Welcome to my blog. I am a former local journalist who now works in PR and the Conservative council candidate for Horsell West at the next election. This blog will keep updated on local issues as well as my interests and quirky news stories.
Well, don’t you feel better now? The UK is officially out of recession (link to The Times because the BBC’s coverage reads like a Treasury press release), so we can all get back in our cars, go back to shopping in Waitrose and start thinking about re-mortgaging the house. Not quite. Because the government has been pumping so, so much money into our economy during the past 12 months that anything other than growth – however pitifully small – would have been utter humiliation. It’s also worth pointing out that we still have January and February’s figures to come before Q4 2009 growth is confirmed.
I believe that 0.1% is rather convenient for Gordon Brown and will be revised downwards in a few weeks when the fuss has died down. But there is a fundamental distinction between the two parties on how to maintain recovery – and remember that a second “after-slump” in the face of first recovery is something that has characterised nearly all the post-war recession. Labour wants to continue to prop up the economy with taxpayers’ money and there’s nothing particularly wrong with that in such dire circumstances.
The BBC's graph is stastically nonsense
But at some point, the props have to be taken away – and at the moment, the whole thing would come crashing down if that were the case. This is the graph that the Treasury and the BBC wants people in Britain to see. It looks like we are out of the woods. With another 18 months of quantative easing and borrowing, the figure could quite easily be pushed up to 2 or 3 percent and the government given credit for not just a full recovery but a new boom.
The Guardian's graph not only shows us where we actually are but compares with other recessions
This, though, is the Grauniad’s somewhat more realistic assessment of the situation that shows the recession has wiped out all the growth in the British economy since 2005. I have heard both George Osborne and Phillip Hammond in the media today say that the only thing that will keep us out of recession is the private sector’s profits, jobs and tax revenues and that interest rates must stay low to stimulate that growth. We need to cut the defecit to bolster our credit rating and boost our floundering currency.
A rise in interest rates, which would have an adverse affect on people’s spending power, is the most serious threat to our sustained economic recovery – apart from a fourth term for Labour. More borrowing could mean a softening of Britain’s credit rating and devaluing of the pound, which would make government guilts and bonds less attractive to investors. The government desperately needs to harden these investments to pass Britain’s debt onto those with the money to buy it; cuts in spending alone coupled with tax increases will not be enough to pay off our borrowings.
I want to see Ken Clarke and Phillip Hammond blast through Labour bluster about recovery and remind people that whatever Labour has done to bring us out of recession – and you can argue about the effectiveness vs cost of that – it’s nothing compared to the damage they have done to British business and trade, as well as landing us with a huge debt to pay off. I want to see people reminded about this until Gordon Brown doesn’t want to talk about the economy anymore. Brown’s plans to continue to spend his way out of recession and worry about the economic consequences later should convince that he can’t be trusted on this.
He’s been saying for ages that the Conservatives have made the wrong call on the economy every time. It’s not true and it’s time we hit back. He wants to continue to mollycoddle the nation and extend the pain for longer. The Conservative approach is not just a self-flagellating short, sharp shock; it makes absolute economic sense and it’s about time we said so.
