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Growth estimate: Slowly does it

Stephanie Flanders | 10:31 UK time, Friday, 23 April 2010

Once again, many in the City will be scratching their heads at the first estimate of growth in the first three months of this year from the Office for National Statistics (ONS). Most City economists thought it would be a bit larger.

WelderHowever, the gap between the City and the ONS is not as large as it has been in recent quarters - on the order of two tenths of a percent. And this time there are at least good reasons why the recovery might have lost a bit of momentum at the start of the year.

We already knew that the bad weather in January had hit some parts of the economy quite hard, especially services. On the coldest days, there were millions of people who couldn't get to work, and even the restaurants and shops that stayed open were usually empty.

This is borne out by today's early numbers, which show the distribution, hotels and restaurants sector shrank by 0.7% in the first quarter, after an impressive 1.9% rise in the previous three months.

That's the worst performance for that part of the economy since the start of 2009, in the depths of the recession - and rather worse than the leading business surveys had indicated.

But the bad weather makes it hard to judge which is right - and there is that other "special" factor to consider, the increase in VAT back up to 17.5%. We knew that might pull down the figures in the consumer side of the economy in these months as well.

What many will find most cheering in these numbers is the impressive 0.7% estimate for growth in the production sector, up from 0.4% in the last quarter of 2009.

That's the strongest quarterly performance for that part of the economy in 4 years. It owes a lot to a sharp jump in output in the utility sector, which will probably be a one-off. There is also another sharp decline in construction output buried in that headline figure.

But manufacturing also did well, continuing almost the same pace of growth as in the fourth quarter of last year. Hopes of an export-led recovery are not dashed yet.

Many will expect some upward revision in this number - if not in the next couple of months then in a year or two's time, when the ONS has 100% of the relevant data to go on - not just 40%. Remember that controversial 0.1% estimate for the final quarter of 2009 has now gone up to 0.4%.

Though disappointing, the 0.2% figure is not dramatically out of line with the popular experience of this recovery so far. We know this is a modest upturn, and the economy has yet to truly find its feet. What we don't know is what this mediocre number will mean for the campaign.

Update, 14:52: A couple of points to add about the GDP figures. It's worth noting that yesterday's retail sales figures gave a hint of the difference the bad weather made to some sectors.

In the first quarter of 2010, petrol sales fell by an astonishing 14.9% on the previous three months. (Thanks to Simon Hayes, of Barclays Capital, for pointing this out.)

If you can't drive anywhere, you don't need petrol. "Core" retail sales - excluding food and petrol - rose by 0.1% in the first three months of 2010.

Also - on the prospects for an export-led recovery, there were some positive signs from the eurozone today. Mervyn King and other have previously worried about a weak eurozone recovery putting the brakes on ours, because the rest of Europe buys more than half of our exports (see my post Weighing the risks).

The European recovery seemed to stumble at the end of 2009, but all the signs are now that growth is picking up.

Eurostat announced today that industrial new orders rose by 1.5% in the euro area in February, after falling by 1.6% the previous month. Excluding volatile sectors like ships and aerospace, the rise was 2.5%.

In Germany, the leading indicator of business confidence, the Ifo Index, has risen by much more than expected this month, to its highest level since May 2008. On current form, the economy could be looking at growth in the first quarter of more than 1.5%.

So countries like Germany are growing again. That is the good news. The bad news is that a good part of that new momentum is likely to have come from in the export sectors, thanks to the fall in the euro.

That's been a welcome side-effect, for German exporters, of the unfolding tragedy of Greece (see today's other post). I note that the Ifo Index for just the retail trade actually fell in April - albeit by much less than previous months.

Like Greece and other countries on the eurozone's hard-pressed periphery, Britain needs a big rise in domestic demand in Germany and other major European economies over the next year or two. It's not obvious that we will get it.

Comments

  • Comment number 1.

    Ok, so it's not negative. Great. How much does it have to grow however to be able to start to repay our borrowing deficit - 5% agregate from 2008? It needs to start growing rapidly, or we're saying we've got 10 years plus of hard times.

    As I've said before, we can't cut our way out of this deficit, we need ecomonise, but grow at the same time. The cutting bit looks easy, growth escapes us.

  • Comment number 2.

    If this is a recovery then what we need is a boom. We have just gone through a period if unprecedented public spending and QE. Without both the truth would be out that we are still in recession. The same can be said of many of our EU colleagues but none can match us on our ballooning debt with the exception being the PIIGS's.

  • Comment number 3.

    A few ways for Brown to spin those Q1 GDP figures:

    The debt is growing 55 times faster than the economy - 11% versus 0.2%

    The annual growth of the debt in pounds terms is higher than that of GDP in pounds terms - 165 billion versus 3 billion

    The weekly growth of the debt in pounds terms is equal to the annual growth of GDP in pounds terms - 3 billion for both

    The daily growth of the debt in pounds terms is one-seventh of the annual growth of GDP in pounds terms - 428 million versus 3 billion

    Have a good WE!

  • Comment number 4.

    The FT reported

    Gordon Brown’s claim to have played a significant role in warding off the global financial crisis is not backed by most people in the major European Union nations, few of whom believe he has had a positive impact.

    So is this the end of superman..............

  • Comment number 5.

    Perhaps you should explain to us the effect of govt. continually understating true inflation figures has on sustaining these minimal growth figures in our economy?

  • Comment number 6.

    I don't believe the economy has grown any more that I believe crime has reduced. Caledonian Comment

  • Comment number 7.

    Hi Steph,

    No head scratching needed. It's a zombie economy propped up by Keynesian madness.

    At some point the Government will run out of other people's money and the creative destruction that should have occured after the bubble burst will happen.

    People in the city who are head scratching are quite simply stupid or delusional.

    And, by the way, do you like the semi inverted Yield Curve on Greek Bonds? That's a new one for the text book. The Eurostat figures out this week place the UK in 3rd place in terms of borrowing behind Greece and Ireland. And that is presumably without Gordon's creative accounting being taken into account.

    Not a good election to win perhaps.

  • Comment number 8.

    #2 Exactly..... The Irish cuts in public spending indicate what we can expect after the election.

    We may not BE Ireland for sure...but we are not that far off,

    We borrowed £23 Billion in March...... after borrowing for the first time in january (the month of max tax receipts usually)these numbers aren't numbers that are coming right by themselves.

    There always seems to be special reasons why things are a 'bit disappointing' but hardly ever the same caveats when data arrives that is suprisingly optimistic -----

    Two questions for others to answer please

    IS a 2.7% uplift for utilities a good component of a nascent recovery---or just a 'tax' on everyone in the country by energy companies profiteering? Can we or do we strip out their domestic profits from their export profits?

    IS a 0.2% increase in GDP an increase if inflation is running at a higher rate than that?

  • Comment number 9.

    What recovery - its nonsense!

    >>>>>>>>>>>>
    Though disappointing, the 0.2% figure is not dramatically out of line with the popular experience of this recovery so far. We know this is a modest upturn, and the economy has yet to truly find its feet. What we don't know is what this mediocre number will mean for the campaign.
    >>>>>>>>>>>>>>>

    What it will mean is yet more lies and statistical nonsense

    The UK is in depression:

    fiddle diddle GDP unadjusted for inflation and GBP currency movement?
    Fiddle diddle Inflation
    Fiddle diddle QE

    Monkey-nomics? Chimpenomics? Is all Labour government monkey business.

    There is no recovery - the UK is in depression with a handful of non-dom investor businesses capitalising on supply chain businesses with a UK base sending most of their money overseas but still showing in British GDP?

    1 in 200 Brits with a significant benefit from EU membership (199 without a significant benefit of EU membership?)
    15-20 million adult Brits of working age without a real job and are really struggling?

    The 'Great British Slide'!

  • Comment number 10.

    Pacific Investment Management Co., (PIMCO) the world’s largest bond-debt manager, is advising investors to steer clear of UK, US, EU and Japanese debt, telling them to invest in developing nations like Russia and Egypt instead.

