Here we go again. Stock Market down, the value of banks decreasing and economies in turmoil. The only bright spot about the recent economic news is that George Osborne is on holiday, meaning that we have been spared his sanctimonious preaching for a fortnight. He would tell us (if he were here) that his strategy is correct and that slashing spending was the only way to protect us from the hell now being unleashed on other parts of Europe. He would then put his fingers in his ears and sing "La, la, la, not listening, la, la, la...."
The present Government's strategy of keeping hands in pockets and hoping that the market provides a miracle cure is not working. The Government's annual forecast told us that the economy was going to grow by 2.5% this year. One quarter of the way through, the latest figures show growth down at 0.2%. Put simply, for every £100 the country made last year, this year we are on course to make a huge £100.80. 80p more. Not enough to buy a loaf of bread these days.
Why is the economy not growing? Well, the idiotic official explanations from the Office of National Statistics (or Order of NonSense) are that the Royal Wedding, the extra bank holiday and the warm weather were to blame. That would be the wedding that was justified on the basis that it would bring tourists flocking here. It would also be the bank holiday where people were off work and more at liberty to spend money. It would be the warm weather where people don't stay at home. They go outside. Where they are more likely to spend money.
Unfortunately, the Government is not providing any economic stimulus, meaning that people are worried. The most recent economic news from around the world will do nothing to allay the fears people have, more likely it will have the opposite effect. Just when the Government hoped we would all be skipping out to spend what little money we have, it seems we sit at home, watching the television, seething at the sight of David Cameron turning up at a wedding in a morning suit.
Pompous and complacent seem to sum up George Osborne's personality fairly succinctly, but unfortunately, they are also by-words for his economic policy. Unless the British economy begins to grow rapidly, the downturn in the markets and the sinking of various Eurozone economies will drag Britain down, too. Osborne seems to have pinned all of his hopes on exports, but without fiscal stimulus, no-one can afford to make anything, businesses are struggling to find alternative markets, and an awful lot of countries cannot afford to buy anything from us anyway. Only by encouraging the home economy might we avoid the dreaded double-dip recession, but that would involve Osborne admitting that he is wrong - not something I believe he is capable of.
So, the Etonians will limp away in the same way the Tory 'Wets' did in Thatcher's early days, trying to justify their decimation of the economy. Their friends in financial institutions will have to take a hit ("bad luck, old boy"), but will still vote another £11.4 million into Tory coffers this year. Meanwhile, small businesses up and down the country will carry the can, with workers losing jobs and repossessions rising.
Over the coming days, we may hear more of TINA (There Is No Alternative). We should not be misled. By cutting VAT, even temporarily, people may be more likely to spend. If goods and services are being purchased, confidence might return. Forcing the banks to invest might be an insurance policy for them in troubled times. All of this will need a Chancellor with spirit and backbone. Hands up anyone who is holding their breath..........
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