Thursday, December 16, 2010

UK Economic Umbrella In Crisis

A piece I did for Newsnet Scotland:

by Alex Porter

Public confidence in the UK economy remains at rock-bottom according to YouGov economic trackers. (1)

Asked about the state of the British economy only 5 percent of UK citizens surveyed responded that they believed it is 'good', 22 percent that it is 'neither good nor bad', 69 percent that it is 'bad' with 4 percent in the 'don't know' category.

The British population continue to be distressed about their personal welfare over the next two to three years with 67 percent of the population feeling 'worried' that they will not have enough money to live comfortably, 63 percent that they will either lose their jobs or have difficulty finding one whilst 43 percent fear losing their home.

Such deep pessimism caused by UK government debt, financial and currency crises is seeing Scots becoming increasingly skeptical of the unionist argument that Scotland is protected from global market volatility by the UK economic umbrella.

In terms of apportioning blame the YouGov trackers show that people across the UK, 41 percent, believe the last UK Labour government is responsible for impending austerity cuts, 23 percent the coalition while 24 percent find both current and former governments equally culpable.

With such a huge question mark hanging over the issue of the economic competence of Westminster governments the SNP's policy of economic independence has gathered momentum in Scotland ahead of the forthcoming Holyrood elections.

A recent survey shows that a large majority, 62 percent, of Scots want the Scottish Parliament to assume substantial new powers. This year's Scottish Social Attitudes Survey also reveals that 57 per cent of Scots want Holyrood to have control over taxation and 62 percent control over welfare benefits. Another survey conducted by TNS on St Andrews day shows that only a minority of Scots, 44 percent, now support the union.

Recent calls for economic independence by Scotland's prestigious Council of Economic Advisors (CEA) and Scottish business leaders were dismissed by the Scottish Secretary Michael Moore.


More people across the UK, 43 percent, now believe that the UK government's policy of austerity cuts will further damage the British economy while 40 percent believe the opposite according to the YouGov economic tracker.

The findings raise the question of why Scotland, which has a surplus in its national accounts (GERS), must suffer cuts to its government's block grant from Westminster. These cuts must be factored in to financial planning by Scottish businesses and institutions such as the university sector hitting employment, training and higher education courses.

With the UK government targeting deep reductions in public sector jobs and benefit payments there is a growing concern that a depleted workforce will mean more mortgage defaults whilst less expendible income will reduce the government's VAT receipts and have a negative effect on retail employment.

The worry for the UK's ConDem government is that if austerity fails, like stimulus did before it, the public will demand an end to expensive foreign wars and nuclear weapons systems as the best option to reduce Britain's unprecedented budget deficits.



cynicalHighlander said...

The Watson Institute at Brown University presents Mark Blyth on Austerity

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