    Why? Because the IMF reckons the developing world is growing three times faster this year than the developed and heavily indebted west/Japan.

    What do we do if we cannot roll over our debt because there are no buyers? The country would be literally bankrupt.

    Making immediate cuts of £167 billion just to balance the books would cut the throat of the economy. Printing the money is merely delaying and deepening the reckoning. Which leaves the IMF.

    Interestingly, the IMF recently voted to increase its war chest from $50 billion to $550 billion. Do they think trouble is brewing...?

    What's more, they are going to the developing economies for contributions, as the normal contributers in the West cannot stump up the funds.

    The amount a country contributes to the IMF determines how much say they have in how the money is spent. Will China/Russia etc willingly lend money through the IMF to the UK/US/EU if they have already decided not buy bonds? Who knows.

    Its hypothetical anyway as $550 billion -although an eleven-fold increase in funding - is chicken feed compared to the size of the economies under threat.

    So what is left in our arsenal? 0.2% growth... Or 0.6% over the last six months. Assuming that average holds for the next six months (rather than following its current downward trajectory) that gives aggregate growth of 1.2%. Not quite up to the 3.5% growth needed to cut the sum we go deeper into debt by each year from £167 billion to £75 billion, let alone the massive boom we need to actually start reducing our debt.

    I don't know why I'm worrying though. Our glorious leaders hardly ever mention the national debt so I'm probably making mountains out of molehills. Or is it the other way round?

  • Comment number 11.

    Growth? - what growth?

    "Most City economists thought it would be a bit larger."

    You mean hoped it would be a bit larger.

    We measure our 'growth' in monetary terms (GDP)

    Over the last year we printed (made up) 7% of our previous years GDP and injected it into the system (QE).

    So why do we think that the 0.4% and the 0.2% 'growth in GDP' has anything to do with production growth?

    Can we have an answer to this please? It seems a simple one to clear up for any would be Economics editor.

    This is pure QE 'growth' and if you look at the numbers, we have added 7% through QE over a year, which has resulted in a half year growth (2 quarters) of 0.6% - isn't that a massive decline in real growth overall?

    ...and I'm not even factoring in the low interest rates - which is effectively printing money (as the banks are able to buy Gilts that pay 4% but borrow on the LIBOR at 0.6%)

    This is a question continuously ignored by journalists. Instead you like to dribble on about the growth figures.

    It's like Ronaldo scoring a brilliant goal in a 6-1 defeat and everyone talking about it like it's had any effect whatsoever on the result.

    Fantasist - the whole thing is run by fantasits.

    Don't worry - I'm sure they will 'revise' this figure upwards at some point to make everyone feel safe again.

  • Comment number 12.

    Amazing how many pessimists appear on this blog, stil in denial that there is a recovery under way.
    The best proof that the UK economy has now been growing consistently for at least 6 months are the increased tax revenues, which as you mention Stephanie, have led to the deficit for 2009-10 to be revised down again.
    If this 0.2% figure provisionial growth estimate is accurate, the UK has grown approx 0.6% in the last 6 months, an annualized rate of 1.2% - and a better performane than most of the Eurozone. This is in line with the Treasury forecast for 2010. Predictions for 3% growth in 2011 look realistic given that the economy rebounded in a similair way after the 80s and 90s recessions. That is what will get the deficit down.

  • Comment number 13.

    Good news for Gordon Brown.

    The electorate look to him as best choice for managing a fragile recovery.

  • Comment number 14.

    So Greece has bitten the bullet and asked for the cash. Now we will see the Euro zone countries squirm..... How much and for how long are the two questions the markets will want to know.

  • Comment number 15.

    +0.2% down from +0.4% last quarter puts us on track for the double-dip recession that I and many others expect.

    The only thing that got us out of recession was unsustainable government spending replacing unsustainable consumer borrowing.

    Once that is withdrawn we will go back into recession until we find a SUSTAINABLE level of economic activity.

  • Comment number 16.

    There is some balanced thought there Stephanie.

    However, can this really be referred to as a 'recovery', or is it merely just a situation? There are too many global factors nowadays which will plot the course of the UK economically. So use of the 'recovery' word in my view is irrelevant and meaningless, because what exactly are we going to recover?

  • Comment number 17.

    City economists scratching their heads? The sound made by agitating all those empty vessels must be deafening!

    Time for the Government to ditch Mandelson's idiotically trite "Going for Growth" report and dig out the Sustainable Development Commission's "Prosperity without Growth" (which it did its best to bury last year).

    That's the only kind of prosperity we're likely to get since Labour maxed out the UK's collective credit card on behalf of its rich and powerful pals.

  • Comment number 18.

    I wish Ms Flanders would not use the word "stonking". I am and was minded to ignore the rest of article on coming across this.

  • Comment number 19.

    'Many will expect some upward revision in this number - if not in the next couple of months then in a year or two's time, when the ONS has 100% of the relevant data to go on - not just 40%. Remember that controversial 0.1% estimate for the final quarter of 2009 has now gone up to 0.4%.'

    I seem to remember that the only reason that the growth figure went up from 0.1 to 0.4 in the last quarter of last year was because the third quarter was revised down even further - the absolute GDP performance in the fourth quarter did not change that much.

    It was just more better than an even worse previous quarter.

    Lies, damned lies and statistics.

  • Comment number 20.

    12. At 11:21am on 23 Apr 2010, chrisbastille wrote:

    "Amazing how many pessimists appear on this blog, stil in denial that there is a recovery under way. "

    Our GDP is x - we print an extra 7% and add it to the Economy - we grow by 1.2% (your figures annualised)

    Explain how this is tangible growth please and not merely an increase in the money supply?

  • Comment number 21.

    15. At 11:29am on 23 Apr 2010, Scott wrote:

    "The only thing that got us out of recession was unsustainable government spending replacing unsustainable consumer borrowing."

    Excellent - and very, very true.

    "Once that is withdrawn we will go back into recession until we find a SUSTAINABLE level of economic activity."

    100% correct - it's a shame nobody in finance, business, Government or the media is able to see of understand this.

    Well I guess you and I must just be dumb then Scott - I guess we'd better go back to our turnip eating with the other peasants.

  • Comment number 22.

    10 Arn.the.Peng

    Hey Mr Penguin,

    And did you notice in the new bailout funds allocated to the IMF, that Greece is contributing around an extra $2 Billion!

    I guess that's to bail itself out!

    It's Pythonesque.

  • Comment number 23.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 24.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 25.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 26.

    The cuts that have already taken place will inhibit growth. A price will have to be paid for the better than expected borrowing figures.

    Although they no longer are prepared to say so, the main political leaders and their backers still seem to believe that "this is a price worth paying"

  • Comment number 27.

    #2
    " The same can be said of many of our EU colleagues but none can match us on our ballooning debt with the exception being the PIIGS's."

    =====================================================================

    Only Greece has a comparable deficit to the UK, the others are relatively healthy.

  • Comment number 28.

    Why have the doom and gloom predictions been so wrong?
    David Cameron is in real danger of being like President Jimmy Carter in his Leaders' debates with Ronald Reagan : full of pessimism.
    Growth estimates for this quarter are on track to produce growth this year at about the average for 1950 onwards. OK. That's below the average of the last decade, but will still be ahead of Euroland and Japan.
    Pessimism has never been so political.

  • Comment number 29.

    Steph,

    If this is a recovery I'd hate to see what bouncing along the bottom looks like.

    Some questions for the bloggers:

    What is the error margin on the RPI inflation figure?

    How do you reverse a £200 Billion deficit with 1.2% growth without going back into recession?

    Will the words 'depression' and 'stagflation' finally be said after the election?

  • Comment number 30.

    #9
    "1 in 200 Brits with a significant benefit from EU membership (199 without a significant benefit of EU membership?)
    15-20 million adult Brits of working age without a real job and are really struggling?"

    =======================================================================

    Where do you get these numbers from - the U(seless)K(nowledge)I(nformation)P(ack).

