to be depressed about the Tories response to the latest news on the economy

[dikkertjedap]

How can you brush off such serious news? The pound is further plummeting, not really good news given how much we import ... All but two sectors are contracting, including finance to which tax payers are so exposed. Inflation is soaring, household budgets are under severe strain and there is a lot more to come. All the big cuts still have to bite, like all the planned public service cuts ... all the people who are going to be made redundant will not have spending power ... so we are all going to suffer even more: less spending/ less demand so less need for expensive home made products and more demand for cheap chines imports.

I feel so sad, are we heading for the worst and deepest recession in years????

But the people employed in mining and steel paid taxes, spent money in shops, kept local pubs in business, bought cars, and provided working role models for DC & GC.....They don't now!

We were never as rich as we thought we were so going back to our actual income was always going to be a shock.

I have something clever to say on this point, really I do, I promise.

But because I can't think of it right now I'll just say this.

The coalition (and let's face it - The Tories) are in power now. It's really cowardly to carry on blaming everything on Labour and the previous government and it's useful to no one. (Well maybe not no one - the bankers still seem to be pretty ok)

Where are the useful responses?

Sorting out a deficit is not as simple as 'cutting public expenditure'. Cuts that lead to contraction or sluggish growth will incur increased borrowing, because tax revenues go down. Stimulus that leads to solid growth will incur lower borrowing (as in the last quarter of Alistair Darling's watch as chancellor). If we get a double dip recession, or even flat, sluggish growth, the deficit will get worse.

The figures today (a contraction of 0.5%) that Osborne said were 'entirely' due to the cold weather don't even INCLUDE consumer spending which is the most likely area to be hit by the snow. The true figure is likely to be worse. This figure, given that the cuts and VAT rise are not biting yet, is down to reduced confidence, and reduced spending because of what is to come.

Osborne needs to learn some economics, get his silver spoon out of his mouth, and listen to some of the business leaders and economists who are saying Beware. He could even listen to Ed Balls who said today "Don't blame the weather, get a plan B FAST"

Agree MummyBerry - you can sit here for all eternity and go "well, Brown sold the gold" "so? Thatcher closed the mines" "So? Macmillan did blah" all the way back and back and back until the Normans. Or before even.

The blame game doesn't benefit anyone (apart from politicians) as it deflects scrutiny from those in power now who have a responsibility to make decent and well-judged decisions so that the UK doesn't get into worse shape, and has some hope for the future.

To add - the only way out of a massive hole like this one is to cut expenditure that won't inhibit growth, and to stimulate through investment areas that will encourage growth. They're cutting everything (the steel works in Sheffield was a classic example, when the LOAN was to equip them for making specialist parts for nuclear power stations - shortly before announcing plans for 8 or 10 new nuclear power stations. We will now have to import the parts from the Far East), and investing in nothing. So, they are reducing public spending, and unless they are unbelievably lucky, will make the deficit worse.

But the tories will always blame labour. They were still trotting out that line in 97 after 18 years of conserative government.

An uncomfortable truth, brushed under the carpet MummyBerryJuice?

You'd be hearing it a lot less if Labour werent being so opportunistic and shameless in the way they constantly attack without having a credible plan themselves. They are playing party politics while the country is on its knees.

I'll be happy to put up with Balls smug face if he comes up with a credible alternative that wasnt just the opposite of whatever the Government are doing.

I really think we should call it the 'government' from now on. Coalition, ConDems etc doesnt sound nearly permanent enough :)

I agree that blaming one government or the other government does not get anybody anywhere. It is simply irrelevant at the moment (given that there is no election). But I do think that a plan B is needed and it is needed fast. It is not just Ed Balls saying this, what matters more is that the CBI is equally concerned. The Euro should be struggling against the pound, given the mess of its periphery, but that is not what we are seeing. The pound is struggling because the UK is lacking credibility - this is extremely serious. Given that the UK imports so much and exports so little this is not really good news at all. Also, the rumours that the government is happy with a weak pound, cannot be helpful as it only further undermines the pound's credibility. Will the UK ultimately join the Euro at an awful conversion rate in order to keep afloat, please let that not happen.

Those of us of a Keynesian bent would say - well, did say - that cutting public spending, and taking money out of the economy, is not the way to get out of a recession.

I mean, we did have a warning in Ireland, who drastically slashed spending and tanked their economy completely; but Osborne saw that as an example and couldn't wait to follow suit. What's that expression - "insanity is doing the same thing twice, and expecting a different result"?

That, and what Lilybolero said.

dikkertjedap - with the electoral maths the way it is, there's no way a Conservative-led government could take us into the euro, their party would implode.
(BTW, your name sounds like it means something really interesting, tell me it isn't just 'Dutch mum' or something!)

I agree the tories are a bunch of idiots. We need a plan B ourselves..
Um, storm the houses of parliament?

Heres the news. Looks like Labour's policies were getting us out of recession, and the tory ones coming into effect are plunging us back for a double dip. Nice one Tories!!

