On the morning of September 23, former Governor of the Bank of England Mark Carney told the Financial Times that in 2016 the UK economy was 90 per cent the size of Germany’s. It’s now less than 70 per cent.
That very afternoon, the Tories trashed the economy with a budget that caused chaos and led to Liz Truss resigning after only a few weeks as Prime Minister.
Households and businesses across Scotland are paying the price for the UK Tory Government’s economic mismanagement.
Measures set out in the Chancellor’s statement last week will do little to help people through the cost of living crisis. He should have made fairer choices by more effectively taxing the income of non-domiciled residents and imposing a windfall tax on business making excessive profits from the energy crisis. Instead, hitting family incomes with creeping tax rises and devastating cuts in public spending.
The seventh Chancellor in four years, and fourth since June, Jeremy Hunt (right) is trying desperately to paper over the disastrous mistakes of his predecessor.
The origins of the current crisis don’t all lie at the feet of Liz Truss, Kwasi Kwartang and their disastrous ‘mini budget’. A damaging Brexit and over a decade of failing to fund public services has left the UK considerably less able to deal with the economic shocks of the pandemic and war in Ukraine than every other developed economy.
The independent Office for Budget Responsibility forecasts that the UK, now in recession, will face Europe’s sharpest economic decline next year.
Living standards are expected to fall by 7 per cent over the next two years, the steepest decline since records began and won’t reach pre-pandemic levels for at least another five years - a devastating indictment of UK Tory Government incompetence.
The energy price cap rises again next April to £3,000 a year. It was £1,042 until April 2021. This increase will be unaffordable for many households, with no certainty as to how businesses struggling to stay afloat will be supported after the Energy Bill Relief Scheme ends in March.
Cynically, the Chancellor ensured that many of the harshest spending cuts won’t kick in until after the next General Election. Sadly, there is no indication that a Labour Government would be different.
Labour is wholly signed up to Brexit; which has led to a self-inflicted slowdown in UK trade and investment of 15 per cent which would not have happened had we remained in the European Union.
The SNP Government is doing its best to protect people from the worst of the cost of living crisis. For example, last week it extended the Scottish Child Payment to £25 a week for over 400,000 children under 16; a payment unavailable elsewhere in the UK.
However, dealing with the cost of living crisis is becoming increasingly difficult for Holyrood when Scotland’s budget has been eroded £1,700 million this year by inflation.
Scotland didn’t vote for this Tory Government, or for Brexit. Scotland needs independence to build a strong, fair economy that works for everyone.
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