    The 8 million or so economically unemployed have always been with us. For example they include house wives, and were greater in number 30 to 40 years ago. There is no evidence to suggest they want work and cannot get work - the definition of being unemployed.

    As for the 1 in 200 figure can you quote an unbiased source. The true figure is probably 199 in 200.

  • Comment number 31.

    Stephanie,
    Surely the reliance on GDP as a measure of how we are coping with our deficit and growing national debt is irrelevant, since the definition of GDP includes many things which have no influence on the deficit. For example, the fact that restuarant taking were down would only affect the deficit if the customers were all visitors to this country. What we do with our money sipmly keeps circulation going but does not affect the deficit unless we keep buying imported "stuff". Also if the utilities did spectacularly well, might that not also have had to do with the exceptionally cold weather.
    As a nation we need our politicians to get real and face up to the appauling magnitude of the debt trail this government has lead us down. Even if we were able to reduce the deficit by half in four years, the national debt would rise to at least £16000 Bn in 2018, or nearly £30,000 per man woman and child in this country.
    I'm surprised that our government has not started telling us that we can reduce the debt per head by allowing more people into the country , such is their lack of understanding of this financial mess.

  • Comment number 32.

    #22
    "And did you notice in the new bailout funds allocated to the IMF, that Greece is contributing around an extra $2 Billion!"

    =====================================================================

    Presumably if you pay an insurance premium you never claim under the policy.

  • Comment number 33.

    This is either the peak of the W before we dip again or the start of a very long L with the economy bumping along the bottom makes Darling's growth projections look ever more ridiculous.

  • Comment number 34.

    "What many will find most cheering in these numbers is the stonking 0.7% estimate for growth in the production sector, up from 0.4% in the last quarter of 2009.

    That's the strongest quarterly performance for that part of the economy in 4 years. It owes a lot to a sharp jump in output in the utility sector, which will probably be a one-off. "


    Strongest performance?
    So the highest actual output in real terms?

    or merely the highest percentage increase from a reduced base?

  • Comment number 35.

    The Growth figure will probably be revised up. However, this does not detract from the fact that the government is running a ponzi scheme in my opinion. Too much cheap money making a few people VERY rich will not save us. We're climing the hill and when we get to the top we're all going over the edge.

    There is nothing that can save us from depression. Japan here we come.

    In the same way that the warm up happened from Oct 2007 to Mar 2009, so we're going to have it again. This time it'll be much much worse.

    The most dissapointing thing about all this is that the government honestly thinks it can reflate by creating an even bigger bubble. This is a recipe for disaster. Mr Brown is conning the UK population. Nothing has improved.

    The sad thing is that we should all have been given £20k specifically to pay off debt. That way, the banks would have been recapitalised and the people of Britain would have gone out and spent. Instead, a very small handful of people are doing OBSCENELY well at UK tax payers expense!

    Instead the money the government has used to recapitalise the banks has been used to prop up the economy, luring people into a giant false sense of security.

    This government and their masters need to be brought to account and prosecuted for this. It reaaly is a case of JUNIOR SCHOOL economics and they are getting it VERY badly wrong.

  • Comment number 36.

    #13. Richard Dingle wrote:

    "Good news for Gordon Brown.

    The electorate look to him as best choice for managing a fragile recovery."

    Bizarrely this seems to be true, despite Brown's economic record being primarily one of failure and moving targets so underachievement can be defined as "success".
    A triumph of spin, rewriting history, over the facts.

  • Comment number 37.

    13. At 11:29am on 23 Apr 2010, Richard Dingle wrote:
    Good news for Gordon Brown.

    Is it? You seem to be suffering from a sort of Stockholm Syndrome when it comes to labour and GB. It doesn't matter how big the mistakes (gold, boom & bust, a decade of tax & waste, manufacturing jobs lost etc etc) you still think he is the best man for the job.

    0.2% despite record low interest rates out of control debt rising unemployment waek currency - not a record to be proud of.

    Get real Richard Gordon is finished.

  • Comment number 38.

    It shows that the recovery is real but not yet strong enough to be sustained if we start slashing £6 billion of spending programmes now.

    We need the government to hold a steady course and balance the deficit gradually, not cut drastically and send us spiralling into another recession like the Tories suggest.

  • Comment number 39.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 40.

    "Surely the reliance on GDP as a measure of how we are coping with our deficit and growing national debt is irrelevant, since the definition of GDP includes many things which have no influence on the deficit. For example, the fact that restuarant taking were down would only affect the deficit if the customers were all visitors to this country. What we do with our money sipmly keeps circulation going but does not affect the deficit unless we keep buying imported "stuff". "

    I think you're confusing the balance of trade and the fiscal deficit.

    Lower restaurant example may impact the deficit through tax revenues, but as you say wouldn't be net earnings for the nation, merely a redistribution.

  • Comment number 41.

    further to #40 - indeed with imported produce, higher expenditure at restaurants could increase the trade deficit whilst providing additional tax revenues to reduce the fiscal deficit (although it would merely slow the rate of increase of the ever climbing debt).

  • Comment number 42.

    ...and here we have a large contributer to this 'growth'....

    http://www.telegraph.co.uk/finance/personalfinance/7619505/City-banker-bonuses-to-rise-to-7bn.html

    So the country is in a recession - but banks have had a 'bumper year'.

    These are the same banks who were on the brink of collapse aren't they? - what happened?

    It's illogical captain - the answer is in the bailout and the hidden bubble the banks are profitting from - the biggest bond bubble of them all.

    The current imbalance of sovereign debt to base rate is causing this anomolie - and the bankers keeps sucking the golden teat which the Government is kindly re-filling regularly with our future tax receipts.

    Thankfully the banks do not have any conscience - because if they did they might 'go easy' for a while and not laugh in the face of the hard working people of Britain (well the few that are left) - if they did then there would be a chance they would get away with this robbery.

    Alas - bankers are stupid - and just like Gus Gorman in Superman 3 after he 'collected all the dimes' from the pay packets - instead of laying low - they bought themselves a ferrari and drove it to work the next day!

    It's going to be a great day when these arrogant bankers have to face reality - for now I am content knowing their fate will be awful - even though their bravado can be a little irritating.

  • Comment number 43.

    28. At 12:22pm on 23 Apr 2010, leftie wrote:

    "Why have the doom and gloom predictions been so wrong?"

    They're not - you're just impatient. Rome wasn't destroyed in a day you know.

    This is not an action film, more like a slow drama.

  • Comment number 44.

    # 30. Richard Dingle wrote:

    "The 8 million or so economically unemployed have always been with us. For example they include house wives, and were greater in number 30 to 40 years ago. There is no evidence to suggest they want work and cannot get work - the definition of being unemployed."

    Which is the problem with limited and ever changing definitions.. e.g. how many students are trying to continue in education die to limited job opportunities?
    The issue of housewives is an interesting one, they could be considered as "econimcally active" if they were supporting a wage earning household.

    I would question your defintion of "unemployed" it may approach the official definition, but strictly it is just not employed, i.e. not in use; whether voluntarily or not.
    Your narrow definition would exclude even those who refuse to work because they feel they are better off on benefits from the figures.

  • Comment number 45.

    #36
    "Bizarrely this seems to be true, despite Brown's economic record being primarily one of failure and moving targets so underachievement can be defined as "success".
    A triumph of spin, rewriting history, over the facts."

    =====================================================================

    Or perhaps WeAreAllInitTogetha are not regarded as a serious alternative.

    The 'Big Society' idea is proving hard to explain let alone sell on the doorstep. Policies on the deficit have been muted and muddled.

    Have the Conservatives ever run a worse campaign.

    The Clegg factor, which will probably last until May 6, would not have happened without Cameron's push for a leadership debate. Clegg has now won one debate and drawn the second (which contained the most 'banana skins' in Europe and defence).

    Were there any 'wise heads' in the Party who whispered in Camerons ear 'be careful what you wish for'.

