Wednesday, 27 February 2013

There is an alternative and the British Chambers of Commerce spell it out.

Today the Prime Minister, David Cameron, adopted the strategy of economic madness. Whilst his Business Secretary, Vince Cable, has described the loss of the triple A status as being largely 'symbolic', Mr Cameron once again nailed his colours to its mast. It is a bit like crashing a car into at a tree and then declaring that it indicates they were travelling in the right direction. Mr Cameron continues with the line that there is no alternative. This is wrong, blind, foolish, obstinate and rather arrogant. It rejects advice from those economists who call for a change in direction.

The economy is in a bad shape. It is insufficient to point to the odd 'green shoots', the odd indication that things might turn out all right in the end. The coalition is missing its targets by a wide margin, and with the current strategy, austerity is set to last at least until 2017 and beyond. A decade of austerity will leave the economy considerably weakened, the poor poorer.

Nor is this a party political issue. Groups across the political spectrum, and of no political colour, have called for a strategy for growth.  Today, in light of the absence of growth, the British Chambers of Commerce has called for immediate action to stimulate growth. This would be a major change of direction. Growth should be the objective, and not simply cutting the deficit.

The Director General of the BCC said today:

"The Chancellor should seize the opportunity in next month's Budget to be radical, and introduce measures that creat“e an environment of enterprise, stimulate export growth, kick-start infrastructure projects and create a structure of business finance which supports growing companies. Above all, these measures should create confidence. Our own research shows that firms across Britain believe they can drive growth this year, but they can’t do it alone. The government must be bold and do all it can to boost confidence so that businesses can create jobs, wealth and ultimately long-term growth.”

The government strategy is counter productive as blind austerity reduces revenue it becomes more difficult to cut the deficit. It is bad economics and bad for the country. There is an alternative.


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