THE Government has failed to prepare for economic shocks and has left the country vulnerable to movements in global markets, a leading economist has warned.
Andy Mayer, energy and infrastructure analyst at the Institute of Economic Affairs, said people are suffering because of a lack of government planning.
He told GB News: “The underlying crisis is a supply shock, we’ve had the supply shock of the pandemic return, people coming back spending more money, supply chains adjusting across the world to that, we’ve had the shock of the Ukraine war which has been particularly important, irrespective of energy prices.
“They [Government] could have prepared for some of these things a bit better domestically. For example, they could have ended the moratorium on fracking in 2019, which means that we’d have more local supplies.
“They could have built up gas reserves, which means they would be able to control more of what we’re putting on the market and locally during the winter.
“So things that could have done that things they didn’t do they essentially left themselves vulnerable to the movements of global markets of which they have no control.”
His comments, made during We Need To Talk About with Alex Phillips on GB News, were echoed by Peter Edwards, the former editor of the LabourList website.
Mr Edwards said: “…if you don’t invest in your energy infrastructure, for example, or build up your gas reserves, then the cost goes up, or the price goes up and you become more dependent on overseas nations.
“Similarly, if you don’t invest in your food capacity, you become reliant on other countries and obviously there used to be this great phrase that if America sneezes, the world catches a cold.
“We’re seeing that in Ukraine, that horrific war, but Ukraine is such a big grain producer, that economic impact is beyond just Ukraine, Russia and oil, it is grain as well.”
He added: “Food prices are going to carry on going up and we had what was described as an apocalyptic scenario from the Bank of England governor yesterday.
“I feel very strongly that all the driving factors, inflation, which is going to hit 10%, are not force majeure, they go back to government inaction.”
