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Nicola Sturgeon calls for fresh intervention after figures reveal UK economy shrank by 20 per cent in April

By Scott Maclennan

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First Minister Nicola Sturgeon.
First Minister Nicola Sturgeon.

First Minister Nicola Sturgeon has called on the UK government to deliver an economic rescue package for the country following news that the economy shrunk by more than fifth in April.

At today's Scottsh Government coronavirus briefing she said the UK must follow other countries like France to prepare for what could become a deep economic crisis triggered by the Covid-19 pandemic and subsequent lockdown.

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 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, 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."

On that front at today's briefing the First Minister also announced the creation of a new £62 million Energy Transition Fund to help the energy sector, which is facing a global decline in demand.

“The Scottish Government wants to do everything we can to support the energy sector through this crisis," she said.

“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."

She said that, over the next five years, the fund will support "key energy projects".

“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," she said.

“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.”

In the past 24 hours a further 27 cases of Covid-19 have been confirmed in Scotland with 914 patients in hospital – up five from the previous day.

A further three deaths have also been recorded, taking the total number of Scottish deaths from the virus to 2442.

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