    Basically the Conservatives have not changed. They just want to win the election any which way and then set about attacking the public sector on ideological grounds using the 'big bad deficit will get us' excuse.

    A hung parliament with proper PR will be the best thing that could happen in a century. Bring it on.

  • Comment number 46.

    #37
    "you still think he is the best man for the job."

    =======================================================================

    Yes, without a shadow of a doubt, COMPARED TO THE COMPETITION.

    In 1945 the electorate dumped a grear war time leader - job done - and went for change.

    In 2010 the electorate will go for recovery then change in 2015 or sooner. They did the same in 1992, though I have to concede Kinnock was more a liability to Labour than Cameron is to the Conservatives.

    Obviously I am hoping for a hung parliament.


  • Comment number 47.

    #38
    "It shows that the recovery is real but not yet strong enough to be sustained if we start slashing £6 billion of spending programmes now.

    We need the government to hold a steady course and balance the deficit gradually, not cut drastically and send us spiralling into another recession like the Tories suggest."

    =======================================================================

    In a nutshell spot on.

  • Comment number 48.

    # 38. Voice_of_Reason wrote:
    "It shows that the recovery is real but not yet strong enough to be sustained if we start slashing £6 billion of spending programmes now."

    What a joke.

    Cutting unneccessary spending may cause a temporary blip in the GDP figures; but why would you keep spending money you don't have on things that give you little value?
    Its like continually increasing the limit on your maxed out credit card so you can live in the style you've become accustomed to while believing no day of reckoning will ever come.

    We were spending more than we could afford, via the public sector, even before the downturn.
    The excuse that we should avoid facing up to the situation and putting things right seems to be borne of fear of losing the support of state funded "client" voters than economic reality.
    Spending cuts reducing the money in the economy (which would also result from tax rises) might cause short term downturns, but it would seem to be much more beneficial for long term stability and counter some of the risks posed by loss of confidence / credibility nad increased interest rates.
    Do people really beleive Gordon Brown would make real cuts in the fututre to balance the books, rather than amending the definitions or finding some other excuse?


    The NI versus spending debate seems to be:
    either cut spending in the most wasteful areas of the public sector that provide least benefit or make employing people more expensive, reducing the incentive to employ / retain staff and damaging competitiveness.

    Studies of real world events are virtually unanimous that tackling a deficit by reducing spending does much less harm to growth than increasing taxation.

  • Comment number 49.

    37. At 12:37pm on 23 Apr 2010, StartAgain wrote:

    "Is it? You seem to be suffering from a sort of Stockholm Syndrome when it comes to labour and GB. It doesn't matter how big the mistakes (gold, boom & bust, a decade of tax & waste, manufacturing jobs lost etc etc) you still think he is the best man for the job. "

    Spot the Tory soundbyte folks!

    It's very clever how the Tory supporters are able to regurgitate their lines with such accuracy - I didn't think they had the ability to remember beyond 30 seconds ago..

  • Comment number 50.

    @Writingsonthewall
    'This is pure QE 'growth' and if you look at the numbers, we have added 7% through QE over a year, which has resulted in a half year growth (2 quarters) of 0.6%.' I agree. Where can I find these numbers?

  • Comment number 51.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 52.

    #30 Exactly - useless stats. In terms of employment I think the better stat is the percentage of the working population that is in fact in employment which is currently around 72%. Admittedly that is the govt own stat so please take it with all the caveats that normally apply to Govt statistics.

    72% employed is a low figure for the British economy.

    #21 WOTW I do not often agree with you but this comment is spot on. Sadly I suspect that GDP is being inflated by up to 10% to hide what a whole we are in. The difference between you and I is that I think we can get out of the whole but that it requires a left of cuts in public spending several times higher than any of the parties are prepared to discuss

  • Comment number 53.

    #15

    Very nicely stated.

    My take on all of this growth thing is if the government has no money to spend and the public cannot spend without going deeper into personal debt then how does anyone expect any significant growth to happen.

    The reality is growth just isn't going to happen and the best we can hope for is not too much shrinkage. The only reason we have had growth in the recent past is because people and governments spent money they did'nt have and has recent history shows, this can't go on.

  • Comment number 54.

    When are we going to see some cutting-edge economic journalism from the BBC?

    Two points no journalists even dare even mentioning, so far:

    1. The Neo-Feudalism (the reign of the banks) or The New Enslavement (debt slaves).
    2. Is there an alternative to money?

    Stephanie? Robert? Anyone? Are you real journalists or are you just having jobs to pay the mortgage?

  • Comment number 55.

    So, in summary

    Economic growth is anemic and fragile.

    Unemployment is high and rising.

    Inflation is above target and rising.

    The balance of trade deficit is large and in fact rose relentlessly throughout the Blair/Brown years right up until the recession.

    Government debt is high and rising very rapidly - even when we ignore the hidden PFI debt.

    In fact it's difficult to imagine a more favourable economic environment. We must be the envy of the world.

  • Comment number 56.

    re: #29. new blogger

    I can't see how we are going to get out of this without a bout of inflation. Not sure why most City commentators don't seem to get it but presumably it is because they are focusing solely on money supply data? It feels like another episode of not seeing the wood for the trees(which it appears City economists are quite prone to).

  • Comment number 57.

    #49
    "It's very clever how the Tory supporters are able to regurgitate their lines with such accuracy - I didn't think they had the ability to remember beyond 30 seconds ago.."

    ====================================================================

    They are not all goldfish.

    Some are sharks.

  • Comment number 58.

    #48
    "Cutting unneccessary spending"

    ====================================================================

    Some of this 'unneccessary spending' represents peoples jobs.

    A sharp spike in unemployment will do nothing for recovery.

  • Comment number 59.

    45. At 1:04pm on 23 Apr 2010, Richard Dingle
    'Have the Conservatives ever run a worse campaign.'

    No!

  • Comment number 60.

    48. At 1:13pm on 23 Apr 2010, Reaper_of_Souls wrote:

    "We were spending more than we could afford, via the public sector, even before the downturn."

    Oh really - so when we were spending less than 40% of our GDP - was this more than we can afford?

    Do you as a householder spend less than 40% of your annual income on 'home improvements'? - and if you do is this because they are seen as wasteful?

    I love those who complain about the public sector and ignore the banks crimes - hear no evil, see no evil.

    Sorry to come over 'all dempster' - but maybe you need reminding...


    Wages - mega
    Achievements - none
    Failures - near total economic collapse, mass unemployment, wasted resources.
    Cost to Britain - Astronomically high, so high we can't even calculate it properly. I thought billions were simply for star distances until 2 years ago!


    Wages - not mega
    Achievements - the delivery of health care, educaton, sanitary services etc. to the public and those who cannot afford it.
    Failures - have failed to reign in big chiefs salaries, employed too many private sector failed contracts, are inefficient in some areas.
    Cost to Britain - less than 40% of GDP - the Golden rule remember?

    Answers on a blog please.

  • Comment number 61.

    I think your analysis of the manufacturing performance is over-optimistic. You say "Manufacturing also did well, continuing almost the same pace of growth as in the fourth quarter of last year. Hopes of an export-led recovery are not dashed yet.

    The ONS press release says: "Manufacturing output increased 0.7 per cent, compared with an increase of 0.8 per cent in the previous quarter." So this is both a very small number and less than last time, albeit subject to revision.

    Also, exports are not just manufacturing (just as well for the trade balance). Services, including financial services, make a huge contribution to exports.

  • Comment number 62.

    49. At 1:15pm on 23 Apr 2010, writingsonthewall
    ' I didn't think they had the ability to remember beyond 30 seconds ago..'

    Certainly not beyond 13 years.

    A few weeks back I was content that I had made up my mind and would vote for my local LD candidate on the strength of him being a genuinely excellent parliamentarian, locally born, completely clean on expenses and with many years of service to the community before entering politics.

    Yesterday I saw the Conservative press. I am now certain that we must keep them out and will do what ever small part I can to make that happen. They have not changed at all.

  • Comment number 63.

