Oh George, what have you done?

Three years ago this country entered the deepest recession for seventy years, brought about by an international banking crisis. The last government steered us through some choppy waters and we emerged from the recession last year. They bequeathed the incoming coalition some very positive economic indicators.

In less than a year we have lurched from good growth figures to negative growth. This gives me no cheer, despite my repeated warnings that the coalition’s plans were bad and destructive. The cuts are not only going to be catastrophic for public services, it is damaging the economy.

With rising taxes and unemployment it is no wonder that public confidence is failing. The coalition’s plans for dealing with the deficit are cuts that go too deep, too fast, and do nothing to stimulate the economy. Growth is needed, and the private sector has not produced it. Remember that Osborne’s promises included job creation in the private sector.

I am no deficit denier; clearly the deficit should be tackled. I do deny that cuts are the only way – I think increased tax take through economic growth would have gone a long way to sorting out our debt. I also think that last year’s recovery was clearly fragile, and the coalition’s plans were too drastic and too soon.

In the eight short months of this Tory government we have seen a bust in double-quick time. 2011 promises to be a painful year.

And what does the Chancellor offer up by way of explanation for the latest set of bad economic figures – snow. Did it never snow during the Labour years?

We need a change of direction, and we need it now.

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26 Responses to Oh George, what have you done?

  1. WhotoChoose says:

    Oh Please very positive economic indicators, green shoots of recovery!!!!!! Do me a favour one bad economic statistic and the world is ending!!!

  2. Elizannie says:

    I like this blog, Julian, because it sets out in a very concise way just how and why the new Government is trying to confuse the electorate with facts, figures and excuses.

    Within a couple of months of the election one could see that the economic indicators showed a small upward trend – the real legacy that the Labour government had left the incoming government. And what has that incoming government done with this legacy? Instead of ‘investing it wisely’ as one would expect such a Capitalist orientated regime to do it has instead inflicted a slash and burn policy to the extent that very many of the ‘ordinary men and women’ in the street are not spending anywhere because they are so worried about the future. Who knows where the future job cuts are going to fall?

    So blaming the snow does not cut it, Mr Osbourne. I believe the snow was even worse in Germany and yet their growth is ‘up’. Our consumers here are tired of the lies and scared by the bad news and really don’t want to risk their savings. What if these savings are going to be needed to visit a doctor or call an ambulance in the near future?

    What is the point of spending a lot of d-i-y or new furniture for the house if there is a risk that job losses may mean mortgage repossessions? Or if housing benefit cuts mean that moves to smaller, less convenient properties are going to be enforced?

    Holidays had better not be booked – it may be necessary to pay to go for a walk in the forest one day. And don’t forget if you go for a paddle at the sea-side the Coastguard services are going to be cut too so be even more careful than usual.

    The 20% extra vat is not much of a rise – until one looks at everything that rise will be on. Ok so no-one buys a new TV every week. But chocolate biscuits, various utility bills, clothes [that have the inconvenient habit of wearing out] etc etc….

    I am not even going to mention the rise in tuition fees at universities or the cut in the EMA, but we can always supplies some websites about those, can’t we Julian? And those school buildings that were to be replaced/renovated but have had this spending axed are strangely enough all state institutions – how many of the cabinet went to/send their children to private schools?

    Of course if anyone is rich enough to live in a tax haven or set up a trust fund perhaps they are not so worried as us. Let me know!

  3. WhotoChoose says:

    And Labour never confuse with facts, figures etc. Obviously you did not employ spin doctors or try and convince us that everything was great when in fact you had no clue of what was happening in the banks or had not worked out there was a property bubble!!! Oh and what about hospitals paying £500 for saltwater or is that value for money. Conservatives sending there children to private school oh obviously no labour supporters do that name Daine Abbot ring any bells. You are all as bad as one another. Stop bitching join forces and sought the country out you all got it in a mess and a big I told you so is just like the note left by the treasury “Sorry there is no money” this is our country not a plaything for the political class to milk dry and srep up. You are all responsible for this.

  4. Thanks for the complement, Elizannie.

    One rise that is really being felt in the pocket is the cost of fuel. Some of this is beyond Government control, but it is here that we get the VAT double-whammy. You pay more to drive your car, and so do the hauliers who deliver the food to your supermarket.