Heathen Yep I think most economists said that (and basically anyone who knows anything about economics, or took the trouble to find out).
The tories are idiots who dont listen.

So plan Bs so far:

• join the euro. Quite like this one.

• leave the uk and move to europe (somewhere sunny) :).

• UK sinks into massive idiot driven recession, hard life of austerity, everything owned/controlled by the state sold off, the entire population sold off into slavery, exposed to the wildest vagarities of the markets.

"We need a plan B ourselves.."

No shit lifeinlimbo - Tories have been ripping the guts out of Labour over that for months.

Finished yet? We're all dying to see it!

Those saying labour don't have a plan - the economy was recovering under the Darling plan of halving the deficit in 4-5 years (and this was the libdem plan too - hence this plan got more votes in the election than osborne's sell everything, cut everything plan.).

There is no point them having a detailed plan for 4 years time, as who knows what mess we will be in then. Their general philosophy of a shallower, slower range of cuts with investment for growth is still their plan, and Osborne would do well to look at it, look at the figures, and to listen! Simply repeating ad nauseam "it was the coldest december for 100 yrs" and "we will not be blown off course by bad weather" (4 times in 1 three-minute interview) is not going to make the figures look any better.

Since they took over, unemployment has risen, inflation has risen and the economy is poised on recession.

Wheres your plan? Come on! We're all waiting.

Well my plan B:

• more support for small and medium businesses (with good business plans, clear strategy, good customer research in place and possibly a requirement that they have been going for X years to avoid tax payers funding large numbers of businesses which may go bankrupt in the first year)
• lower VAT - high VAT hits those who have the least the most, it is an unfair tax especially in the current climate

• reintroduce tax deduction on mortgage payments for houses up to a certain value

• stop this madness to give GPs all these powers by abolishing PCTs, I think a lot more work needs to be done before making such drastic and far reaching and possibly irreversible changes

• stop plunging money in ridiculous infrastructure projects such as High Speed 2 as there is no clear cost benefit analysis undertaken and they will come at a huge cost to the taxpayers in the end

• most importantly, get a top team together to identify UK manufacturing potential and then support that and stick to it for a number of years

• green energy is too late now, Germany got in first and they are now one of the world leaders together with Scandinavia, so just a waste of money as you won't be able to compete, they have all the key patents

• properly regulate the utilities which are allowed to rip of customers by their sleeping regulators, why is the UK so much more expensive than the continent and the service so much worse??? Surely, with Ofgem, Ofwat, Ofcom, Postcomm, OFT, CAA, Rail regulator, Competition Commission, so many bodies, and nothing seems to be done. Most countries on the continent have far fewer bodies, better and more affordable services. I believe in free markets, I believe in competition. But this is neither a free market nor is there competition. These are still protected monopolies enriching themselves at the expensive of consumers and businesses.

Well, this is just for starters, but I am sure there are many other things that can be done and should be done.

on things that we're still good at...

Arts and Culture was worth 3.7% of GDP in 2007, at £86 billion. employs over 1.4 million people directly and contributes to tourism.

but, the Tories are about to shred that growth area too.

and any education in this area is also being cut; all in the name of ideology rather economics and practical value.

LilyBolero - I can see that argument for Labour not having a plan for what they would do in 4 years.

They still need a plan for now otherwise the debate is

"Look! You're fucking it all up!"
"Yeah? Well what would you do then clever clogs?"
"Ummm. Something different?"

Plan B... OK... Off the top of my head:

• Worry about cutting debt after economy stabilises

• Hold off on rearranging the NHS, reorganising things always costs £££ and takes a few years before any cost savings emerge

• Invest in manufacturing, which actually seems to be doing reasonably well; esp high-tech stuff like LilyBolero said

• Tobin tax? (requires international cooperation)

• Stop shouting about how desperate a situation we are in and how brutal cuts are going to be because everyone gets scared and stops spending money

Oh, and we should all go out and buy a new sofa. Or some shoes. Or a bike, so we can get on it and look for work in a few months time...

dikkertjedap I'll vote for you!

One thing we shouldn't do is talkj down our manufacturing base too much - as of 2008 (the last year I have seen figures for) we were the 6th biggest manufacturer in the world.

It's possible we've slipped since, but it' not like we have no manufacturing base.

investing.curiouscatblog.net/2009/10/13/data-on-the-largest-manufacturing-countries-in-2008/

Well, so far MNers seem to be coming up with much better suggestions than Osbourne. Maybe invite him over for a webchat and we can share our views with him.

Thanks dikkertjedap. Its a fair list too :)

I think the government are trying to help small businesses. Its just that banks wont lend to them, but they are trying to sort that out with this Project Merlin(?) thing.

"Worry about cutting debt after economy stabilises" - TheHeathenOfSuburbia

Without a credible starting-now deficit plan, we'd have been slaughtered in the money markets. Internationally the governments plans have met with huge approval.

UK manufacturing