Margaret Cuthbert: Why we need to face up to our economic weaknesses urgently

Economist Margaret Cuthbert takes a look at the economic circumstance in the UK following the Brexit vote

THE overall Leave vote success in the UK referendum on membership of the EU has led to very interesting times for Scotland where the majority voted to Remain in the EU. Why there was such a difference between Scotland and the north of England is itself of great interest. 

The decision to have a referendum on UK membership of the EU at this particular time was itself a very bad idea, made, many suspect, just to bolster Prime Minister David Cameron within his party after his weak negotiations with the EU on the current terms of UK membership. Why such a bad idea? Because of the current poor state that we are in, and that includes Scotland.

The UK has a large trade deficit, a very uneven economy both geographically and demographically. It has too big a differential between the rich and the poor, too big a differential between low and high income levels, little in the way of production compared to most of its competitors, and a crumbling of services which were once public and which are now either owned or heavily influenced by big business. 

The UK has a large trade deficit, a very uneven economy both geographically and demographically.

Scotland is actually little different, but, in addition, we do have large areas of our land still owned by large landowners preventing easy access and restricting tourism and other industries.

Successive governments, both in Scotland and at UK level, have produced their glossy reports promising improvements. Going behind the documents and researching the detail shows all too often that in Scotland the wonderful research that was supported by us has ended up not assisting Scottish businesses, but foreign direct investment - in many cases here today, gone tomorrow. 

Successive governments of the UK and of Scotland have never seriously tried to alter our very heavy dependence on the financial sector for both employment and income - despite all the political speeches promising home-grown improvements in technology businesses, manufacturing, bio sciences, etc.

If politicians were at all serious at trying to readjust the economy then they would have known that there was a real need to have a period of no trade unrest while it gets on with the business of restructuring its economy.

So, why would the UK Government hold a referendum which was bound to expose more the raw feeling against its last 40 or more years of incompetence rather than anger against the EU?

Scotland is actually little different, but, in addition, we do have large areas of our land still owned by large landowners preventing easy access and restricting tourism and other industries.

In the weeks preceding the referendum, it was already obvious that many of us were classified in that insulting way as "swing voters". Insulting, because the reason we found it hard to make up our minds was not that we were thick, but because our politicians and media had completely failed to outline clearly over the many years that we had been EU members. how exactly the EU benefited us and, on the other side of the coin, what we had given up by being members and badly needed changed. 

At the UK level politicians tried to turn voters' attention away from their economic inadequacies, as if all of the issues they were talking about were the responsibility of the EU. "No me, guv."

On the Remain side, supported heavily by big business, the fear factor was huge, (probably rightly so), but was unsuccessful. The "refeened" shady suburbs of cities such as London and Oxford did vote to Remain. Their continued comfortable existence depends on strong ties with Europe. 

But Cameron and his Cabinet had not properly registered that the rich man at his table has to provide properly for that group of society that they would not consider inviting to their dinner parties. One cannot hollow out the economic life of huge parts of the country, fail to provide a secure worthwhile future, reduce social support, and think they will support you. 

In addition, Labour in England is only now truly experiencing, as they have in Scotland and Wales, the disgust that many former lifelong Labour supporters have for New Labour.

It was easy for the Leave side to manipulate those currently stressed by today's UK economy into believing that a large part of the problem was immigration - a problem which would go away if we left the EU. They made little mention of the poor state of the UK economy and its far too great dependence on a volatile financial sector, which already brought us to our knees in 2008.

At the UK level politicians tried to turn voters' attention away from their economic inadequacies, as if all of the issues they were talking about were the responsibility of the EU. "No me, guv."

An intriguing question, however, is why did Scotland not vote to Leave? 

Was it because voters had more reason to believe that our economy is up the creek without the proverbial paddle if we leave the EU? Is it because they actually believe that some of the government glossiest promises will come to fruition - even though very few projects get a serious post mortem on whether they met with the promises made? Or is it that it does not bother Scots that many of the EU institutions are undemocratic?

Whatever, Scotland is now in a dangerous position, as is England. A very large change is needed in our scrutiny of government support and decision making to help us find the best way forward - and that means, too, that people in Scotland need to make themselves far more vocal in demanding scrutiny of government.

Picture courtesy of Koala99

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