    WhotoChoose:

    Growth Q1 2010 = 0.3%
    Growth Q2 2010 = 1.1%
    Growth Q3 2020 = 0.6%
    Negative growth Q4 2010 = 0.5%

    These may be one little statistic to you, but to me this equates to job losses and business closures.

  5. Of course Labouur employed spin doctors, this was inevitable after Saatchi and Saatchi were employed by Thatcher. I don’t think any of ours hacked into peoples’ mobile telephones though.

    You are right to point out that Labour made mistakes. Of course all governments do. What gets me, though, is that the reality of the attacks on public services by this Con-Dem government has nothing to do with the deficit and has everything to do with ideology. Cameron, Clegg, Osborne et al may dress up the cuts as being an inevitable response to “Labour’s deficit”, but some us believe there is an alternative.

  6. WhotoChoose says:

    The labour alternative was to screw the rich and the middle classes until they squeaked. That is also blind ideology.
    We have had many a debate on productive and non productive I just want some sensible suggestions from everyone this is a time for National Unity and the attitude that “Thank God we lost the election now we can blame the others”. The people running the country whether Labour or Conservative or Liberal Democrat are only ever after on thing power and the trappings of it. They are not working class even the labour big wigs they cling on to the belief they are connected to the people but they are not. They have fat salaries, expenses, gold plated pensions (not incidentally touche dby labour in the great tax scam), most have had their free university education and try to pretend that any tuition fees are fare. It makes me angry that none of them offer an olive branch and work together in this time of crisis.

  7. It is very difficult to work together when you have such different views on how to run the country. But there is a coalition in place and come 2015 they will be judged.

    I am Labour and I consider myself working class. Mind you, I am not running the country ….

  8. WhotoChoose says:

    This is is exactly the issue I very much doubt you are working class in the true sense of the word. There is no class nownot as we know it it is all in the minds of the people who want to kepp up the pretense. you have I guess anice house that you pay a mortgage on, a non manual job and a pension. Same as me but I do not consider myself working class even though my parents believed they were. It does not exist now so lets stop thinking in these terms.
    So yours and the rest of the Labiour partys attitude is you voted for it so you can suffer it till 2015, great this is exactly the kind of attitude that is nto working for us today.
    If one party could one day say you know what soem of your ideas are quite good then we could get on and peopel will vote for them.

  9. Elizannie says:

    WhotoChoose:

    You do sound very bitter and angry and I think you have a tendency to twist the meaning of the words of others to suit your agenda.

    I certainly would not say that Labour got it right all the time when in office – but they also had to deal with a world wide financial crisis as Julian pointed out in the first line of his blog. I think that Cameron and Clegg have reneged on so many of their election promises and tried to blame the ‘state of the country as left by Labour’ for these broken words. However last May Clegg & Cameron were very aware of the state of things globally and the joke note left by Liam Byrne being cited as ‘reality’ stretched the bounds of credibility.

    Arguing what class one is won’t get us much further – but can we agree that if one needs to work to pay the bills one is working class and if one lives from an unearned income one isn’t? On this dividing line there are more working class than non-working class. And in that working class category it is fair to say that the highest percentage will use the NHS, public services which include libraries and council services, state education, social services when in need etc. The non-working class highest percentage will use private schools and education and will probably not need to rely so heavily on social services like care homes for the elderly or home support for the elderly and disabled. Oh what a coincidence they are the very services that amongst others are being cut! And who needs woodlands to walk in when one owns a country estate?

    Having a mortgage is not always a luxury btw – with formerly ‘secure’ jobs being cut left right and centre many find their homes at risk. It is not easy to change areas to find a new job if a home cannot be sold – or has a sale value many thousands below the mortgage due on it.

    I think I understand WhoyouwillChoose but don’t say I didn’t warn you!

