When Bill Clinton told the American people that “It’s the economy, stupid” he was recognising that the Economy was the only important issue. That is where we are at in the UK just now and we are facing a decade of recovery.
Unfortunately the Labour Party have failed to demonstrate that we are in a disastrous state – the few brickbats thrown at the Government have been ineffective to say the least.
It is galling that the Government have been allowed to constantly claim that Labour destroyed the economy, when clearly it was caused by the banks, and when so many other countries ended up in the same boat. Failure to trounce these claims has allowed the Government to constantly excuse all problems and mistakes with “ we were left with the worst deficit ever etc …..”. OK 3 years ago having lost the election, it may not have been the right time for Labour to try to defend against such accusations, but these cannot continue to be unchallenged if the Economy is to be recovered now
Thinktank ‘National Institute of Economic and Social Research’ NIESR is run by former government economist Jonathan Portes Tuesday 5 February 2013
• notes a string of indicators show the UK heading into a triple-dip recession
• predicts poor growth this year (only 0.7%) unless state tries to stimulate spending
• warns that without increased government spending on infrastructure projects and greater efforts from the Bank of England to stimulate demand, the economy will continue to suffer
• said the recovery would depend on a resumption of consumer spending, higher spending by private companies and export sales
• reiterates their view that such a recovery would best be supported by a significant increase in public sector net investment, with looser fiscal policy in the short term while demand remains weak, and radical reform of the financial sector to support lending to the real economy
• suggests a delay in some public spending cuts would also support consumer confidence in a year when welfare cuts are expected to take their toll on consumption
• NIESR’s gloomy assessment of the UK’s prospects reinforces the thinktank’s long-held view that Britain is locked in the longest depression since the 1920s and that it will be several years before growth breaks through the 2% barrier
The figures will dismay the chancellor, who is under intense pressure from all sides to kickstart growth this year. Opposition MPs want him to delay cuts to public spending, while MPs on his right flank have demanded that he push through tax cuts to boost growth, even at the expense of further reductions in welfare payments.