Poor relations

While the UK Government blames the Ukraine war and Covid for the record drop on living standards, the Office of Budget Responsibility (OBR) claims that Brexit is also a factor. This helps explain why the UK has the slowest growth amongst the G7 leading economies, precipitating a 7 per cent fall in disposable income in real terms over the next two years.

The fiscal watchdog estimates that Brexit has reduced trading intensity by 15 per cent while the other G7 countries saw a significant trade recovery from 2020. It also estimates an extra payment of nearly £20 billion in divorce payments to the EU is outstanding. Furthermore, the UK’S loss of exports to the EU has not been recouped by exports to other countries, with these down 18 per cent on 2019 levels. This contributes to long-term GDP expected to reduce by 4 per cent as a result of Brexit, making our economy smaller and the country poorer.

The most vulnerable are protected by inflation-matching increases in benefits and pensions. Even these groups will be worse off, however, as they spend much more of their income proportionately on food, which has seen price increases of 16 per cent over the last year, far outstripping the 10 per cent uplift.

The Scottish Government needs to redistribute income through tax, with those earning over £100,000 paying the top rate of tax, and increase this to 50 per cent. It’s obscene anyone should be earning this level of income when millions are struggling to pay their basic bills.

As the UK parties will not reapply to join the EU to grow the economy they must consider joining the European Free Trade Area or the country will continue to be poorer. This has many of the benefits of an economic union with the EU without being tied to its agricultural and fisheries policy.

NEIL ANDERSON

Edinburgh