Prestwick Airport and CalMac ferry joy amid Tory gloom

Chancellor Jeremy Hunt’s Autumn Statement, delivered on November 22, fell firmly into the “gloom” category.

READ MORE: Ian McConnell: Torn-faced Prestwick Airport critics should lose their frowns

We should not have been surprised by this. He was, after all, part of the David Cameron and George Osborne administration which kicked off the UK’s savage and entirely counter-productive austerity programme back in 2010.

And Mr Hunt, however the Conservatives might want to portray him, looks to be every bit as much the austerity chancellor as Mr Osborne was from 2010 to 2016.

As such, it was entirely predictable that the Autumn Statement was devoid of any meaningful policy measures to revitalise the beleaguered UK economy.

The independent Office for Budget Responsibility, publishing its latest forecasts taking the Autumn Statement measures into account on November 22, projected only weak UK gross domestic product growth, of 0.7% in 2024 and 1.4% in 2025, following expansion of 0.6% in 2023.

Given the dismal state of the UK economy and the effect of this on households and businesses, we can expect the setting of interest rates to remain a contentious topic.

It has been interesting to observe growing calls for a cut in benchmark borrowing costs, from various senior economists and trade union Unite, a development which formed the basis of one of my columns in The Herald.

This article noted that there appeared to be little sign of any appetite to cut when the Bank of England announced on November 2 that the Monetary Policy Committee had voted six to three to hold UK base rates at 5.25% at its latest meeting. The three members who did not want to hold rates voted unsuccessfully to raise them.

READ MORE: Ian McConnell: Independent reality check for furiously impatient Brexiters

Announcing the decision, the Bank of England said: “The committee continues to judge that the risks to its modal inflation projection are skewed to the upside. Second-round effects in domestic prices and wages are expected to take longer to unwind than they did to emerge. There are also upside risks to inflation from energy prices given events in the Middle East.”

It added: “The MPC’s latest projections indicate that monetary policy is likely to need to be restrictive for an extended period. Further tightening in monetary policy would be required if there were evidence of more persistent inflationary pressures.”

So it definitely looks like there will be more controversy on the interest rates front ahead, as households and businesses continue to be weighed down by the surge in base rates, which were at a record low of 0.1% in December 2021.

In the meantime, we have had the ridiculous pantomime of the Conservatives trying to claim credit for a fall in inflation, from excruciatingly high levels, even though this drop has precious little to do with them. And we must remember the misery of the price rises we have already seen is baked in. Overall, consumer prices are continuing to rise at a rapid clip, even with the deceleration of the rate of increase, as my columns have observed.

READ MORE: Scottish Government's great CalMac ferry services plan

Given all this, good news seems even more welcome than usual right now.

Among the positives during the month, which formed the basis of other columns, were some cheering financial results from Prestwick Airport and the revelation by the Scottish Government that its preferred option would be a direct award of the Clyde and Hebrides ferry services contract to incumbent Caledonian MacBrayne.

Prestwick Airport, owned by the Scottish Government, unveiled its fourth consecutive annual profit, boosted in the year to March by a surge in passenger numbers.

The airport, which employs 330 people directly, reported an operating profit of £2.1 million for the 12 months to March 31, up from £1.9m in the prior financial year.

It described the 12 months to March this year as “challenging”, flagging the impact of Brexit on UK labour supply.

Passenger numbers in the year to March totalled 459,000, up from 118,000 in the prior 12 months. The prior-year period included restrictions on overseas travel arising from the coronavirus pandemic.

It was a solid and broadly based performance at Prestwick Airport, which also highlighted its provision of services to various military customers.

My column observed the Scottish Government did not have to lend Prestwick Airport any further money in the 12 months to March, or in either of the two preceding financial years.

And it declared that Prestwick Airport’s solid showing in recent years is surely a relief, including from the perspective of employment and the health of the South Ayrshire and broader Scottish economy. It remains to be seen whether, and to what extent, critics of the Scottish Government’s support for Prestwick Airport will be won over by this most encouraging news.

My column on the Clyde and Hebrides ferry services declared that, for anyone who has followed closely what has ensued from the Tory privatisation spree that began in the days of Margaret Thatcher, the Scottish Government’s plans for a direct award to CalMac rather than putting the contract out to a competitive tender in the open market should be heartening.

It noted the great turbulence in some of the big UK passenger rail franchises over the years, with some of the contracted arrangements having come completely unstuck, as well as the failure of energy sector privatisation to deliver affordable prices for consumers or security of supply.

CalMac knows the Clyde and Hebrides routes, and its customer base, inside out. It is a complex operation. And the Scottish Government outlined its plan for a clearer focus on “delivery of a public service”.

Amid the tumult, and with the UK macroeconomic outlook continuing to look dismal, it remains important to celebrate the bright spots, where they exist.