Why the Tory government must change course on the economy

by Liam Furby
Posted on
7 years ago
2 min read

Scotland’s economy has underlying strengths: employment is at a record high, unemployment is at record low levels, exports are going up faster than the UK and Scotland is the top destination for foreign direct investment in the UK, outside London.

 

But Westminster government policy means we face a challenging future. Tory austerity and the UK government’s disastrous handling of Brexit negotiations has weakened the UK economy and damaged living standards.

The Tories must take heed of the growing evidence of the damage done by their policies – and change course. Here’s why.

The cost of living is going up and Tory cuts are reducing incomes.

Since the EU referendum, the pound has weakened considerably. This has helped push up inflation to the highest level level since 2012. That means that prices are going up.

 

With high inflation, the Tories ongoing benefit freeze becomes a cut. According to the IFS, the four year freeze will now see the incomes of 10 million families cut by £450 a year in real terms.

 

And, with no commitment to following the Scottish Government’s lead and lifting the public sector pay cap, they’re cutting incomes too.

 

The UK’s investment balance sheet is £490 billion worse off than was expected.  

 

Uncertainty caused by the fall in the pound has led to the Office of National Statistics revising figures on the UK’s investment position: rather than an expected surplus of £469 billion, the UK has a net deficit of £22 billion.

 

UK economic growth has slowed and a ‘no deal’ Brexit would wipe £40 billion off the UK economy.

 

According to figures from the OECD, the UK’s growth rate has fallen to a lower rate than the EU or OECD average. The OECD has also estimated that leaving the EU could wipe £40 billion off UK GDP growth by the end of 2019.

 

The UK government’s budget watchdog is expected to say the Chancellor has less money than expected.

 

The Office for Budget Responsibility is expected to say that, as a result of Brexit, the UK economy will be less productive than they originally thought. That means that the Treasury will collect less in taxes than expected.

 

We have a better plan.