Successive Westminster Governments have left us ‘Poorer Together’ says leading economist

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  By Chris Rumbles
 
A leading economist and former Standard Life adviser has described the UK as ‘poorer together’ because of successive Westminster Government failures.
 
Professor David Simpson’s written submission to the Scottish Parliament’s Finance Committee outlines the economist’s forecast for Scotland as part of the committee’s analysis of Scotland’s post-2014 public finances.

In the submission, published ahead of tomorrow’s committee session, Prof Simpson strongly criticises both the incumbent Coalition government’s programme of austerity as well as the economic policies of the Labour government before it.

Disputing the claim that the UK’s economic turmoil was an ‘external shock’ Prof Simpson wrote: “It was made by governments themselves, by their central bankers, Treasury officials and regulators in London and Washington, as well as by bankers on Wall Street and in the City. 

“Bank of England officials, Treasury civil servants and their political masters all share responsibility for having led the British economy into the financial crisis of 2007/8 and then allowing it to languish in recession for four more years.”

According to Prof Simpson, despite the UK Labour government “underwriting” the “reckless behaviour” of banks that precipitated the financial crisis, it has been the Coalition government that, he writes, “is going to double the national debt in cash terms in just one parliament”.

He adds: “No politician or civil servant in the Treasury or the Bank of England has accepted responsibility for these mistakes. Instead, it is ordinary people who have been punished.”

Arguing that, as part of the UK in the last five years, average living standards in Scotland have fallen year on year, Prof Simpson states: “We have become poorer together.”

The Coalition government commissioned report from the Social Mobility and Child Poverty Commission, released in October 2013, labelled  the Coalition’s austerity measures ‘regressive’ and highlighted  how the lowest-earning 20 per cent of households contribute more to UK public spending than all but the top 20 per cent.

The SMCPC report did however outline Scotland’s success in tackling child poverty with it having the lowest levels of any country in the UK.

Ahead of Professor Simpson’s appearance in front of the Finance Committee, SNP MSP Jamie Hepburn said: “These damning comments from Professor Simpson lay the blame for the recent financial crisis squarely at the door of the Westminster establishment.

“Professor Simpson is absolutely right to say we have become poorer together – the UK is the fourth most unequal country in the developed world and the gap between rich and poor has only grown wider in recent years. In contrast Scotland would be the 14th wealthiest nation in the OECD, ahead of France, Japan and the UK.

“The wrong-headed austerity agenda of the Tory/Lib Dem government has overseen billions of pounds of cuts which have hit the poorest hardest – and with Osborne already signed up to a further £25bn of public spending cuts, the only certainty of a No vote is more austerity.”