The week started with the CBI’s Sir Richard Lambert warning about there being no growth strategy. As if right on queue the economy reduced it’s growth by 1.2% to contract by 0.5%, the worst possible news for George Osborne’s economic policy.
Perhaps Sir Richard Lambert knew something we didn’t, but it took the government and economic “experts” by surprise on both sides of the political divide, and shaking the confidence of the coalition for the first time. Bad news for the coalition has continued for the last 2 weeks, but only now is it becoming more substantive with real opposition.
The cuts are becoming a reality with announcements of job losses everyday in council’s all over the country. With the loss of citizen advice bureau’s in Birmingham at a time when they are most needed for vulnerable people; the reduction of money for sure start leading to redundancies and the lack of care ; and constant stories of the disabled and mentally ill being threatened with benefit and public service cuts.
The polls are also looking bad. The worst figures both for the government’s support and for David Cameron’s approval rating.
NHS support is also very low, largely because no one knew that this government was thinking of such wide ranging reform because they did not tell anyone prior to the election!
Then to Davos – David Cameron has been talking tough (and down) to other European leaders, a bit difficult when the UK economy has just experienced terrible economic figures and rising unemployment! Meanwhile Germany is growing by 4%, has lower unemployment and is expanding it’s manufacturing base, and exporting to the likes of China.
The USA in contrast are embracing Keynes at present, although with a banker currency they can afford to, while many economists and speculators are talking about a “plan B” for the UK economy.
However, George Osborne is “not for turning” , but is now talking about growth for the March budget. After 8 months of talking about nothing but austerity, no wonder the consumer confidence is rock bottom in the UK.
The Banks are still spending their bonuses in cloud cuckoo land according to Robert Peston, his tweeting updates have been a real insight into the goings on. All very interesting, but it does not seem that we are any closer to getting a real lasting reform of the banking system than we were a year ago. (see link to previous post)
But now for brighter news, Egypt. Amazing scenes as genuine people power pour’s onto the streets risking literally life and limb for real freedom. It is too early to call how it will go, but many cannot resist the idea that this is a “Berlin wall” moment. I hope it is. It is a shame that such suffering has to be endured before change can happen.
This is obviously tricky news for the US that gives around $2 billion in military aid to Egypt every year. The US administration is sitting on the fence at the moment seeing which way it will go. Their dilemma is clear, they would rather support a dictator friendly to the US than a democracy that elects an anti-west or/& an anti-Israel government. The US is very selective about when it likes to support democracies.
We should all be wary though, as when ever there is a power vacuum, it is by no means certain that benign political forces will take over. The military is traditionally strong, and another form of dictatorship and oppression could be just around the corner.
I wish the Egyptians well.