After yesterday’s British GDP data revealed more economic contraction in the second quarter of 2012 than expected, PM David Cameron has promised to earn his stripes and do more, although detail’s on what exactly ‘doing more’ entails were rather thin on the ground.
During an interview for the BBC at Number 10 Cameron stated: ‘We’ve got to do more. We’re going to roll up our sleeves and do everything possible to get business going in Britain, to get housing going, to get jobs going’. Whether these vague assertions will yield actual development remains to be seen, but Cameron then continued; ‘One of the things (the GDP figures) show is the extent of damage that was done to the economy in the boom-and-bust years. We were the ones with the most over-indebted banks, the most over-indebted households, and we had the biggest budget deficit of virtually any country in the world. It takes time to recover from there.’
Whilst Cameron dallied with the media, Chancellor of the Exchequer George Osborne faced yet more criticism over his economic plans failing to bear fruit. Osborne’s fiscal plans have been dubbed too harsh and their expectations unrealistic while banks and households are so mired in debt.
The austerity plan implemented by Osborne in 2010, and later extended for a further two years, foresaw the British economy growing by 2.8 per cent this year. This figure has now proven to be wildly inaccurate.
Osborne was keen to remind the public that: ‘We all know the country had deep rooted economic problems. We’re dealing with our debts at home and the debt crisis abroad.’
Osborne’s opponent, Labour’s Treasury spokesman Ed Balls, was far more specific when it came to the cause of the poor GDP results. In an interview for Bloomberg he said: ‘[Osborne’s] got to admit he’s failed and change course. You should see the risks ahead and act in a risk-averse way. This chancellor is being reckless.’
Economist’s, whilst tactfully avoiding the blame game, have disclosed that they feel Osborne must lighten up on the fiscal stance in the months ahead and act in accordance with the advice offered by the International Monetary Fund.
The question of whether or not Osborne should keep his job in the wake of the GDP results has also been raised. Earlier in the month it was reported that Osborne could be replaced by Foreign Secretary William Hague if the UK’s credit rating is cut. Two newspaper polls published over the weekend also demonstrated a sharp drop in voter confidence, for all the voters who thought Osborne should keep his post, twice as many thought he should be ousted.
For the moment the British economy’s next steps remain uncertain, but with the situation at home and abroad becoming ever more tumultuous, many would argue that it’s high time we stopped saying we’ll ‘do more’ and actually did it.