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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11 Responses to “Osborne’s credibility is in tatters”

  1. Stephen Wigmore

    State spending has increased year on year. There are cuts but talk of general ‘austerity’ dragging down the economy is factually wrong. When are you going to stop peddling lies?

    Spending increased 6% a year in real terms from 1999-2010 and growth fell from around 3% to 2% even before the recession. Even more spending now cannot save the economy when we have fundamental productivity problems not to mention a sovereign debt crisis ready to hammer on the door.

  2. DJT1million

    Incredible. Our economy is flatlining, demand has gone and whilst the government is spending more it is on a toxic mix of pointless & expensive ‘reforms’ such as the NHS sell off and paying for the consequences of the austerity in higher benefit bills and reduced tax take. Not lies, the grim truth and we are sick of it.

  3. LB

    2005 – 2010

    The off the book debts for the state pension went up by over 700 bn a year.

    Nothing like Labour blaming others for its frauds.

  4. LB

    So how does the benefit bill account for the increase?

    If we look at the increase in spending and divide it by the small increase in unemployed, if you are right, there are benefit claimants coining it in.

    Spending is up.

    Debt is up.

    Taxation is up far from being down. Those paying tax are getting an unfair share of the burden.

    Meanwhile the off the book debts are rocketing.

    2005-2010, 700 bn a year increase

  5. wdngrjgtytyt

    Labour, Tories and Lib Dems have ruined this country they have no idea what they are doing

    Sign this petition to restrict Bulgarian and Romanians from entering the UK:


    Almost 70,000 signatures

  6. Raging Leftie

    God, is this really surprising? Osbourne, still refusing to change plans and in fact refusing that there is another plan. The answer is never going to be obvious, but surely this path needs to be seriously questioned? Bring on 2015.

  7. Newsbot9

    It certainly makes us less attractive to skilled foreign workers, though!

  8. Newsbot9

    Ah yes, triple-dip denial. Keep on ignoring the very real cuts which are happening.

    Keep on calling for more of the same – more borrowing for less, negative growth.

  9. Newsbot9

    Your fraud is not connected to the state’s on the book accounts, stop claiming it. And of course you feel that you are not receiving enough corporate welfare.

    Keep on claiming that the people you are starving and freezing are “coining it”, when you’re out to murder them.

  10. Newsbot9

    So you’re accusing Labour of your sins again, trying to point to your debts as a “pension”, when they’re unrelated. Your private fraud is private fraud, stop trying to socialise your costs!

  11. Newsbot9

    Well done, you’ve found saboteur like you determined to undermine the economy. And you’re determined to spam the link.

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