Osborne still getting his sums wrong

by Daphne Liddle

THE GOVERNOR of the Bank of England, Mervyn King, last Wednesday announced that the British economy is not expected to grow at all this year — after having predicted three months ago it would grow by 0.8 per cent.

But since Britain’s Gross Domestic Product (GDP) has fallen by 00.7 per cent in the last quarter and by 0.3 per cent in the first quarter of this year, we will lucky indeed if the final figure for the year leaves the economy merely standing still.

The Office for National Statistics blames a fall in the construction sector — a social crime at a time of rising housing crisis.

The ONS also said it was not sure of the effect of the wet weather and the extra bank holiday in June.

Chancellor George Osborne is blaming all these things and the uncertainty of the future of the eurozone. But he continues to ignore the IMF and Barak Obama who have warned him that his austerity measures are so tight they are strangling off any chance of recovery.

His cuts are ideologically driven and he understands very little about economics.

Unite general secretary Len McCluskey wondered whether Osborne would like to be a contestant in Alan Sugar’s programme the Apprentice to learn how to run a company.

And the BBC’s economics commentator Stephanie Flanders commented: “A year ago the Bank thought the UK would grow by around two per cent in 2012. Now it does not expect us to grow at all.

“That change to the forecast was not what anyone in the city would call news. Given the recent economic data, it would have been a shock if the Bank had not slashed its old growth forecast.

“What is a little more surprising is the Bank does not seem to be planning to do very much about that weaker economic outlook.”

Labour’s shadow Chancellor, ED Balls, commented on the news, saying the figures were “truly shocking” and showed the Government's economic plans had failed.

"If these figures don't make the chancellor wake up and change course, then I don't know what will," he said. "Thank goodness the Olympics will give our economy a much-needed shot in the arm. But this short-term boost is not enough — we need a plan B now to get the economy moving again and radical reforms to set Britain on a new course for jobs, growth and long-term prosperity."

TUC general secretary Brendan Barber said: “We all know the economy is currently stuck in a rut but it's now looking less like a blip and more like a much longer slump.

“The UK's dire economic performance is causing permanent damage and putting thousands of jobs on the line. It is not good enough for the Chancellor to stand by and rely on the Bank's monetary policy measures to get us out of this mess.

“With all the main forecasts now pointing towards a lost decade, it's time for the Government to call time on self-defeating austerity and start looking at ways to stimulate the economy.”

When a debtor appears before the courts who cannot pay what they owe, the courts may distrain that person’s goods — send bailiffs to seize them. But they always leave that person’s “tools of the trade” — their means to work their way out of debt. Osborne is rapidly demolishing this country’s means to recover and work its way out of debt. As long as he is in charge of our economy we can only go deeper into debt. Even by Tory standards he is an economic ignoramus and should not be put in charge of an office tea-money fund, let along a nation’s economy.

The only positive aspect is that he is likely to wreck capitalism even more quickly than it is wrecking itself.