Even the BCC has abandoned Osborne on austerity


by Sunny Hundal    
8:20 am - June 1st 2012

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‘It’s not good news for George Osborne’ has almost become a cliché now, and today offers no exception. The British Chambers of Commerce is predicting that UK growth will be 0.1% this year, down from an earlier prediction of 0.6% growth.

That they expect average incomes to fall isn’t the big news – it’s that the BCC has also abandoned Osborne:

[UK has] considerable credibility in the financial markets, and [Osborne] is now in the position to increase spending on growth-enhancing policies without endangering Britain’s AAA rating.

Sorry what was that? The BCC want Osborne to start spending money again? What happened to austerity?

Anyone who thinks austerity hasn’t been introduced yet needs to read up. That even the BCC – among Osborne’s biggest cheerleaders – has abandoned austerity is significant.

But we have a bigger problem: a bit of investment spending now isn’t likely make much difference to growth and jobs either.

Why? For a start, India, China and Brazil are rapidly sliding into a slow-down too, which will not only further reduce demand for British exports but lead to less investment here.

When this government had a chance to stabilise and pull the economy out of a hole, they blew it. They went for austerity and got us into a double-dip recession. Thanks to the problems in the Eurozone and other parts of the world now, pulling out of this long stagnation will take a lot, lot more than a a few billion of investment spending.

They don’t want to or have the courage to go further. So the British economy will remain in a hole.

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About the author
Sunny Hundal is editor of LC. Also: on Twitter, at Pickled Politics and Guardian CIF.
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Story Filed Under: Blog ,Economy

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Reader comments


What was the point of austerity? Reducing the structural deficit was the justification, based on that worn analogy with household finances. However the main project is still being carried out, with tax cuts to high earners, the destruction of the public sector, the NHS and our education system.

While the economy is important electorally the cultural future of the UK is being made. Unless efforts are made to show that there are alternatives that fit into a coherent view of how we should look over the next decade and a half we risk winning the battle but losing the war.

2. Chaise Guevara

@ 1 Cherub

” that worn analogy with household finances”

“Worn” is rather a generous word there.

I read ‘even the BBC has abandoned Osborne on austerity’ but should have realised that is a ludicrous idea.

4. Benjamin Ashley

Shocking. That should have been the plan from the very start. Austerity is a really really bad idea. It always was. you can’t cut everything and not spend anything. You have to spend at least some money in the right places for growth to happen.

The household finances budget metaphor would be better replaced with that of a factory. If you buy less raw materials you spend less but you don’t make as many products which generate income.

Does anyone know how often that growth has been the same as or greater than the predictions since the General Election? It just seems to me that every quarter sees the figures revise downwards. It may have been the case before the economic downturn but I just wasn’t paying attention.

@5

“The household finances budget metaphor would be better replaced with that of a factory. If you buy less raw materials you spend less but you don’t make as many products which generate income.”

Bang on. It is as if Osborne has never even heard of the concept of a fiscal multiplier ( http://anotherangryvoice.blogspot.com.es/ ). But then why would he have? The closest he’s got to an economics qualification is GCSE Maths.


Reactions: Twitter, blogs
  1. Liberal Conspiracy

    Even the BCC has abandoned Osborne on austerity http://t.co/H5B5Mtde

  2. Mark Martin

    Even the BCC has abandoned Osborne on austerity http://t.co/H5B5Mtde

  3. Jason Brickley

    Even the BCC has abandoned Osborne on austerity http://t.co/hiEwa7sE

  4. cutchswife

    Even the BCC has abandoned Osborne on austerity | Liberal Conspiracy http://t.co/ySvcTPdI via @libcon

  5. sunny hundal

    The British Chambers of Commerce was among Osborne's biggest supporters of austerity. Today they've abandoned him http://t.co/0ARmuJu9

  6. Paul Burgin

    The British Chambers of Commerce was among Osborne's biggest supporters of austerity. Today they've abandoned him http://t.co/0ARmuJu9

  7. SoapboxL

    The British Chambers of Commerce was among Osborne's biggest supporters of austerity. Today they've abandoned him http://t.co/0ARmuJu9

