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.
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18 Responses to “0% growth forecast highlights need for stimulus to promote employment, growth and spending”
freddy laker
i apologise if I misread you. I think letting the banks fail would have been bad but they should never have been allowed to get to that size in the first place. a failure of government regulation.
I think criminal proceedings should be undertaken ‘if’ there were any laws broken – rather than retrospectively. But its hard to see what the banks did that was criminal. It was the implicit support from the taxpayer that allowed the banks to behave the way they did. If bankrupting a company led to 5 years in debtors prison, then they would behave differently. Its all about risk and reward. For the banks there was no risk (as proved when they were bailed out) and large rewards. It is for the government to legislate to get the balance right.
Any business that cannot be allowed to fail cannot be allowed to exist. It is corruption of the free market and it is the government’s job to set the legislative framework within which the banks operate.
I suppose we need lots of smaller banks who know that failure means bankruptcy (with deposits protected via insurance – an insurance that would be unaffordable for banks behaving recklessley).
gordon brown
ps I don’t owe any tax. I work for the government and they take it at source.
Newsbot9
You don’t think that the things they did were reckless and criminal? *Potentially* they should only have civil liability, but they were reckless, as the need for a bailout confirms.
Setting up automatic punishments like that is never a good idea though, it needs to be case-to-case.
And I’d point out that smaller banks don’t have the same issues. They can be bought out, as was one small co-op which found itself in trouble.
Newsbot9
Ah yes, you’re pre-emptively pleading your innocence of a charge I never raised against you, which makes me very interested in WHY…
Earned income, fine, but I suspect unearned income.
gordon brown
They were reckless but recklessness in itself isn’t criminal. If what they did was criminal they should be prosecuted. And if what they did was criminal is not my judgement call but the law’s.
Justice is about setting up a system where people know the effect of their actions. If they break the rules they can be prosecuted. That is not automatic but transparent. Not sure what you mean by “case-to-case” as that is how the justice system operates anyway. The rules are across the board but the application s of them is on a case by case basis.