JerryChicken wrote:
The inevitability of an upturn in the economic figures was never in doubt, it would happen one day for if it didn't then we may as well have put cyanide in the UK's water supply and turned off all the lights. The question is - why weren't some of the more recent measures such as the mortgage guarantee scheme and relaxing the stringent rules that had been enforced on consumer credit applications introduced three years ago - this isn't austerity at all its a return to easy credit.
Well well, thats not what your left wings chums have been saying. The points you mention are just tweeks, the main reason we are seeing the growth is Osborne/Cameron put in the right foundations and stuck to their guns when it took longer than they expected for reasons I detail below.
JerryChicken wrote:
An economic recovery based on consumer credit, a government guarantee to lenders for 15% of a property value to kick start housebuilding again, government borrowing higher than it was when they started ...
We could have done all of this three years ago you know..
If Labour had remained in power then your last statement would be correct. Government borrowing would definitely have been higher than three years ago and we would have been deeper in the do doos. Had Ed Ballsup been in charge we could have headed for a fiscal crisis and a second major run on Sterling in 2010.
However Labour were booted out thank goodness and so your statement is an example of the “tosh” I mentioned before. Business optimism has been getting stronger and the Purchasing managers’ surveys which measure growth in the three main sectors of the economy – services, manufacturing and construction – are showing the strongest pick-up since the mid 1990s when the economy was recovering strongly. Markit, the firm that complies these surveys states that “ Measured across all three sectors, inflows of new business hit a record high in November, with demand surging from both consumers and the corporate sectors”
Of course there is a long way to go and nobody is pretending, least of all Osborne, that the return of growth has solved Britain’s problems at a stroke. But as has been reported, a Rubicon has been crossed and those who said austerity would inflict a permanent deep freeze on the economy have indeed been proved wrong, as they have in previous economic recovery in this country. It is not just a political victory but “the intellectual debate has been settled in favour of the minority who stated that the economy could grow through a period of necessary action to cut a budget deficit that had ballooned alarmingly” as David Smith put it.
You may recall the economy dropped by 7.2% in 2008-9 before this government started their task.
Normally growth of 1.4% would be a disappointment and the OBR forecast of 2.4% for year is at best just average, but we are in unusual times and our quarterly growth of 0.8% in the third quarter was good enough to take Britain to the top of the G7 league for a few hours until America revised theirs upwards to 0.9%.
So scoff all you like but this is some achievement given that this government has endured a greater handicap than other economies with factors peculiar to Britain eg: 1. With one of the largest financial sectors in the world we were hit harder than most when this collapsed. And 2. An important part of our economy has been the North Sea contribution which again has seen a major decline in revenues over the same period. Add to this our over dependence on Europe for our exports meant we suffered when the Euro crisis led to a long and deep European recession. The eurozone woes, rather than Osborne's austerity were one reason why our recovery took longer than expected. Without these three handicaps it is likely that the Osborne/Cameron policies would have born fruit much earlier.
