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Osborne delivers just ONE TENTH of the growth we were promised

January 25, 2012 10:10 am

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Mark Ferguson

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Today’s GDP figures have confirmed that since the 2010 spending review, growth has been a paltry 0.3%, compared to the relatively comfortable 3% that was predicted at the time. That means Osborne has delivered just one-tenth of the growth we were promised 18 months ago. Lets take a look at that in graph form:

Growth since the CSR

Update: In response to the GDP figures, Ed Balls has said:

“The British recovery has been stalling since the government’s spending review in the autumn of 2010, but now the economy has gone into reverse. Since the Chancellor’s spending review the economy has grown by just 0.3% compared to the 3.0% the government predicted.

“And far from the eurozone crisis being to blame, it is only rising exports that kept us out of recession last year. By clobbering the economy with spending cuts and tax rises that go too far and too fast, the government has left us badly exposed if the eurozone crisis deepens this year. This was entirely avoidable and the Chancellor cannot say he wasn’t warned.”

“These figures are a damning indictment of David Cameron and George Osborne’s failed economic plan. Families, pensioners and businesses know it’s hurting – but the evidence is now overwhelming that on jobs, growth and the deficit it’s just not working.”

“The time has now come for David Cameron and George Osborne to listen to advice, including yesterday from the chief economist of the IMF. The cautious thing to do is to act now, but the reckless thing to do is just to plough on regardless with a plan that isn’t working and causing huge damage. Labour’s five point plan for jobs would help get our economy moving, get Britain back to work and so help get the deficit down in a fairer, better way.”

“Of course there need to be tough decisions on spending, tax and pay, but trying to go too far and too fast ends up backfiring. Rising unemployment and a lack of growth means the government won’t now balance the books by 2015 and are set to borrow £158 billion more than planned. And this government’s failure on the economy means the next Labour government will inherit a substantial deficit. We will have to sort out the deficit, clear up George Osborne’s economic mess and deliver social justice in tougher times.”

“As we have consistently argued cutting spending and raising taxes too far and too fast would choke off the recovery. But it’s not too late for this out of touch government to change course and get a plan for jobs and growth.”

Tristan Price-Williams
If I delivered only 1/10th of my target, I’d be sacked!
Badhamfarm
Yes what we need is to spend & borrow a lot more in order to get out of debt. Sounds like a Labour plan.

Redshift
Because clearly what we need is flatlining growth. Osborne has failed to hit his own deficit reduction targets because he has damaged growth, and therefore projected tax receipts have been lower, whilst the welfare bill has been higher.
Dave Postles
‘borrow a lot more’
Please run that by us again because I’ve lost count of how much more this Coalition is expecting to borrow over the term. The last figure that I remember is £158bn over the term.

Anonymous
”
The last figure that I remember is £158bn over the term”
Cough..
You remember wrong.. 2011 Forecast borrowing was £127Bn. down £10B form prior year.. (It was actually slightly less.. )

Peter Barnard
@ Madasa,

“Over the term,” Mr Fish, “Over the term ….”

The OBR forecast in the Coalition June 2010 “Emergency Budget” was that total net public borrowing for the years of “the term,” ie 2010/11 to 2014/15 inclusive, would be £451 billion.

In November, 2011 (the “latest forecast”), OBR forecast that total net borrowing for the same period would be £563 billion : an increase of £112 billion.

As it happens, the 2011 OBR forecast is only a smidgin less than that forecast in Alistair Darling’s last budget (HM Treasury then forecast £567 billion for the same period).

May I suggest some “Iron Laws of Economics” :

(i) as Robert Chote is fast discovering, “The only function of economic forecasting is to make astrology look respectable” : with thanks, as ever, to the late (and great) J K Galbraith ;

(ii) economic good news is always a result of the competence, nay prescience, of the (any) Chancellor ; economic bad news is always the result of externalities, usually events occurring overseas.

There are at least four more ….

(iii) nothing lasts for ever ;

(iv) after every boom there will be a bust ;

(v) banks will always find ways to lose a lot of moolah and,

(vi) J K Galbraith’s concluding sentence in his widely acclaimed “The Great Crash” (first published in 1954) : “Long-run salvation by men of business has never been highly regarded if it means disturbance of orderly life and convenience in the present. So inaction will be advocated in the present even though it means deep trouble in the future. Here, at least equally with communism, lies the threat to capitalism. It is what causes men who know that things are going quite wrong to say that things are fundamentally sound.”

Boy! I wish JKG was still around … he would be in his element …

Anonymous
The problem is the Tories are borrowing and god know what for, if your cutting and borrowing and you cannot make the home market better, then sadly we are in so real problem.

JC
How does this differ from any other Chancellor in the last 10 years? Have all the previous ones been spot on, or have all the forecasts turned out to be a little optimistic over a period of 18 months or more?

Anonymous
But come on if these people cannot get it right for god sake we are doomed doomed I say, from New Labour to New Tories.

Anonymous
I would love to say yes Ball’s is right and the sooner we get labour back in the better, look at Miliband he’s up and about, and telling us how he will now deliver the style of political policies which will deliver us from the door of gloom, but I suspect to hear, yes that’s not to bad we’d better Follow the Tories on this. yes when we get back in, we will be following the Tories spending plans, as he has almost fallen over telling us a few times.
derek
To a mouse! or Osborne1785Type: PoemWee, sleekit, cow’rin, tim’rous beastie, O, what a panic’s in thy breastie! Thou need na start awa sae hasty, Wi’ bickering brattle! I wad be laith to rin an’ chase thee, Wi’ murd’ring pattle! I’m truly sorry man’s dominion, Has broken nature’s social union, An’ justifies that ill opinion, Which makes thee startle At me, thy poor, earth-born companion, An’ fellow-mortal! I doubt na, whiles, but thou may thieve; What then? poor beastie, thou maun live! A daimen icker in a thrave ’S a sma’ request; I’ll get a blessin wi’ the lave, An’ never miss’t! Thy wee bit housie, too, in ruin! It’s silly wa’s the win’s are strewin! An’ naething, now, to big a new ane, O’ foggage green! An’ bleak December’s winds ensuin, Baith snell an’ keen! Thou saw the fields laid bare an’ waste, An’ weary winter comin fast, An’ cozie here, beneath the blast, Thou thought to dwell- Till crash! the cruel coulter past Out thro’ thy cell. That wee bit heap o’ leaves an’ stibble, Has cost thee mony a weary nibble! Now thou’s turn’d out, for a’ thy trouble, But house or hald, To thole the winter’s sleety dribble, An’ cranreuch cauld! But, Mousie, thou art no thy lane, In proving foresight may be vain; The best-laid schemes o’ mice an ’men Gang aft agley, An’lea’e us nought but grief an’ pain, For promis’d joy! Still thou art blest, compar’d wi’ me The present only toucheth thee: But, Och! I backward cast my e’e. On prospects drear! An’ forward, tho’ I canna see, I guess an’ fear!
http://twitter.com/gonzozzz dave stone
As Mr Balls points out, it’s only exsports that have kept us afloat, the domestic economy is quickly becoming a Cameron/Osborne manufactured disaster zone.
Explains why Cameron was sounding over-the-top hysterical on PMQs today.
There’ll be a lot more opportunities for him to vent his over-wrought anxieties in the coming months.
Anonymous
Well, this, as always, does not look promising for the Coalition, but will Labour prosper from this…. Do they ever…

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