Double Dip Disaster

Last week the Office for National Statistics confirmed that the British economy was officially in a double dip recession as economic output fell for a second successive quarter. This is a disastrous turn of events which indicates we are looking at a Japanese style lost decade where the economy stagnates and living standards are reduced by inflation.

The reality is that the great Austerity experiment launched by the Tories and Lib Dems in London in its efforts to clean up the shambles left by the last Labour Administration is exacerbating the economic difficulties.

To give you a scale of the catastrophe, output is now 4.3% less than its peak in 2008. This makes it a longer lasting recession than the great depression of the 1920s. Worse is still to come, with 90% of the Tory/Lib Dem cuts yet to come equating to basically a million public sector jobs and £80 billion in investment.

The response of the London political elite has been typically evasive. Apparently it’s all Europe’s fault. Exports only contribute a woeful 15% of GDP due to Labour’s decimation of manufacturing and its obsessions with the rich bankers – which indicates that difficulties are far more domestic in their nature.

In short consumers are maxed out on their credit cards and we are still seeing the painful adjustment which follows the irresponsible housing bubble that Labour allowed to develop unfettered. The salvation won’t come in the purchasing power of ordinary people.

With government spending being slashed by an incredible £80bn during the course of the current comprehensive spending review, only private investment by businesses can kick start a recovery. But evidence suggests those companies that do have money to invest are sitting on their loots, waiting for matters to improve.

Austerity is failing yet the response of the political right (who never leave a good crisis go to waste) is to call for an austerity max solution based on dismantling workers rights and even more spending cuts and higher unemployment.

This is insanity. With the Labour party refusing to overturn any Tory cuts if they win the next Westminster election we are in a desperate situation.

Wales needs control over those key job creating leavers, and following the devolution of corporate taxation to Northern Ireland in this years Budget Finance Bill, I’ll be calling in Westminster for the Silk Commission recommendations to be implemented next year rather than being kept in limbo for a new Government of Wales Bill after the 2015 elections.

One Response to “Double Dip Disaster” [latest first]

  1. “We’re all in this together”, as they say, we share the pain – except the RICH – who as the +Sunday Times rich list has shown has increased its wealth by 5% in a year!

    Of course, a lot of them do not pay tax in the UK – Mital for instance, who tops the list , is a ‘non-dom’ although he enjoys all the benefits of British citizenship while avoiding all the costs.

    Just how much will the (real) people stand for? And when will they realise that Labour don’t care about them?

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