    #42
    "It's going to be a great day when these arrogant bankers have to face reality - for now I am content knowing their fate will be awful - even though their bravado can be a little irritating."

    =======================================================================

    But we live in the age of Divine right of Bankers. Next they will probably have first pick when it comes to v****ns just like the nobility of old.

    "for now I am content knowing their fate will be awful"

    What have you in mind.

    Me, I look wistfully at precedents (1960s - 1970s) across the ditch in Germany. The [not allowed by moderators] were very good when it came to the application of justice. Though the confused amongst us would probably call it a tad extreme.

    Bankers have moved beyond the point where they enjoy ludicrous rewards for doing very little. They are now taking the mickey.

    Nothing wrong in knocking a few ideas around.

  • Comment number 64.

    50. At 1:40pm on 23 Apr 2010, Falkie wrote:

    "@Writingsonthewall
    'This is pure QE 'growth' and if you look at the numbers, we have added 7% through QE over a year, which has resulted in a half year growth (2 quarters) of 0.6%.' I agree. Where can I find these numbers?"

    QE = £200 Billion
    UK GDP 2008 - $2,645,593,000,000
    (world bank - wikipedia http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28nominal%29%29

    Don't forget to convert GDP from Dollars to pounds.

    Also it's a moving target - I originally used the 2009 IMF figure for GDP - which has been replaced with a worse 2009 value) - and the exchange rate changes, but these differences do not obscure the basics.

    The declining GDP's mean the £200bn QE is in fact becoming a greater proportion of GDP - around 14% - if you use the 2009 figure.

    To be fair this is possibly the year to use as this is when QE was run (2009) and I was being optimistic with my 2008 GDP figures - i.e. before the recession bit.

    It's not scientific, but it's clear to see this GDP growth is a complete fraud. A fact which seems to escape all those in the meeeeja and compounded by denial of politicians and bankers (the latter who are perfectly aware of this calculation)

    By rights, if we undertook QE in 'normal' circumstances - we should have expected to see GDP growth of between 7 and 15% - this shows how the Economy is really behaving - not the fake GDP growth banded about here.

    ...it's like me saying I can just beat Usain Bolt in the 100m - if I'm running on a travellator moving at 6 miles an hour!

  • Comment number 65.

    52. At 1:43pm on 23 Apr 2010, Justin150 wrote:

    "#21 WOTW I do not often agree with you but this comment is spot on. Sadly I suspect that GDP is being inflated by up to 10% to hide what a whole we are in. The difference between you and I is that I think we can get out of the whole but that it requires a left of cuts in public spending several times higher than any of the parties are prepared to discuss"

    Crikey - yesterday I agreed with RBS_Temp, and today I agree with Justin150.

    ....these are certainly momentous times...

    Although we disagree on solutions - we do agree that lying about the problem isn't going to make it go away.

    (..and I do think the solution will be public sector cuts - I just think it's unfair in light of the other revelations of the last 2 years - namely the revelation that this is not a meritocracy)

  • Comment number 66.

    55. At 2:03pm on 23 Apr 2010, hants_gw wrote:

    "In fact it's difficult to imagine a more favourable economic environment. We must be the envy of the world."

    Ah yes, as we stare out of our 'Economic mud hut' we can see other mud huts which are in more disrepair than our own - comfoting us in the knowledge that "we're not the worst".

    However soon a hurricane will come and blow all our huts away - and we shall be standing with the Japanese, the Americans, Southern Europe and the Irish - naked in a muddy field with only our tales of 'previous great wealth' to comfort us...

  • Comment number 67.

    I think the reason everyone (well the media) is concentrating on the cut of the leader's suits and the way they stand etc is that really--especially on the economy..there isn't either any difference in policy---or in their expectations of 'what needs to be done' and 'what will happen when cuts take place'.

    Everyone knows that being aggressive on TV looks bad (leave aside the actual content of the allegations as that is irrelevant---so there is only the cut of the suit, and bland, calming, nursery rhyme style debate left ---- none of which informs US in any way at all about the reality THEY clearly know is just around the corner.

    As for statistics -- I don't know what to think..... you feel even basically educated people know the difference between projections and predictions...and the various pitfalls in over simple readings of percentage comparisons ---so when journalists, politicans, pollsters and others begin editorialising on these without seemingly being aware of them--- we are left with either negligence or incompetence as the explanations--- or I suppose 'conspiracy', what other explanations are there?.

  • Comment number 68.

    59. At 2:17pm on 23 Apr 2010, Squarepeg wrote:

    "45. At 1:04pm on 23 Apr 2010, Richard Dingle
    'Have the Conservatives ever run a worse campaign.'

    No!"

    Come on - what about the Major campaign when Tory ministers (like Odious David Mellor) kept getting caught with their pants down?

    That was a pretty bad one - wasn't it?

    P.s. Moderators - "Odious David Mellor" is an opinion, and not yet a proven fact. However this is not libellous and therefore should be allowed (and besides - I can afford the legal battle with Mr Mellor)

  • Comment number 69.

    #59
    "45. At 1:04pm on 23 Apr 2010, Richard Dingle
    'Have the Conservatives ever run a worse campaign.'

    No!"

    ======================================================================

    Following on from this would you want them anywhere near government.

  • Comment number 70.

    #60
    "Bankers
    Wages - mega
    Achievements - none
    Failures - near total economic collapse, mass unemployment, wasted resources.
    Cost to Britain - Astronomically high, so high we can't even calculate it properly. I thought billions were simply for star distances until 2 years ago!"

    ======================================================================

    Something seriously wrong with the 'model'.

    If it is BROKE it needs FIXIN.

    We need proper legislation preceded by a debate as to what sort of banking sector we need to properly service the 'real economy'.

    All this talk about 'banks relocating elswhere' (Switzerland, Far East) is just scare mongering. The banks cannot take their customers with them and they won't be able to operate without a licence in this country no matter where they are based.

    Complete bunk to suggest a bank can relocate to a light regulation haven and still be allowed to do business with UK customers - they will lose business.

  • Comment number 71.

    #66
    "However soon a hurricane will come and blow all our huts away - and we shall be standing with the Japanese, the Americans, Southern Europe and the Irish - naked in a muddy field with only our tales of 'previous great wealth' to comfort us..."

    =======================================================================

    Not all bad then.

    At least we will not be alone. Will the ladies be naked too. :)

  • Comment number 72.

    59
    "45. At 1:04pm on 23 Apr 2010, Richard Dingle
    'Have the Conservatives ever run a worse campaign.'

    No!"

    ======================================================================

    Following on from this would you want them anywhere near government.

    %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%

    But you do, RD, don't you? I thought you wanted a hung parliament. So I guess your position is: I do not want Labour government but I would like a Labour government.
    Pretty consistent and well argued.

  • Comment number 73.

    #68
    "P.s. Moderators - "Odious David Mellor" is an opinion, and not yet a proven fact. However this is not libellous and therefore should be allowed (and besides - I can afford the legal battle with Mr Mellor)"

    =====================================================================

    You might face de feet on that one.

  • Comment number 74.

    30. At 12:26pm on 23 Apr 2010, Richard Dingle wrote:

    #9
    "1 in 200 Brits with a significant benefit from EU membership (199 without a significant benefit of EU membership?)
    15-20 million adult Brits of working age without a real job and are really struggling?"

    =======================================================================

    Where do you get these numbers from - the U(seless)K(nowledge)I(nformation)P(ack).

    The 8 million or so economically unemployed have always been with us. For example they include house wives, and were greater in number 30 to 40 years ago. There is no evidence to suggest they want work and cannot get work - the definition of being unemployed.

    As for the 1 in 200 figure can you quote an unbiased source. The true figure is probably 199 in 200.

    >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

    172. At 10:07pm on 18 Apr 2010, nautonier wrote:

    http://www.telegraph.co.uk/finance/jobs/4681832/Foreign-workers-share-of-job-market-almost-doubles-under-Labour-to-record-high.html

    The breakdown of British-born workers employed in Europe showed 65,300 worked in Germany and 36,100 in France. There were 41,800 in Spain and 28,200 in Holland.

    including millionaire eurocrat Kinnocks?

