Friday, 08 February 2019 16:03

MUNDELL SHOULD APOLOGISE ON ICELAND TRIP

‘ARC OF INSOLVENCY’ REMARKS COME BACK TO HAUNT TORIES
 
The SNP has demanded that David Mundell apologise for his ignorant remarks on the Icelandic economy, as he visits Reykjavik today.
 

Speaking in a TV debate in 2010, the now Scottish Secretary dismissed Iceland as part of an ‘arc of insolvency’ – a clear insult to a successful, independent European nation whose economy now outperforms the UK’s.
 
The UK economy is set to be hammered by Brexit, with businesses relocating and hundreds of thousands of jobs lost. The Bank of England cut growth forecasts yesterday in light of ongoing Brexit woes and warned of the UK economy sliding into recession this year.
 
Commenting, the SNP’s Tom Arthur MSP said:
 
“The Tories are an embarrassment. They’re staring the disaster of Brexit in the face and only now waking up to the consequences.
 
“Scotland has always looked to share in the success of our independent North Sea neighbours – looking outwards to grow trade links and cooperation.
 
“The insular UK, meanwhile, has form in insulting them.
 
“But now the panic of Brexit has hit home and the UK government is desperately trying to cut new trade deals, in a last ditch attempt to stop the economy tanking.
 
“For starters, David Mundell should use his trip to Reykjavik to apologise for his previous comments – and he should also acknowledge that Iceland’s economy now outperforms the UK’s.
 
“Just as Iceland benefits from being a small, independent European country, Brexit underlines the benefits of decisions being taken in Scotland rather than at Westminster.”

 
Iceland remained richer per head than the UK throughout the financial crisis.
 
 GDP per capita at constant prices in PPP in 2011 international dollars - IMF World Economic Outlook Database, October 2018
 

  2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Iceland $44,929 $42,114 $40,562 $41,180 $41,418 $42,625 $43,058 $44,518 $46,969 $47,427 $48,637
UK $38,489 $36,595 $36,926 $37,222 $37,511 $38,039 $38,863 $39,463 $39,840 $40,259 $40,545

 
Debt in Iceland fell much faster in the UK – which is now significantly more indebted than when Mundell dismissed Iceland as in ‘insolvency’.
 
 General government net debt as percent of GDP - IMF World Economic Outlook Database, October 2018
 

  2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Iceland 52.22% 64.70% 63.58% 59.69% 61.61% 60.03% 54.01% 47.79% 39.64% 34.15% 30.34%
UK 43.86% 57.02% 68.05% 72.49% 75.55% 76.82% 78.75% 79.29% 78.84% 77.86% 78.01%

 
Iceland remains a fairer country, with income inequality lower than in the UK.
 
Income inequality - Gini coefficient, 2008 – 2016
 

  2008 2009 2010 2011 2012 2013 2014 2015
Iceland 0.305 0.266 0.249 0.252 0.253 0.241 0.246 0.255
UK 0.369 0.374 0.351 0.354 0.351 0.358 0.356 0.36

 
0 = complete equality; 1 = complete inequality
Source: OECD Social and Welfare Statistics: Income distribution

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