UK Economic Outlook Gloom


ECONOMY…by Alex Porter

Optimism about the UK economy is overwhelmingly negative according to a new survey for the news agency Reuters. (1)

The telephone survey conducted by Ipsos-Mori shows that 79 per cent of Britons believe the economy will stay the same or get worse over the next 12 months. Only 28 per cent of respondents believe that there will be an improvement in the economic climate but almost half of the total, 48 per cent, take a very negative view believing that Britain’s crisis will deepen.

This dire lack of public confidence in Britain’s economy is set against the backdrop of calls by economists, such as Andrew Hughes Hallet, and others for full economic powers to be repatriated to Scotland. With the coalition government in London’s strategy of using cuts to deal with unprecedented public sector spending deficits, many in Scotland will feel that there is no need to take the pain of austerity.

As Scotland’s accounts (GERS) show a healthy surplus, economic independence would offer Scottish businesses and institutions stability and growth instead of the volatility and uncertainty that Westminster’s austerity programme threatens.

Public sector workers are the most worried by the parlous state of Britain’s finances. (2) 61 per cent are either fairly or very concerned about the threat of redundancy compared to 41 per cent of their private sector counterparts.

As the Holyrood elections draw closer the issues of jobs and the economy will naturally begin to dominate the campaign. With many polls showing that a clear majority of the electorate blame the last Labour government for Britain’s solvency problems, Iain Gray will try to have the campaign focus shifted onto Tory cuts. The SNP will seek to keep the pressure on Labour by having them defend their economic record and prove why Scots should trust them to turn around a crisis that the electorate believes Labour themselves caused.

As Britain heads into a simultaneous sovereign debt, financial and currency crisis the issue of economic independence in Scotland will climb up the political agenda. Scots will have to decide if they want to take the prescribed medicine for an illness they don’t have or take control of the economic levers that are currently reserved to Westminster and decline the offer.