Ashcroft has argued that the cuts are particularly likely to affect Scotland
Brian Ashcroft, professor of economics at
Strathclyde University, has queried the effectiveness of the recent public spending cuts, warning that the strong economic growth currently occurring in Germany and France is “difficult” for the UK Government.
The German economy has grown by 1.5 percent during the first quarter of 2011 – three times the 0.5 percent growth rate seen by the UK. Germany’s economy also grew by 0.4 percent in the final quarter of 2010 – unlike the UK, which saw a drop of 0.5 percent.
The same
European Commission data also revealed that the French economy has grown by one percent in the first three months of this year, as well as growth of 0.3 percent at the end of last year.
Ashcroft said: “France and Germany don’t have fiscal consolidation as extreme as ours. This is difficult for the Government, when you compare with [mainland] Europe.
“I am sure the Chancellor can take no comfort out of the stronger performance of those other countries ... I think he is going to tough it out, but there is no doubt the UK economy is displaying weakness and that may in part be due to the fiscal consolidation.
“It is a concern and, also, it is quite clear our households are not recovering their spending patterns as quickly as one would hope, in part because we have all the implications of the credit crunch and indebtedness but also, with our inflation rate being higher here, the growth of real income is much less here.”
Ashcroft has consistently argued that the cuts will increase pressure on both Scotland and the wider UK economy. David Blanchflower, a member of the Bank of England’s
Monetary Policy Committee, agrees with Ashcroft, warning last year that Scotland in particular was in “great danger” from the cuts. Blanchflower, who accurately predicted the effects of the 2008 to 2009 recession, warned that Scotland was particularly vulnerable to cuts as it relies heavily on the public sector.
Overall growth in the Eurozone at the end of the first quarter of 2011 was 0.8 percent, a figure even Greece, a country that requested a Euro bailout last year, achieved. Ashcroft has argued that in the long term, Eurozone economies could be affected by a Greek default on its debt.