Time For A Change?

Posted on July 28, 2011

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words by Robert Pollard 

The current economic strategy being implemented by George Osborne came under further scrutiny this week after Britain’s latest set of growth figures made for very depressing reading. Mr Osborne’s dogmatic insistence that austerity measures are the only remedy for our economic woes looks increasingly ill-judged after figures for the second quarter of this year revealed that Britain’s Gross Domestic Product (GDP) grew by only 0.2 per cent; an even more distressing figure than the 0.5 per cent recorded in the first quarter. Worryingly, any hope that his government has an alternative economic policy seems misplaced given the rigid rhetoric that continues to emanate from the treasury office, something that has been a feature of Mr Osborne’s tenure as Chancellor of the Exchequer. Most observers now believe that the coalition must act quickly and change course if Britain is to fully recover and become a prosperous nation once again.

Mr Osborne’s reaction to the dire figures has been concerning to say the least, somehow managing to concoct a set of wild excuses which, in terms of stupidity, surpass the ones he provided us with after the poor growth in the previous quarter. Where last time he blamed heavy snowfall, this time his attention turned to the hot weather. He also cited the impact of the royal Wedding as having a negative effect, an event that had previously been seen as a surefire boost to the economy. His rigid ignorance is extremely worrying with Britain now really struggling to create any kind of growth. Taking into account the last two quarters, Britain is now only ahead of Ireland, Denmark, Portugal and Greece in terms of GDP growth across the EU.

With three quarters worth of figures having been released since the coalition was formed it is becoming clear that this government is less economically astute than the outgoing Labour government, who were widely castigated for their perceived economic incompetence. Mr Osborne has overseen growth totalling 0.2 per cent during his first three quarters in charge, far worse than the 2.1 per cent recorded during the final three quarters of Alistair Darling’s tenure, strongly suggesting that the fierce economic debate that defined the last election has, with hindsight, been won by Labour. Their slower deficit reduction plan is one backed by many commentators and economic experts, including Ann Pettifor and Victoria Chick, the authors of the brilliant research paper The Economic Consequences of Mr Osborne. By analysing the recessions of the past, their paper provides hard evidence to suggest that austerity measures are the worse course of action for a government to take during difficult financial times. They argue, much like former Prime Minister Gordon Brown, that stimulating the economy is far more sensible as it secures and creates jobs; a vital component of any healthy economy. The coalition have, in fact, done the opposite by making swingeing cuts and unnecessarily talking the economy down, something which has undoubtedly had a negative effect on consumer confidence. By comparing our economy to that of Greece and claiming Britain was close to bankruptcy, Osborne has sought to discredit the Labour government -something he has largely achieved – but in the process he has also succeeded in damaging our economy further and making his own job more difficult. How Vince Cable, a key Liberal Democrat minister and man of intellect and integrity, is working within the parameters set by Mr Osborne is a mystery to most onlookers and one could scarcely blame him for downing tools and making a stand.

To add to his woes, Mr Osborne has also had to admit that he made an error of judgement when backing the appointment of Andy Coulson as the government’s director of communications. Given the abhorrent phone hacking claims made against News International, to have had the former News of the World editor on his staff is embarrassing and calls into question his ethics and judgement. The number of meetings he has had with Rupert Murdoch and his associates is also highly distressing and one wonders how much more the country can take of such an incompetent man assuming such an important role in government.

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Posted in: Politics