Although sometimes implied in public debates, deficit reduction and growth are not alternatives. Both are essential for Britain’s prosperity and economic stability. On either count, George Osborne is failing.
In 2010, George Osborne inherited an economy that was growing at 0.7 per cent. Later that year he ignored the advice of many economists and set out plans to close the deficit within four years rather than eight. He also failed to set out a coherent growth plan, predicated on investment and jobs in the green economy that his party once championed.
The result, plain for all to see, has been a double dip recession. The economy has contracted in each of the last three quarters and has eliminated all of the limited increases in GDP made in the first year of Osborne’s tenure.
While extreme weather events and national occasions like the Olympics or Royal Weddings can explain dips in single quarters, it is Osborne’s dogmatic approach to spending cuts that has sapped confidence from businesses and consumers as well as directly taking demand out of the economy.
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