First Minister Nicola Sturgeon calls for fresh intervention after the UK economy shrunk 20 per cent in April
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First Minister Nicola Sturgeon has called on the UK government to deliver an economic rescue package for the country following the official figures showing the British economy shrunk 20.4 per cent in April.
She argued that the UK must follow other countries like France to prepare for what could potentially become a very deep economic crisis triggered by the Covid-19 pandemic and subsequent lockdown.
In more positive news, she announced a new £62m Energy Transition Fund from the government to help the country's energy sector which is facing a massive global decline in demand.
Ms Sturgeon also confirmed that together with the First Minister of Wales Mark Drakeford, she wrote to Prime Minister Boris Johnson urging him to engage in an extended Brexit transition period.
The aim is to remove the risk of a no-deal outcome and also to make sure that politicians can remain focused on supporting business through the post-Covid-19 recovery.
However, 30 minutes before she began her daily address Michael Gove stated on social media: “I formally confirmed the UK will not extend the transition period & the moment for extension has now passed”.
Regarding Covid-19 health statistic, she revealed there were 27 new cases in the last 24 hours, 914 patients in hospital which was up five, and three more people died of the virus – the death toll for those with confirmed Covid-19 now stands at 2442.
She said: “Today's GDP figures show that in April the UK economy contracted by more than 20 per cent – that is by some distance the largest decline on record and it confirms the scale of the economic crisis that has inevitably been caused by the health crisis that we face.
“I have previously welcomed the UK government interventions especially the furlough scheme which has helped to preserve jobs during this period but in my view it is time to signal a further extension of Treasury support.
“Other countries have already made this move including France where plans are being put in place for a long-term partial-activity scheme covering possibly as long as the next two years.
“The alternative to extending support being put in is either businesses being forced to reopen before it is safe to do so and that, of course, could damage health and it could cost lives – or businesses have to take an even bigger hit and that will cost jobs.
“In my view neither of those alternatives is acceptable so I hope we will see further action from the UK government and we look forward to working constructively with them in playing our full part in making that happen.
“The GDP is obviously something we discussed at this morning's weekly meeting of the Scottish Cabinet economic sub-committee, we also looked ahead to the publication of the latest statistics on the Scottish labour market next Tuesday.
“I don't want to and I'm not able to pre-empt that but we do expect to see a significant impact on employment and a significant rise in unemployment and sadly despite our best efforts that situation is likely to remain challenging in the period ahead.
“And, of course, all of that is before we factor in any potential impact on the economy from Brexit and that's why I have joined with the First Minister of Wales in writing to the UK government calling for an extended Brexit transition period to take away the risk of a no-deal outcome and also to make sure that all of us remain focused on Supporting business through the post-Covid recovery.
“So that is the action I believe we need from the UK but I am acutely aware of the responsibility I have and the Scottish Government has to make sure we are doing everything within our power and resources.
“Scotland’s energy sector is facing a massive decline in global demand and that is having a very serious impact on the economy. The Scottish Government wants to do everything we can to support the energy sector through this crisis.
“We want to protect jobs and businesses in the north east of Scotland and across the country and in doing that we want to make sure that the sector is able to continue to lead and benefit from Scotland's necessary transition to a net zero economy.
“I'm announcing a new £62 million energy transition fund – over the next five years that fund will support key energy projects which will help Scotland move to net zero.
“For example, one project, the global underwater hub brings together engineering, expertise from academia and industry and it will help our oil and gas sector use its existing subsea and underwater expertise in areas such as marine renewables.
“Another project receiving support will be the energy transition zone, a new business park adjacent to the Aberdeen South Harbour that will provide state-of-the-art facilities for the manufacture and development of renewable and low-carbon technologies.
“Almost inevitably given the focus of the fund from oil and gas to renewables, the projects which directly benefit from this fund are currently in the north east of Scotland.
"But by securing Scotland’s place as a world leader in key technologies for the future, they will help businesses across the country to diversify to attract new investment, seize new opportunities and both protect and create jobs.”
