borrowing down for growing Scottish businesses.”
The CBI is therefore effectively calling for austerity to be a priority. Austerity was rejected en masse by the Scottish electorate by returning 56 out of 59 MPs on platform of investing in growth and job creation rather than more cuts. Business for Scotland believes the SNP should make Full Fiscal Responsibility and more powers a priority.
Credibility in international markets will be driven by growth, job creation, increased exports and the resultant reduction in the demand for welfare, which will reduce the deficit on a % of GDP basis and allow for longer term more sustainable and less socially harmful fiscal management.
Austerity has been criticised recently by leading economists such as Professor Steve Keen and Nobel prize winner Paul Krugman. The CBI’s call for austerity measures to be implemented in Scotland would slow down Scotland’s economic growth, damage credibility in international markets and could increase the cost of borrowing for business across the UK and reduce cashflow.
Gordon MacIntyre-Kemp CEO of Business for Scotland said: “One thing is clear, with each of the three parties that support austerity reduced to only one MP each, Westminster has no mandate to implement austerity upon Scotland. Scotland needs to powers to invest in economic growth and job creation.
“The CBI’s support for austerity would be counterproductive and is out of step with the business and political mood in Scotland.”
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