In Focus: Figuring it out
The latest gross domestic figures (GDP) - released on Tuesday - were surprising only to the extent that they seemed to cause surprise.
They showed that GDP had declined by 0.5 per cent in the final quarter of 2010. Whether we are heading for a double dip recession or not is for the economists to debate but, like many others, I have argued that things are not going to get better until this government puts away the stick and digs in its bag for the carrot.
As Richard Lambert, outgoing head of the CBI, said in his final speech shortly before the figures were released, it is not enough just to slam on the spending brakes.
He attacked a failure to prioritise the private sector, pointing out that businesses are vital to Britain’s recovery and could create 1.5 million new jobs over the next five years.
In a wide ranging attack, Lambert accused the coalition of making policies purely for political reasons and which are “careless of the damage that they might do to business and to job creation”.
I don’t agree with all that he said and - as seems to be the case at the moment - his tirade was long on criticism and short on solutions, but his larger point that the government had failed to “articulate in big-picture terms its vision of what the UK economy might become under its stewardship” must surely carry more weight because it doesn’t come from the usual suspects. The CBI after all is a traditionally conservative voice of industry.
Lambert said that a ‘hard look’ needed to be taken at the Department for Business and its role in promoting growth. It should be “less of a talking shop, more of an action-oriented growth champion”, he said.
The reaction to the GDP figures locally was also interesting. The government must urgently provide businesses with the incentive to expand, said the Birmingham Chamber of Commerce Group (BCCG).
Its policy adviser Will Rogers said: “Unemployment, investment intentions and cash flow all remain significant issues. Less than a week ago, it was revealed that the jobless rate in this region had increased to 9.9 per cent.
“This demonstrates the acute need for government support. The government needs to tackle the obstacles, such as damaging employment legislation and regulatory burdens, which prevent small- and medium-sized companies from getting ahead. Among them are the proposed changes to paternity leave, which need to be reconsidered.”
Again I don’t agree with all of what he says - when people talk about too much regulation my instinct is to grab a loudhailer and holler Enron and sub-prime mortgage lending - but I think the important thing again is that rumbles of discontent surrounding government economic policies are starting to be heard from quite a few quarters now.
Alan Durham, director of policy of the Coventry and Warwickshire Chamber of Commerce, said the figures highlighted the need for the government to help businesses grow and employ more staff.
One swallow doesn’t make a summer of course and I know many of you will see these figures as a blip and take the view that the government’s attempts to turn around the economy will take time.
Whether that’s true or not business confidence is need of a boost. Let’s hope the good news that surrounds manufacturing exports will turn out to be a catalyst for growth in the wider economy.
And I for one am hoping that the government has a Plan B somewhere up its sleeve.
Comments? Andy Coyne, Insider
