Sturgeon 'underwhelmed' by Johnson's £5bn spending vow

Nicola Sturgeon says she is “extremely underwhelmed” by a £5bn package of infrastructure spending announced by Boris Johnson.

The First Minister said she is expecting no new money for Scotland from the proposals and stated they are not “commensurate with the scale of the challenge we face” post-Covid.

The Prime Minister described the plans as “Rooseveltian” and comparable to the “New Deal” in the US following the 1930s Great Depression.

Speaking about the economy in Dudley, Johnson pledged £5bn to help the economy cope with the “aftershock” of the coronavirus crisis.

The PM also said “the union has shown its worth” during the pandemic, citing the UK Government’s furlough scheme as an example.

But on his latest spending plans, Sturgeon said: “I hope what the Prime Minister has announced today is the start of a conversation about fiscal stimulus and not the end of that conversation.

“I, to put it mildly, am extremely underwhelmed by what has been announced.”

She added her expectation was that there would be no additional Barnett consequentials coming to Holyrood.

Instead, there may be a “re-profiling” of what they were already expecting, she said.

Given that, Sturgeon said her conclusion was “this is not new money – this is simply shuffling around money that was in the system”.

“I don’t think that’s commensurate with the scale of the challenge we face,” she added.

“The Prime Minister has taken over the last few days to comparing himself, or allowing himself to be compared with FDR, Franklin D Roosevelt, and this has been described as a ‘New Deal’.

“The New Deal under FDR was worth I think around 40% of US GDP at the time.

“What Germany has announced right now in terms of its stimulus is worth 4% of German GDP.

“What the Prime Minister announced this morning – and it’s not even new money – would be less than half a per cent of UK GDP.”

Earlier in the week, the Scottish Government called for a UK-wide stimulus package of £80bn to kickstart an economic recovery.

It proposed reducing VAT to 15% for six months – and to 5% for all tourism and hospitality firms – as well as a jobs guarantee for all 18 to 25-year-olds

The Prime Minister’s speech laid out £5bn of investment in infrastructure projects mostly restricted to England.

But he pledged to dual the A1 all the way up to Scotland – which runs from London to Edinburgh – a promise made by successive UK governments which he said would finally be fulfilled.

Johnson said “a prosperous and United Kingdom must also be connected” as he announced a study of road, air and sea links across the UK.

It followed UK Government discussions pre-pandemic on the viability of a bridge or tunnel between Scotland and Northern Ireland – an idea the PM has expressed enthusiasm for.

Speaking on Tuesday, Johnson also highlighted the Treasury’s job retention scheme, which has kept more than 800,000 Scottish jobs on furlough since lockdown.

He said: “It was the might of the United Kingdom Treasury that set up that furlough scheme in all corners of the country… massive and immediate extra funding to all four parts of the UK.

“So I think the Union was more than shown its worth.”

The Prime Minister added: “Now is the moment to strengthen that incredible partnership between England, Scotland, Wales and Northern Ireland.”

A UK Government spokeswoman said emergency increases in spending had already provided, through the Barnett Formula, £5.4bn extra for the Scottish Government in capital funding for devolved areas this financial year.

She said: “We would encourage them to accelerate infrastructure projects in the same way that the UK Government is doing.”

Labour leader Sir Keir Starmer said: “The Prime Minister promised a New Deal, but there is not much that’s new, and it’s not much of a deal.

“We are facing an economic crisis – the biggest we have seen in a generation – and the recovery needs to match that.

“What’s been announced amounts to less than £100 per person, and it’s the re-announcement of many manifesto pledges and commitments.”