The failing economy:TORIES BLAME THE WEATHER

by Daphne Liddle

THE CON-DEM Coalition this week tried to blame the weather for a fall in the economy that they did not expect but just about everyone else did.

And they faced mounting criticism from Richard Lambert, the retiring chief of the Confederation of British Industry for their lack of vision or any policies that could lead to economic growth.

Mervyn King, the Governor of the Bank of England, last Tuesday while arguing for a wage freeze, also appeared to disagree with the Government’s analysis. He said the data bore out his earlier prediction that the recovery would be “choppy”.

“Even abstracting from the effects of snow, growth at home slowed in the second half of last year,” he said.

Britain’s economy shrank by 0.5 per cent in the last three months of 2010. The severe weather hit activity in that quarter, but the Office for National Statistics (ONS) said even if the weather impact had been excluded, activity would have been “flattish”.

Chancellor George Osborne said the numbers were disappointing but the Government would not be “blown off course” from its austerity programme. The contraction took bourgeois economists by surprise, as forecasts had been for growth of between 0.2 per cent and 0.6 per cent. And they compound the higher than expected inflation figures announced the week before.

Meanwhile Sir Richard Lambert used his last major speech as the head of the CBI to make a withering assault, warning: “It is not enough just to slam on the spending brakes.”

He attacked the Government’s failure to get banks to lend to businesses, saying this was vital to Britain’s recovery and could create 1.5 million new jobs over the next five years.

He said politics “appeared to have trumped economics on too many occasions over the past eight months” and accused the Coalition of making policies purely for political reasons, and which are “careless of the damage that they might do to business and to job creation”.

Osborne’s use of the weather as an excuse for his failures cut no ice with the unions. Commenting on the fall in the economy, Unison general secretary Dave Prentis said: “Here is proof that Tory cuts are poisonous for our recovery.

“The economy is not strong enough, the private sector cannot come to the rescue, and things are not going to get better. Unemployment is already at 2.5 million, and the toll will climb higher still, stamping out demand in our economy. The Government’s ideological drive to shrink the state is costing this country dear.”

The general secretary-elect of the giant union Unite, Len McCluskey, said: “It’s beyond belief that the Tory-led coalition is actually trying to blame the weather for these appalling growth figures. George Osborne sounds like a rail boss trying to blame delays on leaves on the line.

“The blame lies squarely on this Government’s policy of massive spending cuts with no strategy for growth. If they had a growth strategy, it’s obvious the figures would be better than they are.

“The Government’s economic credibility is now in tatters, but it is ordinary people who will be affected not the out-of touch elite in the Cabinet. It’s deeply worrying that a double dip recession is becoming ever more likely.”

And the civil service union PCS agreed. PCS general secretary Mark Serwotka said: “Rather than blame bad weather over a short period in December, the Government must carry the can for the decline in our economy over the last three months of 2010.

“Even allowing for the weather, the ONS says growth would have been flat, after falling to 0.7 per cent in the third quarter of the year from 1.1 per cent in the second quarter.

“These figures show the coalition government’s plan to slash public spending, in the vain hope the private sector will step in, is simply not working.”