Sturgeon calls for fresh intervention after UK economy shrank 20% in April
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 shrank 20.4 per cent in April.
The First Minister argued that the UK must follow other countries such as 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 £62 million 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 Covid-19 recovery.
However, 30 minutes before she began her daily address, Cabinet Office minister Michael Gove stated on social media: “I formally confirmed the UK will not extend the transition period and the moment for extension has now passed.”
Regarding coronavirus health statistics she revealed there were 27 new cases in the last 24 hours and three more people died. The death toll for those with confirmed Covid-19 now stands at 2442.
Ms Sturgeon 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 having 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 playing our full part in making that happen.
“The GDP is something we discussed at this morning's weekly meeting of the Scottish cabinet economic subcommittee, 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.
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“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.
“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 for the next five years that fund will support key energy projects which will help Scotland move to net zero."
Claire Mack, chief executive of Scottish Renewables, said later: "Today’s announcement of a £62 million fund to help the energy sector accelerate its transition to net-zero emissions is welcome, particularly in its reiteration of the importance of pursuing a ‘green, low-carbon recovery’ from the coronavirus pandemic.
"It is vital that recovery does not ‘lock-in’ fossil fuel extraction, as we have seen in the aftermath of previous economic shocks. Doing so would endanger progress towards our climate targets and miss out on the opportunity to use renewable energy technologies to increase wellbeing and deliver increased socio-economic opportunity across Scotland.
"We are particularly interested to hear more details of how an Energy Transition Zone could focus on low-carbon manufacturing, and would see this as a way of using Scotland’s engineering skills to lower the cost of key technologies like floating wind, wave and tidal power and create opportunities for Scottish supply chain companies."