Today the UK economy is weak and vulnerable to economic shocks. It sits in a precarious position, especially as the damage from Brexit won’t be felt till after the 2020 transition period. Right across the board the risk of recession and possibly even depression has never been greater in the UK since the 1970s when Scottish oil revenues saved the UK from requiring a bail-out. Every year since then, Scottish revenues have been underpinning the UK economy through paying the cost of UK debt that was not generated by Scotland’s economy rather than being reinvested in the nation and this continues to hold Scotland’s economy back.
But still, the myth that the powerful and large UK economy somehow protects Scotland is still maintained by Unionist politicians and in the mainstream media. The stark truth is that the UK economy is not strong enough to withstand the pressures of Brexit or any global economic slowdown without serious repercussions for society including significant spending cuts on essential services.
Brexit may be a case study on the Westminster Government’s incompetence but we must remember that the full economic impact of Brexit will not be felt till the end of the 2020 transition period which could still end in a ‘No-Deal’ Brexit if trade talks collapse.
Even before the full impact of Brexit has been felt, the UK is floundering and we have seen that:
- The UK’s debt spiralled to £1,821.3bn, equivalent to 85.2% of GDP, 389
- The UK’s banking system, upon which it is overly dependent, collapsed in 2007 and still has not fully recovered
- Austerity for more than a decade has been cutting investment and real terms spending in Government services
- A slowing of investment has dragged on economic growth, meaning the UK has the equal worst growth in Western and Northern Europe, and the worst in the G20, 390
- The UK’s pension has fallen below levels of common decency, to being the lowest in the developed world as a percentage of final earnings, 391
- The UK’s World Bank Good Governance Score fell to 57/100 for political stability and it has changed prime ministers, again, since then, 392
- The UK’s exports per capita are less than half of Scotland’s and its international trade deficit in goods was £130bn in 2019, 393
- Wages in the UK fell in excess of 3% between 2007-15, falling slower only than poverty-stricken Greece in the developed world, 394
- Zero-hour contracts in the UK increased four-fold since 2000, 394
- The UK has the second-longest full-time working hours in Europe, two hours more than the EU average, but its productivity per hour worked is just more than half of Ireland’s and has only outperformed former Eastern Bloc nations, such as Estonia, Lithuania and Latvia (who all rate ahead of the UK in overall economic terms), 396 397
- The UK is the second largest oil producer in Europe, yet has the highest fuel taxes in the EU, 398
- The UN has deemed the UK’s cruel austerity policies as a breach of disabled people’s human rights, 399
- On top of all that, the UK Government has decided to leave the EU with or without a deal, 400
- The UK is hardly even democratic and seems resistant to progressive change. It has the second largest unelected chamber in the world. The House of Lords, with more than 800 members, is the second largest unelected legislative body in the world, surpassed only by authoritarian China. 401
Clearly the UK economy is in trouble and is incredibly poorly managed by Westminster’s political leadership. Scotland suffers by the fact that its economy is, by and large, managed by Westminster and Scotland’s public sector spending is restricted by wrong-headed austerity measures and weighed down by the UK’s (not Scotland’s debts).
The rest of the UK has decided at the ballot box that leaving the EU (with or without a trade deal) at the end of the 2020 transition period, adding barriers to international trade and blocking essential EU migration that will be tremendously damaging to Scotland’s hospitality and care sectors and our rural economy, is the answer. Scotland disagrees and more and more people are beginning to realise that Scotland’s prosperity would be better protected by a Scottish Government focused on Scotland needs.
The research findings referred to in this article are contained in our book. You can purchase your copy of Scotland the Brief here.