RISHI Sunak’s spending plan will harm the UK economy, and Scottish Government calls for a Germany-style £98 billion boost don’t go far enough, Sustainable Growth Commission chair Andrew Wilson has said.

Finance Secretary Kate Forbes petitioned Chancellor Rishi Sunak for a major investment package ahead of Wednesday’s UK spending review.

If granted, the package would have been worth around 5% of gross domestic product.

Writing in The National today, economist Wilson, who worked with Forbes on the Sustainable Growth Commission, says a German-style plan would not be enough to offset the impact of the pandemic – because the UK is “much worse” off than its European counterpart.

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And he says the blueprint Sunak has laid out, including a freeze on most public sector pay, will damage the economy.

He states: “While I support the Scottish Government’s call for that intervention to match Germany, I don’t think that goes far enough.

“This is because Germany is way ahead of the UK in economic performance and equality. Their government expects the hit from Covid to be less than half that which the UK will take and they were already more than 20% richer than the UK. We need much more because the risks and reality of the UK’s situation are much worse.”

He went on: “Rather than boosting the economy, the announcements in the spending review will harm it. The hit on public sector pay is, again, precisely the opposite of what demand stimulation should look like in a time of what we hope will be recovery.

“Amidst the eye-watering numbers, the net impact of the review announcement is to reduce fiscal demand stimulus by nearly £71bn in specific measures for the next five years announced.”

On forecasts that leaving the EU without a deal will result in a £40bn hit, Wilson said: “The stakes could not be higher. The self-harm could not be more ill-timed.”