There’s been a last gasp hurrah for Labour’s economic policies. As the BBC notes:
New figures showing the biggest quarterly drop in UK unemployment for three years have re-energised the political debate over the best way to boost the country's economic recovery.
The number of people out of work in the UK fell by 49,000 to 2.46 million in the three months to June, although Scotland saw a 0.2% increase in its rate of unemployment to 8.4% in the same period.
Let’s be clear: Labour was the government for part of this period and it was Labour’s plans that resulted in this fall.It’s a long way from all good news: most of the new jobs are low grade part time. But it shows that Labour was delivering, and won’t any more.
At the same time it’s clear now the ConDems are not delivering. As the Guardian noted this morning:
Fears that Britain could slip into a protracted depression intensified tonight as markets took fright at the US central bank's wary economic outlook, the Bank of England's own warnings on the UK, and a slew of gloomy data.
With businesses and households fretting over swingeing public sector spending cuts and shaky economic prospects around the world, the Bank cut its growth outlook and warned that Britain faces a long and "choppy recovery".
As the FT noted, overnight reaction on the markets was a rout. And it’s not just markets. As was reported yesterday:
Worries about job prospects, soaring food prices and the general economic outlook amid government cutbacks have sent consumer confidence plunging to a 15-month low.
Nationwide's monthly consumer confidence index released today also shows households are growing more wary about making major purchases, are more cautious about the housing market and increasingly believe their income will fall over coming months.
The reality has dawned: the ConDems and their friends around the world intend to decimate economic activity in pursuit of their dogma. The best people can hope for is low grade, part time, unskilled work. And their reaction is obvious: they are stopping spending.
There is no prospect of a private sector recovery in this environment. This is double dip recession territory, and depression to follow.
That’s the reality of Osbornomics.
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Let’s be clear: Labour was in government during the most severe recession since the 1930s. Labour finished office with unemployment higher than at the start (as all Labour governments have done). They have also created the biggest deficit in peacetime.
If you call that “delivering” then I’m glad they’re out of power.
@Lester Piggott
And it was entirely caused by private sector banks
Which means the private sector can’t provide a solution
Just thinking about the above comment…in 1964 Jim Callaghan walked into the Treasury and was greeted by the outgoing Chancellor along the lines of ‘sorry about the mess we’ve made’ etc. etc. and I remember reading apropos the high inflation of the 70s that there was a secondary banking crisis circa 1971-73 which was a result of a loosening of what had been a tough credit regime in the 60s. I am no economist but I believe Heath was trying to inflate away the resulting debt when the oil crisis hit which only made the inflation much worse. So tagging Labour with the 70s inflation is a crime against political history.
I also am getting a little sick of hearing that the last recession was the worst in 60 years. I remember the utter hopelessness of the years of the first Thatcher govt. and it was much, much worse than what we are experiencing now e.g. for the unemployment count to drop (!) during the last recession…this is unheard of!!!
Please don’t put this on your website but maybe you could write a little historical piece (for the Guardian?) about the years 1970-4 to show how the Tories have not a single leg to stand on in terms of economic competence and their current ideological cuts-programme is yet one more mess coming fast down the tracks… The ‘Labour’s Legacy’ press conference with Warsi and Huhne is yet another feat of prestidigitation which must be neutralised quickly.
Love your blog by the way.
Philip (I’m a PhD English Lit student but your blog is the first thing I read every day)
@Philip Martin
Philip
Thanks for your kind words
The early 1980s was horrid
We will get back there, I fear
And yes – I do recall the early 70s too – and took a keen interest (my first general election in which I campaigned – albeit at school, was 1970)
But I think thee are others who could record the fiasco of that period better than me
Lord Skidelsky is an obvious candidate
Why not mail him?
Best
Richard
The last two periods of Conservative government were characterised by catastrophic macro-mismanagement. Under Ted Heath there was the ill-fated ‘Barber boom’ of 1971-3 which generated rampant inflation and a property bubble – very much a taste of things to come in the 1980s and 2000s! I don’t want to lay into Heath too much as he was in many ways a decent guy and a social democrat who cared about unemployed people etc. in a way that today’s Tories (mainly) don’t. But his government’s economic record was lousy.
After that there was one, terrible deliberately engineered recession under Thatcher in the early 1980s which destroyed huge swathes of the country’s industrial and social structure – we are STILL paying the price for that now. And another unsustainable housing-led boom under Nigel Lawson in the late 1980s, followed by another massive recession in the early 1990s. It’s quite clear that whenever the Tories did manage to achieve a few years of good economic results (the mid-1990s for example) it’s only because they had so badly damaged the economy in the first place that any recovery looked good by comparison.
Gordon Brown of course presided over a recession that was EVEN WORSE than anything the Tories have managed (so far!) But that’s because he deluded himself into believing that neoliberal laissez-faire economic policies would be permanently successful – “we have abolished boom and bust” and all that nonsense. Obviously he needs to take the blame for that but he was not the only culprit – almost EVERY commentator and politician over the period 1997-2007 believed the same thing as Brown – on both sides of the house.
It’s quite clear that the Coalition is seeking to repeat the “success” (?!) of the Thatcher govt of the early 1980s by precipitating a massive recession and then hoping for a recovery by 2014-15 and getting re-elected because people have short memories. I don’t think it’ll work – because the cuts are so brutal and insane (and the global picture so grim) that we’re headed for prolonged stagnation, not recovery. The tragedy of the situation is that we will probably end up suffering 5 years of these lunatics before Labour gets a chance to sort things out.
“Let’s be clear: Labour was the government for part of this period and it was Labour’s plans that resulted in this fall.”
Oh come, come. Parliament was dissolved on the 12th of April, but the country had long since ceased to believe Labour would be returned to power and were planning on a Conservative government. It would be interesting to see where the extra 184,000 jobs came from, but I expect most are seasonal work (agricultural or tourism), and nothing to do with the government.