Monday, 4 May 2015

The Tories have claimed that their strict austerity programme has resulted in them now outstripping their rivals in GDP growth. The truth is that their austerity programme resulted in the UK being the last among the major economies in cancelling out its drop in GDP resulting from the Credit Crunch, that in fact it took the UK until last year to wipe out the 5.2% fall which occurred in 2008.

In contrast, Sweden - with a figure close to that of the UK  of minus 5.6 to the UK's minus 6.0 drop - cleared its deficit in 1 year; the USA and Germany in 2 years.  Sweden did this by introducing a type of policy similar to job creation.  

What seems to have been kept virtually a secret by the media is that some years ago the International Monetary Fund (IMF) strongly criticised the UK's severe austerity measures, as they were aimed at the wrong targets, would make the poor worse off and not create the stable conditions required for a healthy economy.  

On 5 August 2013 "The Independent" in a full page article headed "Rivals leaving Britain behind in global race for recovery", stated that the IMF data showed that the UK growth will trail most other major economies by the end of the Coalition's term in office.  What is now obvious is that the Tory dominated Alliance used the Credit Crunch to introduce its doctrinaire policies to help achieve its aims of a low wage economy, and a reduction in the functions of the State in favour of big business.  The chart below allows interesting comparisons.  Only France of our serious competitors employed similar tactics to the UK and are still struggling.

On the morning of 16 April 2015 the BBC News reported that the IMF had said the UK would not achieve its promise to clear its deficit in balancing its yearly budget by 2018, which is contrary to what the Tories have now forecast in their Election Manifesto.  Labour have endorsed the Tory plans to steer the same austerity course if they are elected. This report by the IMF has thrown a spanner in the works of both parties election strategies.  

As the day wore on, this important news disappeared from the news headlines, and what completely surprised me most of all was when it failed to surface on Eddie Mair's news discussion programme at 5:00pm on Radio 4.  The following morning came the news that the IMF now said that what was originally reported was misinterpreted and that the IMF had praised the "balanced measures" which the UK had taken!

From my close study of this issue, I have no difficulty in accepting which version is correct.

[NB  In 2014, Scotland's growth figure was 0.2 % higher than the rest of the UK.]