  10. WhotoChoose says:

    Elizannie
    This is why I really get wound up by politicians I think you will be suprised about Who I will choose, incidentally I am one of those bankers that you and all politicians like to bash. But for the record I do not get those massive bonuses that people seem to associate with us. By the way I also use libraries, the NHS have relatives that have to get into care homes etc but for the record the services were rubbish before any cuts. What makes me angry is that the people that alledegedly run the country ( and I talking about all parties now) sit by and let things run away with them. So we get to the situation where Salt Water cost £540, You cannot get to see a doctor becuase they have targets to meet, hospital wards are not cleaned,schools become obbsessed with manipulating figures so that they get good results. By the way I went to local schools and the local sixth form I chose not to go to university and got a job and raise a family and have a social conscience. Oh and by the way I have always been in a situation where your job is not safe unfortunatley that is called the real world. Jobs for life do not exist as there is a cost to someone in maintaining it either in losses to the company or increased taxes to the taxpayer.
    I believe I represent the majority that want this country run effectively by people that we can trust and at the moment I do not trust any politician they are all after feathering their own nests and clinging to power.

  11. ToryPier says:

    Who was it that said:

    “Then we had a terrible month of weather which hindered transport and communications in business in the country.Obviously it has been a difficult few months. But that just shows just how fragile the recovery is.”

    Yep, Gordon Brown in April 2010 when the economic figures didn’t look quite as rosy. So in answer to your question, yes it did snow.

    http://www.politics.co.uk/news/economy-and-finance/brown-blames-weather-for-growth-slowdown-$1373558.htm#

    I know many Labour supporters are delighted to see these negative growth figures, particularly Ed Balls who couldn’t stop smiling yesterday, but we have to give the economy time to rebalance. Manufacturing figures are still looking strong and many businesses in the City are regaining their confidence and hiring again. Good signs, but there’s still plenty of work to do.

  12. I have not met a single Labour or supporter who takes delight in our economic plight. I certainly take no joy from the fact that my job is now a little less secure, or that my salary does not go as far as it used to. I would like to see some evidence backing up your assertion.

    It is telling that the quarter’s figures that you link to was still a quarter that eventually showed 0.3% growth. So whilst it snowed on our watch, and whilst this dampened the economic figures, it was still positive.

  13. WhotoChoose says:

    Julian
    As you said the figures were revised by the ONS to show growth. the figures published yesterday were preliminary and are subjec tto revision so it is entirely possible that the numbers will be revised. The ONS also did point out that there were some areas of growth. So there is still time or hope but guess what obviously politicans think we are stupid so use the parts of the reprot that garner the best headlines for them. Just treat the electorate with a bit of respect and tell them as it really is then they would respect politicians.

  14. WhotoChoose says:

    Thought this might interest you all. A fair assessment of why snow may be to blame.

    The chancellor has blamed bad weather for a shock contraction in the UK economy, but how can snow have such a dramatic effect?

    Tuesday’s official figures showed that the economy had taken quite a hit from the snow at the end of 2010.

    Last year, it was discussed whether snow might actually be good for the economy. Why has it been so bad this time round?

    That winter there was much talk of snow effects, but little sign of permanent impact on the official figures.

    The figures on the construction sector, for example, showed it had a very difficult time in the first three months of 2010, which could be partly blamed on the weather, but then recovered extremely strongly in the following three months as builders caught up on delayed projects.

    It is important to distinguish between a genuine dead loss for the economy and spending that is just being delayed.
    Graph showing growth by sector

    The snow this winter appears to have had a greater effect than last winter.

    Once again, the construction sector has taken a hit, which we can probably expect to be made up in 2011.

    But other areas may not be made up. Last week’s retail sales figures showed a fall of more than 10% in sales at petrol stations in December, which reflects people leaving their cars at home as a result of difficult driving conditions.

    Lots of people could not get into work as a result of the snow, but not all of them cost the economy anything.

    Some freelance or casual workers will not have been paid for the days they did not work, and cafes, restaurants, taxi drivers and train operators will not make back all of the money that they lost as a result of people staying at home.

    Some people work in sectors where a missed day cannot be made up with a bit of overtime or slightly delayed deliveries, but if you are a hairdresser, for example, then the people who were going to come in for a trim but cancelled because of snow are pretty likely to make another appointment.

    It is also important not to forget the gains to the economy from snow. Utility companies had a bumper December as people were forced to turn up their heating to cope with the coldest December on record.

    Also, last week’s retail sales figures showed significant growth in sales of winter clothing.

    Halfords announced in a trading statement that its sales of car maintenance products had risen.
    Bad timing

    The big difference between this winter’s snow and last winter’s snow was the timing.

