There is a widespread view that future growth in the UK economy will be more sustainable if it is driven by net exports and business investment and not by household spending. The third quarter GDP numbers provided mixed news for supporters of this view.
On the day the coalition unveiled its formal legislative proposals to give Holyrood greater tax varying powers, a group of business leaders in Northern Ireland have called for Stormont to be given the power to set its own corporation tax.
Shadow work and pensions secretary Douglas Alexander gave a speech to Demos today in which he acknowledged Labour’s mistakes in communicating their response to the recession and criticised Conservative attempts to portray the opposition as hoping for a double dip recession. He explained that Labour had made the right decisions during the economic crisis by preventing a recession from becoming a depression.
The GMB has uncovered shocking evidence of the damage caused by the coalition’s cuts, with a national average of 2.6 claimants for every job vacancy. This is a situation that is likely to get worse as the sacking of 500,000 public sector workers begins to bite harder in 2011.
Tomorrow’s papers will probably note the forecast that, by 2015, public sector employment will fall by 330,000, one hundred and sixty thousand less than the 490,000 forecast in June. 30,000 of the difference is down to “methodological refinements”. The remaining 130,000 reduction is because the Spending Review cut more from social security and less from Departmental budgets than OBR expected – a different balance of misery, rather than a genuine improvement.
Dan Smith highlights the impacts of the Future Jobs Fund in Brighton and Hove, arguing it has proved cost effective, helping long-term claimants off benefits.
The Bank of England’s Adam Posen expects the impact of the Coalition’s cuts as “quite contractionary”. He also accused Mervyn King of being “excessively political”.
Senior members of the DUP and UUP have attacked SDLP social development minister Alex Attwood’s opposition to reforms being introduced on housing benefits by the coalition government in Westminster.
On Monday the big news of the day was the Ireland bailout. Yesterday, the follow-on story was Portugal’s general strike which could push the country over the edge. But the nagging doubt in everyone’s minds in the European power-centres today will be neither: it will be the much worse possibility, remote or otherwise, that Spain might follow: Spanish euro spreads reached a record 260 basis points yesterday, making it is very expensive for Spain to borrow.
A new report shows that cuts, rising inflation and stagnating pay will make lower middle classes £720 a year worse off. It shows that wages will fall in real terms until 2013.
