Written by 3:45 am Europe Economy

How is Europe handling inflation, energy prices? | Opinion

As a proud Scot who has had the privilege of serving in both the House of Commons and the Scottish Parliament, I felt somewhat obliged to respond to the article written by Evan Ward titled “What the U.S. can learn from a recession in Britain.” This article was overly negative and does not present, I believe, an accurate representation of what is happening in the United Kingdom. 

Like most countries in the western world, the United Kingdom is facing a difficult economic outlook. Inflation is high as activity returns to the economy after two years of COVID-19 lockdown. Energy prices are rising due to economic sanctions against President Vladimir Putin’s regime. These difficulties, however, are not unique to the United Kingdom, and it is disingenuous to suggest so. 

Despite the political turmoil we have faced, the U.K. government has been nimble in its response to these challenges. The U.K. was the first country in the world, for example, to send defensive weapons to our friends in Ukraine, showing that we are willing to use our Brexit freedoms to defend liberty across the world, in spite of the economic consequences. Defending freedom often comes as an economic cost. It has in this instance. 

The Energy Price Guarantee puts a cap on the amount you can be charged per unit of gas or electricity, to a household average of around £2,500 a year. This is saving individuals, families and businesses around £900 a year.  

The U.K. government is taking proactive action to boost domestic energy supply, ensuring that our country becomes energy resilient and has much to teach the world on our approach. A new oil and gas licensing round has been launched, which is expected to lead to over 100 new licenses. There has been an acceleration of new sources of energy, including nuclear, wind and solar. The U.K. government is undertaking reforms to the structure and regulation of the U.K. energy market, making sure that this market serves the people’s and country’s needs. 

In the three months prior to August 2022, U.K. exports increased by £6.8 billion. An example of an industry that is doing well, despite the difficult economic outlook, is Scotch whisky. During 2021, the value of Scotch whisky exports was up 19%. Growth was driven in Asia Pacific and Latin America, with strong growth also seen in India and Brazil. Despite Brexit, exports to the European Union grew by 8%. And using our Brexit freedoms, the U.K. government successfully negotiated the removal of the 25% tariff on Scotch whisky in the U.S., resulting in exports growing there as well. 

It is not only trade that shows signs of encouragement for the U.K. economy. A report from Dealroom shows that London has attracted £7.8 billion in fintech venture capital funding since the start of 2022, edging it ahead of both San Francisco and New York to become the world’s biggest center for fintech investment. The Z/Yen group’s latest green finance index, released in October, showed that London is the greenest financial center in the world. 

These success stories show that the U.K. is embracing economic innovation, understanding that this is a central ingredient to growth. Liz Truss was also right to emphasize the need for supply-side reform, and we are seeing a lot of her arguments in this field being implemented by the government led by Rishi Sunak

What has impressed me the most about my country in the past six months, however, is how calm our citizens have been. Having three Prime Ministers and a new monarch, after the longest ever reigning monarch in British history, could have caused disarray. Yet, as the saying goes, the British kept calm and carried on. It is who we are and what we expect of ourselves after centuries of doing things in our own peculiar way. 

With poignancy, Britain was on the world stage in September after the death of Her Late Majesty, Queen Elizabeth II. On the drive from Balmoral to Edinburgh, Scotland’s natural beauty was on display. The funeral in London and Windsor showed the power of Britain’s customs and traditions. And throughout all of this, the people of my country were united. 

It is in this promotion of the common good that the British spirit remains high; that we continue to push above our weight when things appear to be difficult; and it is why we will take full advantage of our newfound freedoms and forge closer ties with one of our greatest allies, the United States of America. 

Stephen Kerr is a member of the Scottish Parliament and a former member of the United Kingdom Parliament.

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