The Bank of England’s latest warning that the economy has hit the buffers and will come grinding to a screeching halt later this year comes as no surprise.
Tony Burke is the Assistant General Secretary of Unite
The Bank of England’s latest warning that the economy has hit the buffers and will come grinding to a screeching halt later this year comes as no surprise.
Unite have been warning there is an urgent need to dump the cycle of “self defeating austerity” (as Len McCluskey aptly described it) and go for growth.
Instead, chancellor George Osborne’s cure for the UK’s economic ills is “more of the same” austerity, and even more austerity, coupled with weakening employment rights to gain traction and build growth.
The “March Of The Makers” – a boost in manufacturing employment to drive the economy – has hardly taken a step forward. Only the automotive sector has brought some sunshine into the manufacturing gloom.
Sounding like the BBC shipping forecast, Sir Mervyn King, in his statement yesterday confirming a “wasted year”, said:
“We are navigating rough waters and storm clouds are continuing to roll in from the euro area.”
And ever topical he also said:
“Unlike the Olympians who have thrilled us recently, he says, the UK economy has not yet reached full fitness. It is to the Olympic team that we must look for inspiration in a challenge that could take years to achieve.”
Not reached full fitness? We are still sitting it out in the stands! Even the Olympic “bounce” the Government is clearly hoping for is seen as being short lived and being downgraded to a “dead cat bounce”.
• It’s a complex economy, stupid 8 Aug 2012
• Alexander at odds with Osborne over UK credit rating 6 Aug 2012
• Osborne’s thrown a javelin through his own foot by failing to make FTT a reality 2 Aug 2012
• Double blow for Osborne: 52% want him sacked, and just 2% of Tories want him as leader 30 Jul 2012
• Latest GDP numbers mean Britain’s economy has shrunk since general election 25 Jul 2012
• How Osborne sent the “march of the makers” into reverse 1 Jun 2012
• Osborne’s ‘march of the makers’ is beating a retreat 2 Aug 2011
Some in the City are saying even the Bank’s new forecast of growth from 0.8% down to 0% may prove optimistic to say the least; we could be facing a triple dip recession later this year.
With no clear industrial strategy, except printing money hoping that low inflation (predicted to be below 2%) will help through cash for household spending via lower mortgage repayments, the UK faces a long term future of stagnation. The reality is family budgets are being squeezed through zero pay increases or sub inflation increases at best.
That is why in Unite we are seeing a growth in the requests for industrial action ballots in manufacturing companies and the private sector as hard-pressed members, sick of imposed austerity, fight back and attempt to make up lost ground.
Unite has just released a film on the impact of the economic crisis and how workers’ wages are running out after just 21 days, forcing many workers to borrow until their next pay day just to make ends meet:
Now that Lords Reform is not on the agenda, the government say they are planning to concentrate fully on growth, but it will prove to be futile if they continue to ignore the need for an industrial and interventionist strategy – the “Plan B” Len McCluskey argued for this week to kick start the economy.
And was Danny Alexander, Chief Secretary to The Treasury, softening us up when he said this week the UK’s AAA credit rating is “not the be all and end all” of government economic policy? Compare that to the announcement by rating agency Standard & Poor’s that Germany would keep its AAA rating and a downgrade was unlikely over the next two years.
The NASDAQ reported Germany had “a stable outlook” and the country had the “capacity to absorb large economic and financial shocks”. Germany has invested in its manufacturing base, has avoided making ideological attacks on workers’ rights, and has worked with unions and employees to ensure they withstood the worst of the crisis.
Last week’s UK manufacturing figures were also more bad news. The seasonally adjusted Index of Manufacturing and the Index of Production from the ONS have both fallen by 4.3 per cent in June 2012, compared with June 2011. These results and forecasts underline the desperate need for a change of course – for government-led intervention and stimulus to promote employment, growth and spending.
18 Responses to “0% growth forecast highlights need for stimulus to promote employment, growth and spending”
ralf milibnad
agree that propping up banks was a stupid waste of money. let bad business fail. and stop it getting too big to fail.
Newsbot9
That’s…not what I said.
Actually, I don’t believe letting the banks fail would have been a good idea. However, at the very least civil and probably criminal prosecutions against failing banks, their directors and boards were, to me, indicated.
Blarg1987
It is not working as it is not creating jobs, if the goverment spent say 20 bn in total on infastructure schemes etc that would create far more job employmeent and growth per pound then the current process of the BoE buying up sghares in companies which all that does justifies CEO’s over generous pay packages and takes money out of the company to go abroad. Paying the local guy to help buold a road / school or hospital means he spends the momney locally on local services that are less likely to go offshore and pays a reasonable salary then a ridiculus one to a handful of people.
gordon brown
although his comment had far more substance than your ad-hom attack.
any chance of replying or debating the point? do you think there should be more or less stimulus? what about QE? what do you think the appropriate size of the state is? do you think people should be able to claim out of work benefits for 1 month, 1 year, a lifetime?
freddy laker
I think the true jobless total is about 6 million and has been the same for 20 years. the way to get it to fall and get people into work is to change the incentive regime. ie pay less dole, pay more for work or expect something in exchange for benefits.
I favour an ’employer of last resort’ scheme where if you are unemployed the government will give you a job on min wage doing something socially useful. then you have money to live, a job and you can move into the real labour market as opportunities allow. money without expecting work in return is, as Gandhi said, one of the great social sins.