Osborne’s credibility is in tatters

Figures published last week showed a shock contraction in manufacturing which rounded off another dire week for the UK economy and signalled yet more misery for ordinary working families at the hands of government austerity.

Figures published last week showed a shock contraction in manufacturing which rounded off another dire week for the UK economy and signalled yet more misery for ordinary working families at the hands of government austerity.

The Markit/CIPS purchasing mangers’ index (PMI) figures showed that manufacturering companies are laying off people at the fastest rate since late 2009.

The index for manufacturing fell to 47.9 last month and was the first reading below 50 – which indicates contraction – since November.

With output and new orders both falling in February, the figures round off a calamitous week for the government which saw Britain stripped of its AAA rating and George Osborne’s credibility in tatters. 

The figures also scuppered the more upbeat messages from Vince Cable and Nick Clegg at this weeks BIS Manufacturing Summit in the West Midlands.

These are dire figures and yet more evidence that the government’s austerity programme is sucking demand out of the economy.

It rounded off a week in which the UK was stripped of its AAA rating and leaves any economic credibility George Osborne and the government had left in tatters.

Government claims at the summit that it had boosted manufacturing ring hollow, especially for the highly skilled men and women who have lost their jobs and face a future of uncertainty.

When will the penny drop with government that what we need is a proper state backed British investment bank and an interventionist manufacturing strategy as part of strategy that promotes jobs and growth?.

Also whilst on the subject of the BIS Summit, Nick Clegg boasted about the coalition’s recent changes to employment law:

“The facts speak for themselves. More companies were set up in 2011 than ever before. Our changes to employment law mean we have one of the most flexible employment frameworks in Europe.”

In taking questions I challenged the DPM to demonstrate how many new jobs had been created by the coalition’s changes to employment law in manufacturing. He couldn’t – and waffled that employers had told him and the government that is what they wanted. Its not what they told me, Nick!

During the ‘networking lunch’ (that’s what they do at these things!) employers and their organisations told me that the government’s  ‘shares for rights scheme’, where workers in small companies can sell their employment rights for a small share option, is a non starter, and many said they don’t want anymore changes to employment law as they were irrelevant to their needs.

And as if to underline this – just take a look at the poll being run by the respected magazine The Manufacturer in answer to the question: 

“Will the upcoming changes to the employment tribunal rules (including upfront tribunal fees and mandatory early conciliation) encourage you to hire more employees?” 

Answer No 67%, Possibly 25%, Yes, 8%.

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