  8. Chikere E

    The British Chambers of Commerce was among Osborne's biggest supporters of austerity. Today they've abandoned him http://t.co/0ARmuJu9

  9. Jamie Cartwright

    The British Chambers of Commerce was among Osborne's biggest supporters of austerity. Today they've abandoned him http://t.co/0ARmuJu9

  10. anna-rose phipps

    The British Chambers of Commerce was among Osborne's biggest supporters of austerity. Today they've abandoned him http://t.co/0ARmuJu9

  11. michjperry

    The British Chambers of Commerce was among Osborne's biggest supporters of austerity. Today they've abandoned him http://t.co/0ARmuJu9

  12. TeresaMary

    Even the BCC has abandoned Osborne on austerity | Liberal Conspiracy http://t.co/ySvcTPdI via @libcon

  13. Legal Aware

    The British Chambers of Commerce was among Osborne's biggest supporters of austerity. Today they've abandoned him http://t.co/0ARmuJu9

  14. BevR

    Even the BCC has abandoned Osborne on austerity | Liberal Conspiracy http://t.co/VI0cAj5z via @libcon

  15. Shakey

    The British Chambers of Commerce was among Osborne's biggest supporters of austerity. Today they've abandoned him http://t.co/0ARmuJu9

  16. Sandra Ayres

    The British Chambers of Commerce was among Osborne's biggest supporters of austerity. Today they've abandoned him http://t.co/0ARmuJu9

  17. post cromwell

    The British Chambers of Commerce was among Osborne's biggest supporters of austerity. Today they've abandoned him http://t.co/0ARmuJu9

  18. Andrew Martin

    The British Chambers of Commerce was among Osborne's biggest supporters of austerity. Today they've abandoned him http://t.co/0ARmuJu9

  19. Howard Dartnall

    Even the BCC has abandoned Osborne on austerity http://t.co/H5B5Mtde

  20. Mark Chesham

    RT @sunny_hundal: Brit Chmbrs of Comm was among Osborne's biggest supporters of austerity. Today they've abandoned him http://t.co/8h2hjSZX

  21. Owen Blacker

    The British Chambers of Commerce was among Osborne's biggest supporters of austerity. Today they've abandoned him http://t.co/0ARmuJu9

  22. smileandsubvert

    The British Chambers of Commerce was among Osborne's biggest supporters of austerity. Today they've abandoned him http://t.co/0ARmuJu9

  23. Brian Tomkinson

    The British Chambers of Commerce was among Osborne's biggest supporters of austerity. Today they've abandoned him http://t.co/0ARmuJu9

  24. Emanuel Stoakes

    The British Chambers of Commerce was among Osborne's biggest supporters of austerity. Today they've abandoned him http://t.co/0ARmuJu9

  25. Paul Trembath

    Even the BCC has abandoned Osborne on austerity http://t.co/H5B5Mtde

  26. Lambeth NUT

    The British Chambers of Commerce was among Osborne's biggest supporters of austerity. Today they've abandoned him http://t.co/0ARmuJu9

  27. spencer bungard

    Even the BCC has abandoned Osborne on austerity http://t.co/H5B5Mtde

  28. lewis wilde

    Even the BCC has abandoned Osborne on austerity | Liberal Conspiracy http://t.co/J1cgdKDl via @libcon

  29. lewis wilde

    The British Chambers of Commerce was among Osborne's biggest supporters of austerity. Today they've abandoned him http://t.co/0ARmuJu9

  30. T

    The British Chambers of Commerce was among Osborne's biggest supporters of austerity. Today they've abandoned him http://t.co/0ARmuJu9

  31. T

    Even the BCC has abandoned Osborne on austerity | Liberal Conspiracy http://t.co/ySvcTPdI via @libcon

  32. Janet Graham

    Even the BCC has abandoned Osborne on austerity http://t.co/H5B5Mtde

  33. NORBET

    RT @libcon: Even the BCC has abandoned Osborne on austerity http://t.co/zQfafv1k

  34. Andy Reed

    Even the BCC has abandoned Osborne on austerity | Liberal Conspiracy http://t.co/WZKRrEiY via @libcon





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