Recession kills UK royal yacht idea

The idea of using taxpayers’ money to buy a new yacht for the UK’s Queen was faced with reports that the country’s economy has already fallen into a double-dip recession.

In a leaked confidential letter, Britain’s Education Secretary called for a £60 million royal yacht to be donated by the public to the Queen for her to enjoy this upcoming Diamond Jubilee marking 60 years of her reign.

The idea floated by Michael Gove was swiftly torpedoed by the coalition government with the prime minister’s official spokesman saying “David Cameron believed it would be inappropriate to spend public money on a yacht”.

It was also faced with a report by two respected economic forecasters, which said the UK is likely to have already fallen into recession as the eurozone crisis scuppers hopes of imminent recovery.

The Ernst & Young ITEM Club and the Centre for Economics and Business Research (CEBR) both said gross domestic product (GDP) shrank in the final quarter of last year, and it will fall again in the first three months of 2012.

“Figures for the last quarter of 2011 and the first quarter of this year are likely to show that we are back in recession and we are going to have to wait until this summer before there are any signs of improvement”, said Professor Peter Spencer, chief economic adviser to the Ernst & Young ITEM Club.

“But it’s not going to be a repeat of 2009 – we are not going to see a serious double dip”, he said.

This is while that the education secretary had said in the leaked letter to fellow ministers that the celebrations go beyond those of previous years to help the public forget about the austerity measures.

His offer was swiftly rejected by Prime Minister David Cameron’s official spokesman.

“Clearly there is a difficult economic situation, there are scarce resources, and therefore we don’t think it would be an appropriate use of public money at the present time,” Cameron’s spokesman said.

Tom Watson, the chairman of opposition Labour party, wrote in a blogpost that although the diamond jubilee should be celebrated, Gove has shown how out of touch he was with this proposal.

“When school budgets are being slashed, parents will be wondering how Gove came even to suggest this idea. This is not the time to spend £60m on a yacht,” he said.

Meanwhile, the economic forecasters said that the economy will probably shrink in the current quarter after contracting in the last three months of 2011. They also cut their 2012 growth forecast to 0.2 percent from 1.5 percent.

And, a UK thinktank warned that Britain’s jobs market will face its toughest year in two decades with the number of people out of work expected to rise to 2.85 million by the end of 2012.

According to the Item Club, unemployment in Britain would rise by a further 300-thousand to just below three million people in 2012.