Thursday, 25 April 2013

UK economy: two cheers for the government

‘We are building an economy fit for the future,’ the UK Chancellor of the Exchequer, George Osborne, announced today.

The reason for his satisfaction? The figures for GDP in quarter 1 show we have avoided a triple dip recession: to my heartfelt relief, GDP grew in the quarter and the unrelenting decline seems to have been stemmed. For now.

But how much was the growth? Just 0.3%. If that’s a harbinger of the economy of the future, there isn’t a lot to look forward to. 

On the other hand, looking back isn’t particularly heartening, either, at least for the administration.

The British ConDem government, the so-called coalition between Conservatives who run the show and the Liberal Democrats who rattle along behind, like cans attached to the back of a newlywed couple’s car, doesn’t play the blame game. Of course. No-one does. 

It merely points out that it inherited a miserable economic position from its Labour predecessors.

That’s not blame. That’s recognition of the fact that Labour was in power before them and applied its economic policies. So it’s obviously their fault. Not blame, just a statement of fact.

What they’ve never explained, at least not to my satisfaction, is how the presence of a Labour government in Britain caused so much damage to the economies of the United States, Italy, Ireland, Spain and, indeed, most of the rest of the world. It had always seemed to me that there might have been some kind of global economic crisis, of which Britain, even under Labour, was more a victim than a perpetrator. But, hey, I may just be naïve.

Just for the sake of argument, though, let’s say that what happened back in 2008 really was the worst financial crisis since 1929. Wouldn’t you say that to get us back out of recession after just five quarters, and then take growth to 7% as part of five consecutive quarters of growth, was quite impressive?

Alistair Darling: a comparison that doesn't flatter Osborne

Well, so would I. Quite an achievement by Osborne’s predecessor, Labour Chancellor Alistair Darling. 

Particularly if ten ConDem quarters later, as the graph shows, we’ve had only five quarters of growth. One was impressive at 0.9%, but the rest were pretty anaemic. And the latest, as we were saying, was just 0.3%.

An economy fit for the future? Osborne
s not really very ambitious, is he? Or maybe he prefers to keep us looking forwards rather than back. Because he’s way behind the performance achieved under Labour just before he took office. 

No mileage for Osborne in drawing attention to that comparison...

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