    Several big shopping centres were forced to close in the weekend before Christmas, meaning that some people did not get their gifts until January, if at all.
    Snow on tables outside a closed cafe Cafes and restaurants were among the businesses worst hit by the weather

    This is the crucial point. If you were planning to go out in the first week in December to buy a drill and actually you had to go and buy it in the second week, the economy would barely bat an eyelid.

    But if you were going to buy it on 23 December and instead had to buy it on 27 December, it is a big deal.

    The difference to the economy of having buying sprees at full-price pre-Christmas and at cut-price in the sales is significant and will not be made up later in the year.

    Also, many people will have been planning pre-Christmas drinks and meals with friends and colleagues, which will have been cancelled or delayed.

    Even the part of the Office for National Statistics (ONS) that calculates the official growth figures for the economy had to postpone its Christmas party because of the weather, and will not be holding it until April.

    Last winter, the snow was timed much more favourably, coming mainly in January.

    This year’s Christmas trading statements from big retailers were full of comments about the weather.

    The boss of Tesco said that its performance had been “hindered” by the “disruptive effects of the severe winter weather conditions”, while Dixons said: “The adverse weather conditions reduced footfall in the run up to Christmas day.”

    So while last year it could be argued that in the medium term the snow had not done the economy much harm, this year the effect has been much more damaging. from the BBC.

    “The ONS said that the snow had knocked 0.5% off the economic growth figures, which is a considerable amount of lost growth.

    Some of that will be made back, perhaps by the construction sector as happened last time, and perhaps by bumper January sales shopping and delayed parties, but a significant proportion of it is probably lost to the economy for ever.”

  15. You could have just posted a link rather than pasting the whole article : http://www.bbc.co.uk/news/magazine-12285575

  16. No doubt the Osborne apologists will be working away on their excuses for the predicted rise in inflation – http://www.bbc.co.uk/blogs/thereporters/stephanieflanders/2011/01/mervyn_king_ne_regrette_rien.html

  17. WhotoChoose says:

    Yes again missing the point of how long Mervyn King said that the value of my wages have decresed 6 years I believe he said we can all do the maths.

  18. Elizannie says:

    @WhoToChoose
    I hope you don’t mind me saying you sound rather a nihilst to me in that you say ‘at the moment I do not trust any politician they are all after feathering their own nests and clinging to power’. This sort of blanket statement really annoys me because it is an excuse not to vote and thus take any responsibility for making a wrong or mistaken choice…

    In this country we have the freedom of democracy. With that freedom comes responsibility – the responsibility to make a decision and if it is a wrong decision change it or lobby our representatives to change their decisions. The latter is something I do regularly!

    I find your statement ‘I went to local schools and the local sixth form I chose not to go to university and got a job and raise a family and have a social conscience.’ rather confusing. I made most of the same decisions and in fact took my degree as a mature student and paid for it by working at the same time – a very difficult thing to do and thus I don’t want students of today to have to do the same thing. Are you saying if someone goes to university they do not have a social conscience? – I am sure this is not what you mean. I think you mean that one does not have to go to university to have a social conscience. This is of course true as I have been lobbying and marching since I was at school!

    ‘You cannot get to see a doctor becuase they have targets to meet, hospital wards are not cleaned,schools become obbsessed with manipulating figures so that they get good results.’
    I am not going to get into ‘yah boo’ arguments here but I think you will find that a lot of the ‘targets’ and ‘league tables’ culture started in the early and mid-90s and I for one was disappointed that the Labour government did not do away with them completely. But the present reforms do not solve those problems and indeed in the opinion of many of us will make things much worse.

    I must say this in defence [as if it were necessary!] of the NHS. I had an operation in a private hospital some years ago [no I am not perfect and I am making no excuse] Things went disatrously wrong and as private hospitals by and large do not have any emergency/ intensive care facilities I had to have my life saved not once but twice by specialists at the nearby NHS hospital. Even if I wanted no private hospital would admit me now in case the same thing happened again so when the Health Minister talks about ‘patient choice’ it is like the privatisation of bus services – only the profitable, easy cases/routes will be catered for.

  19. WhotoChoose says:

    Elizannie

    Let me assure you I do vote and I take a long time to decide who to vote for hence the name but at this point in time all I see are politicians at all levels more interested in serving themselves rather than the electorate.
    Yes I agree my comment on education was a bit confusing, however I am fed up of people telling me that going to university is a right and will always lead to a better job. This is wrong and as I have said in previous posts there are alternatives to the current situation.

