DEFICIT REDUCTION-GOVERNMENTS POLICIES WORKING?
Well ,actually, we don’t know yet
The media was a awash this week with positive news on the economy. According to the Office for National Statistics (ONS), the British economy grew by at least 0.8 per cent in the third quarter. This improvement was seen as robust evidence that the Governments economic policies were working-to general relief all round. Really? I dusted off my primer on Economics (probably the same one Alan Johnson is now reading) which tells me that that monetary and fiscal policies take a long time to work their way through the economy — typically, one to two years. The media clearly need reminding just how long this Government has been trying to get to grips with the deficit. The encouraging growth figures in fact reflect last year’s decisions by the Bank of England and the previous Labour Government. They tell us absolutely nothing about how the current Governments economic policies are working. Lets hope they do work , but such wild optimism is hardly merited at present ..
Note: Meanwhile the European Commission, backed by the European Parliament, was seeking a 6% rise in its Budget when national governments are seeking to cut their individual spending, reflecting a growing disconnect between the Brussels bureaucrats and the respective national governments, and indeed the citizenry of Europe. What is the point in governments reining in their spending, if they concurrently have to up their central donations to the EU. And how will citizens ,cutting their own expenditure, seeing a reduction in theirr public services and perhaps losing their jobs too, view such profligacy from the Commission and Parliament? I think we know the answer. Cameron signed up to a 2.9% increase, trying to sell this as something of a victory, suggesting that future budget cuts would be possible. Dream on. He has much to learn in his new job. Raising public expectations, then delivering less than expected is not good politics . A Tory MP Douglas Carswell reflecting the opinion of many backbenchers to the centre and right of the party wrote in the Times ‘ No matter what the spin from Downing Street claims, this week’s deal is anything but a victory for Britain.’ In Carswells judgement we were ‘mugged’ . However, the right of the party might be reassured just a little by Cameron’s admission to a Telegraph journalist in Brussels that he was a ‘eurosceptic’.