    >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

    Can you provide any figures?

  • Comment number 75.

    I see the GDP /'growth' post discussion was shut down early?

    Sweep under the carpet asap?

    Also, why do these eurocrat commies keep posing as liberal centrics - still ashamed to be a 'commie in disguise'?

  • Comment number 76.

    #72
    "But you do, RD, don't you? I thought you wanted a hung parliament. So I guess your position is: I do not want Labour government but I would like a Labour government.
    Pretty consistent and well argued."

    ======================================================================

    Now, now. Read my posts properly.

    I don't want a Conservative majority.

    I don't want a Labour majority.

    I do want PR (AV+) and a hung Parliament will probably give me that, though more so if it is with Labour as they have indicated they will bend on electoral reform; the Conservatives want to keep first past the post.

    As I posted previously we have to move away from ideological yo-yo politics; build the NHS up, run the NHS down, build the NHS up, etc.

    We want conscensus on the NHS, on a stakeholder Social Market Economy (just like they have in Germany), on our role in Europe and the world.

    There, not too hard to understand is it. Consistent and well argued.

    The market has already priced in a hung Parliament.

    http://www.guardian.co.uk/business/marketforceslive/2010/apr/22/currencies

  • Comment number 77.

    58. At 2:16pm on 23 Apr 2010, Richard Dingle wrote:
    #48
    "Cutting unneccessary spending"

    ====================================================================

    Some of this 'unneccessary spending' represents peoples jobs.

    A sharp spike in unemployment will do nothing for recovery.

    ====================================

    Correct on both counts but it is unavoidable - the choices are not unfortunately save some now to cut them later. All the parties recognise it, refer to it fleetingly and then rapidly move on to offering more free stuff we have not earned.

    The choice is some now and some later or none now and many many more later.

    I am afraid we are to pay the price of our over reliance on housing and finance as drivers of the economy, a political class that cannot resist giving us stuff even when we haven't earned it just to buy their time in the limelight and our own societal propensity to want something for nothing.

    We did try for a few years living with what we earned but it wasn't very pleasant - it meant the whole place was sliding backwards not even maintaining the status quo.

  • Comment number 78.

    #72
    "172. At 10:07pm on 18 Apr 2010, nautonier wrote:"

    =====================================================================

    To quote from the Telegraph article.

    http://www.telegraph.co.uk/finance/jobs/4681832/Foreign-workers-share-of-job-market-almost-doubles-under-Labour-to-record-high.html


    "Non-UK born workers now account for one in seven jobs after more than 1.8 million foreigners were added to the UK labour force over the last decade.

    Two thirds of those have come from outside the EU, making a mockery of the Government's claims that a cap on immigration will be ineffective because the majority of workers come from within the Union, taking advantage of free movement."


    Of 1.8 million workers only one third, 600000 came from the EU. These would have been EU citizens and legal to work here so what is the problem.

    I agree that the 1.2 million that did not come from the EU can only be justified if they took jobs that UK and EU workers did not want or were not qualified for. A lot of our hospitals could not function without nurses from Africa, for example.

    The international labour market is complex and if we had no economic migration either way it would cause economic problems for all of us.

    The reason why there are more EU workers over here than UK workers in the EU is down to the fact that EU workers in this country take fairly low grade work (fruit picking for example), whereas UK workers in the EU tend to be highly skilled (engineers for example). You will always find more Polish fruit pickers in Suffolk than you will find UK engineers in Germany. If you think about it is a compliment to the UK; engineers are rare, fruit pickers 10 a penny.

    The crux is whether these fruit pickers from other EU countries take jobs away from UK citizens. There is absolutely no evidence of that. There is plenty of evidence that without them our fruit would rot in the fields.

    I do agree that the Brown million number is suspect.

  • Comment number 79.

    49. At 1:15pm on 23 Apr 2010, writingsonthewall wrote:
    37. At 12:37pm on 23 Apr 2010, StartAgain wrote:

    "Is it? You seem to be suffering from a sort of Stockholm Syndrome when it comes to labour and GB. It doesn't matter how big the mistakes (gold, boom & bust, a decade of tax & waste, manufacturing jobs lost etc etc) you still think he is the best man for the job. "

    Spot the Tory soundbyte folks!

    Hmm - so anyone who dislikes Brown is a Tory that's about 70% of the population then - how come the Tories are doing so badly?

    I don't like Brown his record is bad and history will not treat him kindly - sadly some on here appear blinded by his incompetance, didn't think you were one of them. He doesn't deserve another term, and thankfully is not going to get one either.

  • Comment number 80.

    #77
    "Correct on both counts but it is unavoidable - the choices are not unfortunately save some now to cut them later. All the parties recognise it, refer to it fleetingly and then rapidly move on to offering more free stuff we have not earned.

    The choice is some now and some later or none now and many many more later."

    ======================================================================

    You are right but any attempt to correct the situation without due regard to fairness, in particular dealing with the banking class, will result in civil unrest on a scale not seen for centuries.

    Any attempt to deal with this unrest will very likely result in a Northern Ireland situation on the mainland.

    The banking crisis is the prime cause of the recession; the derivative fuelled casino banking that started in the USA. By this I am not ignoring the flaws in our human nature that leads to greed and an appetite for credit; the banks did not cause this greed but they sure exploited it as did our political class.

    We are stuck with our human nature. We need not be stuck with our banking class. We need an evaluation of 'what are banks for', how can they go back to 'servicing the real economy'. The argument that banks will relocate is bunk; they cannot take their customers with them and they will not be allowed (if it is done right) to service their UK customer base from abroad.

    Surely it is obvious that the situation we find ourselves in demands far more than just changing the personnel, it needs a new way of thinking.



  • Comment number 81.

    Just coming back to the GDP figures.

    I have not seen any mention of what GDP is. So here's a definition:

    GDP = private consumption + gross investment + government spending + (exports − imports)


    PLEASE NOTE THE BIT THAT SAYS 'GOVERNMENT SPENDING'.

    Now we know that this is reducing in future and will continue to do so due to less tax collection, less borrowing and therefore less spend.

    So forget the supposed teeny weeny posiive from today and ask yourself: How can we possibly hit 3%+ growth with reducing government spend given its currently 52% of overall GDP?

    I would be surprised if we don't experience several more negative quarters in the next 12 -18 months (and beyond).....

    I note manufacturing was up 'strongly' - however how much was this down to the big increase in car manufacturing that coincided with the end of the car scrappage scheme forward order book - any connection?

  • Comment number 82.


    43. At 12:56pm on 23 Apr 2010, writingsonthewall wrote:
    28. At 12:22pm on 23 Apr 2010, leftie wrote:

    "Why have the doom and gloom predictions been so wrong?"

    They're not - you're just impatient. Rome wasn't destroyed in a day you know.

    This is not an action film, more like a slow drama.

    Spot on - different timescale this time just don't utter the 'D' word. I thought that this stock market rally would have reversed by now and thaat GBP woulld have fallen further, guess I will just have to wait.

  • Comment number 83.

    #79
    "Hmm - so anyone who dislikes Brown is a Tory that's about 70% of the population then - how come the Tories are doing so badly?"

    ======================================================================

    Quite easy to answer. Pay attention.

    Brown is very unpopular even within his own party.

    However, he is still regarded by a substantial part of the electorate as being the best man for protecting the recovery.

    That also explains why the Tories are doing so badly.

    The only thing the Tories had going for them was the 'nice cheerful smell of change'.

    This has been stolen from them by Nick Clegg and the LibDems.

    Nick Clegg was put in the spotlight by Cameron's 'bright idea' - a Leaders Debate.

    Priceless.

  • Comment number 84.

    46. At 1:10pm on 23 Apr 2010, Richard Dingle wrote:
    #37
    "you still think he is the best man for the job."

    =======================================================================

    Yes, without a shadow of a doubt, COMPARED TO THE COMPETITION.