    I appreciate that Labour did not introduce the concept of league tables but they did not then have to increase their use and make them the focus of everyones attention.

    For the record the I fully believe in the NHS but it is bloated and inefficient not in the front line perhaps and I have had nothing but positive experiences in this. But in the bueracratic layers and the ridiculous waste of money that has been made by many previous governments that has made it a laughing stock in other countries. If we could remove the waste then the perceived need for a private sector would be removed. Dont forget by the way that PFI was Gordons.

  20. Elizannie says:

    WhotoChoose:
    Fair enough on the PFI comment but I will take you up on the NHs being a laughing stock in other countries. I have lived abroad and I know this is untrue. There is just as much bureaucracy in private systems here and abroad, unfortunately. I agree that is something that has to be tackled but privatisation is not the way.

    As for university education being a right – well I will totally disagree with this. It should be a right if one has the educational ability to get a place and should have nothing to do with one’s ability to pay. Whether or not certain courses are deemed ‘suitable’ is another discussion. Many graduates do not ‘use’ the subject in which they have graduated for a future job but what they do use is the research and other skills they have gained in their future employment[s] which is why employers are keen to employ graduates. I used the subjects in which I graduated in teaching and now that I am retired I still use a lot of the skills etc in researchm for example.

    A ‘better job’ is of course a matter of individual definition. A degree does not necessarily guarantee a job with more money or even security of employment. But it could mean finding a job [for them] with more job satisfaction. Sadly many graduates today are finding it difficult to find employment, just as many without degrees are finding the same thing.

  21. WhotoChoose says:

    Unfortunaley we cannot afford to provide a free university education but what we can do is make sure that those that use their education to benefit primarily themselves by entering the private sector rather that the publice sector are suitabily taxed to ensure that there is money to support future generations of graduates. If someone chooses to use their degree for the publice good then they should be in effect rewarded. Also organisations that insist that they need a graduate should be levied so that they seriously consider if this is really the case. Harsh I am sure you will think but fair yes I believe so I have seen it myself where graduates are employed purely becasue they are graduates rather than an ability to perform the job required. I understand the idea of research and other skills but too often the skilss that are really required are common sense and an ability to think on oyur feet something that I am afraid a lot of gradautes do not learn at university.

  22. Elizannie says:

    WhotoChoose:
    I would disagree with your last comment but that sort of discussion could go on all night!

    Surely to an extent someone with a degree who goes into the private sector for employment and receives a higher wage than a similarly qualified public sector employee will ‘repay’ the investment of the taxpayer in his/her education by paying more taxes on those higher wages and tax on those goods and services purchased by their presumably higher income?

    I would also like to comment that we cannot afford not to provide ‘free’ university education – because where and how will all our future teachers, medical staff, scientists, social service workers etc etc get their training and education. One area where we are enormously lacking in further education – and I am sure Julian will agree with me here – is in engineering and our large industries are feeling the effect of this at the moment.

  23. WhotoChoose says:

    Elizannie
    You are right we could go on all night. I hink my closing remarks would be and I know we will probably not see eye to eye is that instead of putting all the responsibility to fund courses on the student and state the private sector should contribute how this is done is open for discussion there are probably many ways. I think the issue is fairness and how you effectivley ensure that university students that have in efect been given extra assistance in there career make a fair contribution to that advantage and at the same time we find a way to enusre tha tUniversity education is avaialble where it is needed. On the issue of training for teachers etc for some teachers and also medical staff the old way of doing it could be reintorduced ie Teacher Training Colleges, Hospital based training the need for a degree in some of these cases is really not a requriement there needs to be some shake up here.

    It was good to have a decent discussion with someone.

  24. I think a post on education is a overdue, but since this conversation has gone down that route I will give you one thought. It is my opinion that education in and of itself is a good thing, regardless of what career opportunities may arise from that education. An educated country is a better country. Because of this I will always aspire to 100% of people going into further education, and I would wish that a greater proportion of the cost be borne out of general taxation.

  25. Elizannie says:

    Thanks both. I do love a good discussion! ‘An educated country is a better country’ – great slogan, Julian!

  26. Rob Brown says:

    I do not like the growth figures or the effects on small businesses and families but I am getting some cmfort watching these Tories squirm.

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