Economy threatened by outside shocks warns Ashdown

FORMER Liberal Democrat leader Lord Paddy Ashdown warned last night that the economy could still suffer from “outside shocks” as he backed the Coalition Government’s economic policy.

Lord Ashdown, who led the party from 1988 to 1999, was speaking at a business dinner in Manchester last night organised by law firm DLA Piper.

He said the Chancellor has taken the right course in his tough spending cuts – and without then the economy may have suffered a similar fate to Ireland.

“I can’t promise what has been done will work because of the possibility income of outside shocks on what is still a fragile economy. The first of these is that the American economy does not recover as strongly as we need it to; the Euro goes belly-up – and I think there are still issues with Greece and Ireland on this; and the third threat is if there is a sustained hike in raw material and energy prices.

“If we see sharp rises, then it puts any possibility of economic growth under pressure,” he added.

In a stimulating speech to more than 100 business leaders at the Bridgewater Hall, Lord Ashdown said the influence of what he termed the ‘Western Club’ of Britain, Europe and the US, was diminishing  and power shifting to new economies such as China.

He said politicians had to learn from the international business community that alliances and link ups with counterparts in other parts of the world were off fundamental.importance if the order is to be maintained in an era of globalisation.

“In the modern age, the most important about what you do is what you do with others,” he said. 

The former Royal Marine commando said a global consensus was required to deal with destabilising issues, such as the Libyan situation.

“I think Iraq and Afghanistan will the last time that the Western club acts in isolation.”

He said the EU should try and support the new democracies in countries like Egypt, by providing systems of government.

“Driven by technology and social networking sites like Twitter and Facebook the genie is out of the bottle – the Chinese call this phenomena ‘The beast with 1,000 heads’ and we cannot afford to stand outside the process.

“If we can help create genuine democratic republics in the Middle East then I think that will be a great opportunity. What I fear though is that the power will move from these dictatorships to extreme Islamic rule, and that would be a threat to Europe.”