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‘You will have a cheery future’
A TOP economist said that he was “upbeat” about the UK during a speech in Leeds.
He said there would be improvements in the economy but feared eurozone problems and military activity in the Middle East could cause problems.
And he praised the British political system which he said could avoid the sort of stalemate seen in his native USA.
Dr Irwin Stelzer, pictured, a senior fellow and director of influential Hudson Institute’s economic policy studies group, consultant to businesses and academic who has taught at Cornell, Connecticut, New York and Oxford universities, was speaking at a special seminar on the importance of Heathrow Airport to the Yorkshire economy.
He also said he believed that Greece would leave the eurozone, and that Israel would launch a military attack on Iran’s nuclear facilities. He also thinks that Barack Obama will win this year’s US presidential election.
Dr Stelzer, who was feted by Tony Blair, Gordon Brown and the Bush administration, said that he could see hints that the British economy is improving although he admitted short-term difficulties.
He said: “You are in for some considerable pain in this country.
“You do have unemployment at the highest for 16 years and you do have businesses suffering for a lack of credit.”
Dr Stelzer said that there would still be difficulties when the economy picks up. He said: “In the upturn you will still have a social problem of families who have not seen anyone go to work for three generations. That is a structural problem.”
He said that the Government could not rely on austerity measures alone to cure the economy’s ills. He said: “Austerity alone cannot reduce the deficit. You need growth. There is no other way out of it.”
He said that Chancellor George Osborne had not really cut public spending significantly – it has been by less than one per cent – and that growth could only be achieved by making it easier for firms to hire staff, reducing regulation and offering a “better environment” for business.
Dr Stelzer said: “There is no way you are going to have a consumer-led recovery. You are not going to have a business-led recovery because businessmen are finding it hard. You are not going to have a small business-led recovery.”
He said the only alternative then was an “export-led” recovery. He said: “If you have an export-led recovery you have to go to the rest of the world.
“Your are either part of the global economy or you are not.”
Dr Stelzer said “the money” is in Asia, Latin America and the emerging economies.
Dr Stelzer praised the UK. He said: “This is a great entrepreneurial economy. It is well governed – I know you will not believe that, reading the papers.
“I am really upbeat about Britain. If you can resolve the short-term problems you will have a rather cheery future. There is light at the end of the tunnel.”
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Saturday 26 May 2012
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