Welsh government joins growth plea to George Osborne

George Osborne leaving No 11 Devolved administrations want the chancellor to increase capital spending

The Welsh government has joined other devolved administrations to call for spending to stimulate the economy.

The plea came as Chancellor George Osborne prepared to deliver his autumn statement on Wednesday.

It will include £5bn of capital investment aimed at kick starting growth.

The money will come from a squeeze on day-to-day spending for Whitehall departments but will mean a small windfall for the Welsh government.

First Minister Carwyn Jones joined counterparts from Scotland and Northern Ireland to warn about potential damage to the economy from spending cuts.

They demanded a halt to cuts to capital budgets which pay for spending on infrastructure projects.

Start Quote

We urgently need more funding for public sector capital projects as they are a clear way of boosting our economy”

End Quote Carwyn Jones AM First Minister

Unlocking extra funding would allow them to stimulate the economy in the devolved nations, they said.

They welcomed a recent improvement in the UK's output which ended the double dip recession. But they said the improvement was due to a temporary uplift over the summer.

In a statement they said initiatives to encourage private sector investment are unlikely to have an impact for some considerable time.

'Boost'

Mr Jones said: "The time has come for the UK government to face the fact that our economy is bumping along with very little or no growth.

"This is impacting on jobs and combined with the cuts to our budgets, hitting our communities hard.

"We urgently need more funding for public sector capital projects as they are a clear way of boosting our economy."

It comes a day after Welsh assembly members approved the Welsh government's £15bn budget for the next financial year.

Capital funding has been cut by the UK government's austerity drive, so Welsh ministers say they are looking for other ways to fund spending on infrastructure.

They announced a new public-private partnership to complete the dualling of the A465 Heads of the Valleys road.

Mr Osborne will use his autumn statement to announce how £5bn will be spent elsewhere.

Many Whitehall budgets will face an extra 1% cut next year, with 2% the following year.

At the weekend the chancellor admitted cutting the financial deficit was "taking longer" than planned, but the coalition UK government was "making progress" and that to "turn back now would be a complete disaster".

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