Urgent investment is required now in infrastructure projects to stimulate growth, First Minister Alex Salmond has said to the Prime Minister.

Following this week’s GDP figures confirming that the UK had now officially re-entered recession with a significant fall in construction activity, the First Minister has written again to David Cameron, urging him to act immediately to assist the recovery by targeting investment in 'shovel ready' projects across Scotland.

After the Prime Minister accepted the principle of accelerated capital spending at their meeting in February, the First Minister wrote to the UK Government outlining a list of 36 infrastructure projects in Scotland worth £300m that could begin immediately if funding was in place.

The First Minister has now warned that the news the United Kingdom has entered a double-dip recession means urgent action is required to fund these projects and help turn the economy around.

The First Minister said: "This week’s news of a UK double-dip recession makes it abundantly clear that the UK Government must change course and inject capital spending to steer the economy back to recovery.


"The austerity approach has plainly failed, with negative UK growth in four out of the last six quarters proving that the economic position now is no better than it was when the UK Government took office.

The Scottish economy outperformed the UK in the last two quarters of 2011, and the Scottish Government are doing everything in our current powers to stave off a double-dip recession here.

The UK construction sector in particular is struggling, and according to the Office for National Statistics its poor performance was the behind the overall contraction in the UK economy.

"Urgent action is required to ensure that the economy is brought back to recovery with a targeted stimulus of capital spending on construction projects – an approach the Scottish Government has advocated for many months. In March – at his request – I wrote to the Prime Minister outlining infrastructure projects worth £300m from the north to the south of Scotland that are ‘shovel ready’ to stimulate the Scottish economy and help keep Scotland out of recession.

"Despite claiming that he agreed in principle with this targeted approach, the Prime Minister has ignored our requests to boost Scotland’s capital budget to fund these projects and help drive economic recovery."

He continued: "The Scottish economy is showing some positive signs, with a drop in unemployment and a recent CBI Scotland Industrial Trends report demonstrating that business optimism in Scotland is at an 18 month high. Employment in Scotland is higher than the UK as a whole, and unemployment is lower.

"But much more can be done, and it is now time for the UK Government to alter its direction. Investment in our ‘shovel ready’ projects is now needed more than ever."

(GK)