Parliamentary sketch – The Omni-powerful deliver GDP growth
So, figures for the economic recovery look good. GDP growth (0.8%) back to the pre-banking crash levels of 2008.
Of course, next comes the predictable fisticuffs between the Parties to claim credit for the good news. To do this, some claim the global financial collapse (in 2008) was all the fault of the previous Labour Government. The next job is to explain why the recovery is wholly the result of current Government policy.
Certainly, the Coalition had to govern in the national interest, facing up to the reality of an unprecedented national debt – currently standing at £1.3 trillion. Although the national deficit (the excess of public expenditure over income) has been brought down in the last four years. It will still top £95 billion this year – approximately half the deficit level of when the Coalition came to Government in 2010.
Although the GDP growth figures are welcome, the UK economy has not reached the sunlit uplands yet. Only when we stop adding to our national debt can we assume that the corner has truly been turned. The annual deficit must be erased first – something, to be fair, Labour achieved in the years 1998-2002.
So the GDP figures should provoke a sigh of relief rather than become a cause for celebration. Whether this growth is largely built on the property bubble in the south east is a matter on which I would welcome further circumspection and analysis. It would be easy to get carried away.
What we also need to ask is whether the actions of the Government are achieving what they set out to achieve? We were told in 2010 that “those with the broadest shoulders should carry the greatest burden”. (Chancellor of the Exchequer in his first budget 2010). But this hasn’t always happened. Big business, big banks and the wealthy are still avoiding their responsibility to pay tax.
Yes, of course, Liberal Democrats have achieved much by ensuring that the lowest earners have been taken out of income tax altogether. That helps, but seeing multinationals engage in lawful £billion tax avoidance just rubs salt in the wounds.
Although Governments should try not to spend more than they earn, in recovery terms, there is such a thing as “good” and “bad” public expenditure.
The proposed integration of health services announced this week in Cornwall (bringing the Peninsula Community Health back into the NHS family with the Cornwall Partnership Foundation Trust) is a sensible way of looking at patients as a whole as well as saving money on organisations competing with each other and having too many managers.
Affordable housing is also sensible public expenditure as it meets a need, provides a source of payback and kick starts greater confidence in the construction industry.
Whether all of this good news will have a genuine and beneficial effect on poorer regions like Cornwall remains to be seen. But we must welcome the news that the figures are going in the right direction; but remain cynical of any claims by politicians that they can play God with the economy.
You can contact Andrew George by email: email@example.com. His constituency office can be contacted at Trewella, 18 Mennaye Road, Penzance, Cornwall, TR18 4NG. Telephone: 01736 360020.
Andrew George MP
Kernow a’n West ha Syllan
West Cornwall and the Scillies
Constituency of St Ives
Tel: 01736 360020
Fax: 01736 332866
29th July 2014