    In 1945 the electorate dumped a grear war time leader - job done - and went for change.

    In 2010 the electorate will go for recovery then change in 2015 or sooner. They did the same in 1992, though I have to concede Kinnock was more a liability to Labour than Cameron is to the Conservatives.

    Obviously I am hoping for a hung parliament.

    Fair enough an a reasonable analogy if I can contempalte Gordon being considered great even for a nanosecond. But under what scenarion can he staay on as PM - Clegg won't keep Brown - and the knives are already being sharpened within the Labour party for some serious bloodletting.

    I think you will get your hung parliment - unless voting booth nerves overcome new convertss to the LD's.

  • Comment number 85.

    The reason why the Tories aren't running away with it has several factors.

    Here's a few:
    1. There is a portion of the electorate who want proportional representation (without necessarily understanding the downside risks). A hung parliament is the nearest they're going to get to it at the moment so its a proxy action but possibly not in the national interest.

    2. The Tories would love to be more honest about the size of the cuts which will have to come in the next 5 years but they know (along with LibDems & Labour) that a chunk of voters will not want to hear the news even though these same voters are demanding transparency.

    If you're not sure on this - look at the uproar caused by them wanting to stop the future NI increase of £6 billion. £6 BILLION - for gods sake - its peanuts. What happened if they said £100 billion?

    3. Fear. Labour to their eternal damnation have stoked fear over debt and the future - don't change they say. Seductive. People when scared don't always want change. Take your evidence from any major organisation change.....unfortunately with this attitude we'd still be living in caves (WOTW may say we're on our way back there!)

    4. There's been a marked shift to left-leaning values over the past 13 years (naturally I guess) that the electorate haven't necessarily grasped with an economy that is more state-owned than privately owned and the implications for that. This currently doesn't provide a natural environment for the Tories to argue. If you're not sure just look at the some of the arrogant, condescending and silly anti-business comment you get on here.

    5. A significant chunk of ill-informed people are in denial as are some of the contributors on here. We have had a truly incompetent administration that 25% want to vote back in. Add in some fairly toxic and ill-informed opinion on economic history and hey presto a hung parliament seems a great idea as an alternative to elongate the denial period.

    Actually I'm surprised that the Tories vote is holding up so well given the above...........one lives in hope.

  • Comment number 86.

  • Comment number 87.

    83 RD

    Thanks for that - but I was being ironic having being labelled a Tory just for criticising Brown................... - in which case we should be in for a huge Tory majority - geddit?

    However if I was asking then 85 RugbyProf you provide good reasons which I understand but also think Cameron has dissappointed.

  • Comment number 88.

    #85, Rugbyprof: The reason why the Tories aren't running away with it has several factors.

    I think there are some more. First of all, the demonisation of the Conservative party (by Blair in particular) has been Labour's one and only successful project. Blair never understood parliamentary democracy. His strategy had been (I think it is well put in an old article of Anne Applebaum's) to steal Conservatives' policies and then call the Conservatives the loony right. He thought you deal with Opposition by emasculating it. And he succeeded, and hence another reason Tories are not running away with it is because they were a dreadful Opposition party.

    [ By the way, and this I think I read in Froude, a criterion of political maturity is to be able to imagine that intelligent people can hold in good faith and with access to the same information as you political views the opposite of yours. Blair could not countenance it. ]


    I would like to see Labour booted out of government simply because doing anything else would reinforce their view of themselves as a successful administration to which the electorate is expressing its gratitude by reelection. Just the thought of that...

    In any case, it seems that not many people share this view.

  • Comment number 89.

    I had a terible thought about Gordon and the gold sales. Consider the following:

    1) Gold is an unproductive lump of metal stored in a vault.
    2) Sovereign states never have any intention of repaying national debts. Just pay the interest and roll it over on maturity. Also why no political party has offered any ideas on repaying our own national debt.
    3) I read somewhere (cannot remember where) that Gordon swapped the gold for US treasuries.

    So, insead of a lump of unproductive metal, UK will now receive interest payments from the US indefinitely into the future.

    I hate to say it, but not as bad an idea as many make out. Although he was early in his term as Chancellor, and not the man he currently is.

  • Comment number 90.

    So having fuelled the economy using the man-in-the-street's pocketful of credit cards, the Government then fills up it's oversized credit card on our behalf. Now that we're doubly indebted to the economy and not earning our way out of the monthly minimum repayments what's next? Are we going to borrow on the IMF's credit card too? Surely that will be the end of the line in this 'maintaining a lifestyle we're accustomed too' fantasy nonsense. Why do we as a people think we deserve materially more than the rest of the world? I think we've finally been rumbled. This is going to be painful. No more cushy numbers in the UK.

  • Comment number 91.

    #88
    "I would like to see Labour booted out of government simply because doing anything else would reinforce their view of themselves as a successful administration to which the electorate is expressing its gratitude by reelection. Just the thought of that...

    In any case, it seems that not many people share this view."

    =======================================================================

    I share that view too.

    New Labour have one remaing task, together with the LibDems, to usher in PR.

  • Comment number 92.

    78. At 5:28pm on 23 Apr 2010, Richard Dingle wrote:

    #72
    "172. At 10:07pm on 18 Apr 2010, nautonier wrote:"

    =====================================================================

    To quote from the Telegraph article.

    http://www.telegraph.co.uk/finance/jobs/4681832/Foreign-workers-share-of-job-market-almost-doubles-under-Labour-to-record-high.html


    "Non-UK born workers now account for one in seven jobs after more than 1.8 million foreigners were added to the UK labour force over the last decade.

    Two thirds of those have come from outside the EU, making a mockery of the Government's claims that a cap on immigration will be ineffective because the majority of workers come from within the Union, taking advantage of free movement."


    Of 1.8 million workers only one third, 600000 came from the EU. These would have been EU citizens and legal to work here so what is the problem.

    I agree that the 1.2 million that did not come from the EU can only be justified if they took jobs that UK and EU workers did not want or were not qualified for. A lot of our hospitals could not function without nurses from Africa, for example.

    The international labour market is complex and if we had no economic migration either way it would cause economic problems for all of us.

    The reason why there are more EU workers over here than UK workers in the EU is down to the fact that EU workers in this country take fairly low grade work (fruit picking for example), whereas UK workers in the EU tend to be highly skilled (engineers for example). You will always find more Polish fruit pickers in Suffolk than you will find UK engineers in Germany. If you think about it is a compliment to the UK; engineers are rare, fruit pickers 10 a penny.

    The crux is whether these fruit pickers from other EU countries take jobs away from UK citizens. There is absolutely no evidence of that. There is plenty of evidence that without them our fruit would rot in the fields.

    I do agree that the Brown million number is suspect.

    >>>>>>>>>>>>>>>>>>>>>>>>>>>>

    Where are you getting your numbers from?

    The immigrants that pick spuds are now bringing their extended families into the country with some of them that have a culture that means stabbing anyone who causes them any kind of dishonour and/or injustice and their extended families including children that do not speak English are causing problems in local schools with their language and ability levels.

    Lincolnshire, Peterborough and many other places - are you calling this a success?

    I recently had a Roumanian woman begging at the door of my house, holding a malnourished baby - is this what the EU is all about. I've had Poles knocking on my door trying to sell me paintings (from elsewhere in eastern europe)?

    I went shopping the next day and the same woman and related immigrants were taken in turns to go begging on my local shopping mall - as holding the same baby.

    UK immigration from the EU and everywhere else is a complete mess!

    Have you got some reliable numbers or can you confirm that your own numbers are just guesswork?

  • Comment number 93.

    85. At 6:10pm on 23 Apr 2010, Rugbyprof wrote:

    The reason why the Tories aren't running away with it has several factors.

    4. On your list - Is the 'something for nothing culture' that Labour promote in everything that they do?

  • Comment number 94.

    1500 set to get the boot at Faith due to greedy bankers

    • Over 1500 more people to lose their jobs which could be saved

    • Hilco have bought the debt of Faith Shoe Group(FSG now in administration).

