Fire all guns to help ailing UK economy, says Salmond
First minister praises rescue package but says more is needed
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The first minister welcomed yesterday’s decision by the Bank of England to slash interest rates by 0.5% — but warned that further cuts were needed.
The move came three hours after Alex Salmond’s latest call for a “substantial” reduction.
Addressing a meeting of Scotland’s National Economic Forum, he also called for greater protection for UK deposits.
After the cut was announced, Mr Salmond described the move as “very welcome”. But he went on: “Sterling rates remain substantially above those of the ECB and the US Fed, and therefore we would urge further action. However, it is certainly an important step in the right direction to boost confidence and demand in the real economy.”
In his speech to the economic forum in Edinburgh, he praised Chancellor Alistair Darling’s £50billion rescue as “a substantial package of stabilisation”. But he added: “I would add to it – I still think certain things are necessary. It is important to fire all of your guns.”
Calling for a “substantial” cut in interest rates, he said people would ask what the package did to help them individually, rather than helping the financial sector.
“It is really important, as part of the armoury of measures taken, that things that impact directly on people and families are part of that.”
Before entering politics, Mr Salmond worked as an economist with the Royal Bank of Scotland. He also warned his audience that in tighter times for the public finances, the Scottish Government would have to examine all its actions in a bid to ensure it helped expand the economy.
Meanwhile Scottish Secretary Jim Murphy last night urged Mr Salmond to put party differences aside to help Scots weather the economic storm.
Mr Murphy, MP for East Renfrewshire, asked the first minister to join an emergency meeting with CBI Scotland and Scottish TUC leaders to consider what can be done.
He said: “People in Scotland, as in the rest of the country, rightly look to government to help them in these difficult times. And I think that they have a right to expect all of us in public office to co-operate and work together in their best interests.”
A statement issued by Mr Salmond’s spokesman said he had already convened a meeting of his own National Economic Forum, including the Scottish CBI and STUC.
But talks with Mr Murphy had been “positive and constructive” and a reply would be sent “shortly” to arrange a meeting.
Meanwhile, the Scottish business sector breathed a sigh of relief at yesterday’s moves to bring stability to the economy.
Institute of Directors Scotland executive director David Watt said the rate cut would give much-needed help to the financial services sector, but “additional and dramatic action” – such as a further 0.5% cut – was still required.
Jonathan Fair, chief executive of Homes for Scotland, said: “With home building a key economic driver in Scotland, the hope is that banks will quickly pass on the fall in interest rates to home buyers and rapidly reinstate mortgage lending levels.”
David Strang Steel, a Banchory-based partner at property consultancy Strutt & Parker, said: “The Bank of England is sending a strong message to the consumer and a show of commitment towards assisting the battered property market.”
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