Gathering storm

George Osborne boasts his economic miracle has left us basking in economic sunshine which will only get warmer. But in the real world, the economic storms are building.

Last week George Osborne was warned that his spending review and autumn statement were built on an economic future seen through rose tinted spectacles. The Institute for Fiscal Studies told him he would have to be very lucky for his ‘plan’ to stack up in the real world.

His luck and his boasts lasted a day.

How is, for example, the ‘march of the makers’ doing?

The engine house of the economy – UK manufacturing – is now in recession, with falling growth in the last three quarters. That’s right – UK manufacturing is officially in recession.

We know this because of the hard facts supplied by the Office for National Statistics. So Osborne has forced his makers into marching backwards.

And how is George the builder doing? After his boast last week that ‘we are the builders’.

The day after the boast we found that construction sector growth in the third quarter of 2015 had dropped by 2.2 per cent. It’s the worst performance for construction for three years.

Within months of boasting at Tory Party conference that he was George the builder, he’s pushed that sector into going backwards as well.

And what of his big campaign to boost exports, selling UK made goods abroad? This was to ‘rebalance’ the economy so that growth came from exports rather than home made consumer borrowing and spending.

Imports were up 5.5 per cent in the last quarter. Exports rose a miserable 0.9 per cent.

Watch out for the boast that exports are rising – its true. But very misleading without a mention that imports are rising five times faster.

These figures – what we buy in from abroad compared to what we sell abroad – are horrendous. We now have the worst balance of payments deficit since shortly after the end of the Napoleonic wars (it might even be worse).

It dragged down our economic growth by 1.5%. The worst ever impact on our economy.

So the export drive and rebalancing the economy? It’s got worse after George’s great export drive. And the rebalance with consumer spending. That’s worse as well. More spectacular Osborne failure. His six years of austerity have hit our economy and people hard.

When you take out the impact of population growth – which has been strong – our economy has grown weakly. Only now are we producing more per head of population than we were before the banking collapse and the financial crash.

In the real world, none of this is much to boast about. You would think.

Tony Burke, Unite assistant general secretary said: “The big talk and the loud boasts are a smokescreen for a thoroughly failed Chancellor. He has an embarrassingly bad track record.

“The miracle is not our economy. The miracle is that Osborne has survived and heading to be the next Prime Minister.

“UK manufacturing is a major part of our economy. It needs to be treasured and nurtured rather than being mentioned in a speech and then neglected.

“There is no economic plan or plan for manufacturing., both are desperately needed. This is a failure of Osborne and successive coalition and then Tory ministers.

“Construction is also now being hit by the curse of Osborne. It is a critical part of our economy, and its impact goes way beyond its sector alone.

“We need a huge drive – well beyond what Osborne has outlined – to get building again to really tackle the homes shortage which gets worse with every year.

“Osborne is a serial failure as Chancellor. We need to strip away the spin, the smoke and mirrors.

“The UK needs to get back to really making and building and exporting again. That will need a real plan, significant investment and genuine commitment, none of which we are getting from this government.”