    • The joint administrators appointed by FSG, Mazers (Mr. Heath Sinclair) and Bond Pearce are officially running the sale and are legally required to ensure an open and fair process of inviting offers for the business and to accept the best offer for creditors, and staff of the business

    • It is believed that Hilco have brokered a deal where Debenhams will take ownership of the Faith brand and the Faith concessions in Debenhams (ca. 120)

    • It is believed that Hilco will then close the 80+ Faith stand alone stores and other concessions. The branches which close, head office, warehouse and distribution employ over 1500 people

    • This deal is taking place behind closed doors, whilst the administrators have yet to produce an information pack about the estate, which parties interested in buying the business will need to evaluate. Sources close to the situation are aware of several interested parties whose primary objective is the continuity of the business and securing jobs. It is the belief of these interested parties that the administrators are therefore not allowing a level playing field for other invites for the business, which they have a duty to ensure.

    • The administrators, who are required to ensure that the value of the estate is maximised, have allowed shops to be marked with Closing down sales and high season stock to be put on fire sale. Therefore devaluing the potential value of the business.

    • The duty of the administrators is to protect the interest of the company in administration, its employees and creditors. By their current behaviour it would appear that the administrator will fail in their duties and in what they are required to do legally in their enthusiastic attempt to serve their paymaster Hilco UK.
    This can lose the administrator their licence and they risk becoming personally liable to creditors and other interested parties.

    • Most of the main suppliers to FSG have a Retention of Title, which confirms the suppliers ownership of the goods in case of FSG default or FSG going into administration. The suppliers, through their solicitors, have put the administrators on notice repeatedly that they are not allowed to sell their stock, and that such stock can be clearly identified by each supplier. In case the administrators sales goods under such restriction, they are legally bound to pay full price to each supplier for the goods. The administrators have given no undertaking that they will pay each supplier for their goods, despite the suppliers having demonstrated that they can identify their goods.

    • It seems to be a repetition of this practice throughout the country where asset stripping companies, like Hilco are allowed to conduct a fire sale, through administrators who are experts in protecting the interest of their employer (Hilco in this case).

    • There are other interested parties who have the capability to run the whole company successfully and therefore preserve most of the jobs – the administrators should ensure a clear and fair bidding process for the business as there are alot of jobs at risk.

    • We call on the Government to intervene, including changing the administrator if necessary, to secure jobs and overall fairness in business.

  • Comment number 95.

    @78

    I´m an expat working in germany and qualified as an Eletronics Technician.

    Problem in the EU is that qualifications done in the UK are often NOT recognised in other EU countries.So since 1992 i´ve been doing low skilled work because my qualifications aren´t recognised.But in the UK my wifes nurse exams aren´t fully recognised in GB too...

    BTT.
    Why doesn´t anyway talk about wealth taxes and taxing foreigners like Abramovich more than than the standard 30,000 quid a yr?
    Spending cuts won´t be enough and taxes will have to go up.

    But intrducing an annual welath tax of 1% from 1 million pounds wealth(like in France) would bring in billions a yr and won´t hurt the average citizen.

  • Comment number 96.

    95. At 09:51am on 25 Apr 2010, JM wrote:

    @78

    I´m an expat working in germany and qualified as an Eletronics Technician.

    >>>>>>>>>>>>>>>>>>>>>>>>>>>

    The position hasn't changed in 30 years when I was at one time trying to do something similar - I think that it is called 'protectionism'

    EU would be great if it were ever to be a level playing field for the Brits

  • Comment number 97.

    #85 rugbyprof

    Your analysis of the reason that the Tories are not doing better in the polls displays insight as to how Conservative voters think, but reveals little in terms of analysis of the reality of the situation. You refer to people being in denial. An interesting use of phraseology.

    I thought it worth addressing some of the points that you make in your post in turn. I have kept you numbering for ease of reference, hence they will apparently appear out of sequence.

    1. Making votes actually count for something has some relevance to many electors. Probably struck a bit of a chord, like "boom and bust". There are various symptoms of people's growing understanding of the severe shortcomings of the current system of elections. - Massive tactical voting in 1997 and subsequent elections; the current situation, where a party coming third could theoretically form the government, through a greater number of seats in the House of Commons. A strong majority of people voted for parties in favour of electoral reform in 1997. Some of the promised changes have been made. Some such as the abolition of the remaining hereditary peers have not, mainly because the Tory Party strongly opposed and opposes these changes. David Cameron has tried to present himself and the Tories as the party of change. How can he represent change, when he rigidly backed the status quo and opposes further "change". It is in the name you see "Conservative" from to conserve, meaning to keep the same, retain the current characteristics of etc.

    3. The use of fear has been apparent in a number of different contexts. A true political Weapon of Mass Destruction. The first party to use fear during the current election campaing was the one that alleged Brown would introduce a death tax. The same party suggested that some form of agreement or coalition government between Liberal Democrat and Labour Parties would lead to economic armageddon, including horror upon horror the IMF. This included the completely inaccurate misrepresentation of two important aspects of the history of the IMF's involvement in the UK economy. The IMF was first involved in the UK economy during the massive foreign policy and economic fiasco of the Suez crisis in 1954 - under a Conservative government of Harold Macmillan. Secondly, the suggestion that the 1970's UK bail out by the IMF was a result of the Lib Lab Pact. It has been widely documented that the bail out took place in 1976 and a year before the pact came about in 1977.

    Osborne and Clarke's underlying message was "you better vote for us, or we'll get the City do its worst on the exchange rate, stock market and the UK's AAA credit rating". All hardly designed to reassure those of a slightly nervous disposition, who may become afraid.

    4. You assert that there has been a growth in those with left-leaning values. This is a moot point to say the least. Even in the recent peak of Tory majorities in the House of Commons under Margaret Thatcher, the party only ever secured about 35-40% of the popular vote at General Elections and generally much less in between at by-elections and other polls, including local government.

    So it could be argued that by 1997 the electorate had worked out how to prevent the Conservative Party stealing elections, and introducing unpopular measures like the poll tax, without sufficient popular mandate (- 50% of suffrage). The electors were smart enough to vote in the appropriate way in many constituencies to secure the change they wanted. This was repeated in 2001. The only things that really changed the electoral arithmetic in 2005 were the Iraq war and crucially large sums spent - by you know who, in the 150 or so marginal constituencies, which decide elections in the UK.

    The interesting questions for the 2010 elections are:

    (i) Will the millions poured into marginal constituencies turn enough of them Tory to win the election? How do the sums spent by the parties compare?
    (ii) Will the desire to see a change from Brown as PM dissuade enough people in marginal constituencies to vote for Cameron or Clegg,as tactical voting unwinds in enough numbers that will see a Conservative win?
    (iii) Is there enough desire amongst the electorate to see the constitutional changes first voted for en masse in 1997 through to a conclusion in the next parliament?
    (iv) Will there be fear in the electorate's collective memory of the Conservative Party's handling of the economy and in particular the recession of the 1980s to prevent a Conservative resurgence? Will the fear of further massive market liberalisation measures and public spending cuts, as took place then spook the public? Will there perhaps be a fear of a return to regular, repeated short-term electoral cycle bouts of boom and bust, as under 19 years of the last Conservative governments?

    (v) Will the Tory press bring the votes home?

    (vi) Will there be enough clarity about the tax and spending plans from all three parties, including during the Leaders' debate this week to help the electorate make an informed choice, come May 6th?

    Perhaps it is you, rugbyprof, that is in denial about the real amount of popular support that the Conservative Party has ever commanded over the last 40 years?

  • Comment number 98.

    I think it is not only the weakness of the Euro that the business expectations for Germany are surprisingly better, but the quality of the products as well.
    Much more surprising for many experts is the sharp fall in unemployment in spring in Germany, there is only one country that has less unemployment compared with January 2009 in the EU and that is Germany.
    Responsible is an agreement between employers and workers, there is more social balance compared with the UK.

 

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