UK industry will come out well from bad recession

. Such was the opinion expressed by Sir David Freud, who was an advisor on welfare reform to the Labour government in 2008 but is now a member of the Conservative party’s economic recovery council and a “Working peer” opposite Peter Mandelson. Presenting the Lord Mayor’s Lecture at the University of Kent on Friday February 20th, he said that, “The economy is going to see a very bad bust”, which would be worse for us than other countries because, “Our financial industry is bigger relative to the rest of the economy than anyone else’s. ” However, he also predicted that relative to Euro zone countries, “Our factory cuts are going to be infinitely less bad”, which he attributed to Britain’s maintaining control of its currency and interest rates as well as having, “Flexible pay rates”. Furthermore, with regard to the housing market, he predicted that once prices come down”, which he expected to be by a final total of 35%, construction would recover because, “There is a shortage of houses”, unlike Spain where there is a surplus, particularly of holiday accommodation, and where he expected unemployment to reach 20%. Unemployment in the UK, on the other hand, he thought would reach about 2 million, plus, “3.5 million already trapped in incapacity benefit”, a matter that he has long wanted to remedy. When we asked him about the future of UK manufacturing, he replied, “I think we have a great future. Our future is in engineering design especially bespoke design which we are very good at, as shown by out motor racing engineering.”