Recovery? What Recovery?
Unions reminded backslapping Tory leaders that Britain is in the grip of the worst economic crisis in a century despite 0.6 per cent growth in the last quarter.
Tiny boosts in construction and manufacturing sector were partly behind the slight respite for the battered economy.
Smug PM David Cameron claimed on Twitter that the figures showed Britain is “on the right track” and insisted his government is “building an economy for hardworking people.”
Tory Chancellor George Osborne said Britain’s gross domestic product (GDP) was “better than forecast” but failed to mention that it is still 3.3 per cent below pre-recession levels.
TUC leader Frances O’Grady reminded the pair that the economy has grown half as much as they boasted it would when they cobbled together the Con-Dem coalition in 2010.
“It’s a measure of how poor the economy is faring that this level of growth is being welcomed,” she said.
“With workers in the midst of the longest wage squeeze since the 1870s and unemployment still over 2.5 million, it certainly doesn’t feel like a recovery to many people.”
Labour shadow chancellor Ed Balls pointed out “this is also the slowest recovery for over 100 years” despite the fractional shift forwards.
He said Britain would need to seal 1.3 per cent growth every quarter for the next two years “simply to catch up all the ground we have lost under David Cameron and George Osborne.”
Overall output in construction and manufacturing remains more than 10 per cent below pre-recession levels despite progress in the last quarter.
Manufacturing recovered by 0.4 per cent after slumping consecutively for the last six quarters and the 0.9 per cent rise in construction is eclipsed by the 1.8 per cent fall in the first quarter.
Construction union Ucatt labelled the figures “disappointing” and general secretary Steve Murphy reissued his call for “urgent” investment in infrastructure projects and social housing.
There was also a 0.6 per cent growth in the service sector but concerns were raised that companies are hoarding billions of pounds that could be invested to spark real growth.
Left Economics Advisory Panel co-ordinator Andrew Fisher said privateers have amassed the surplus, equal to 6 or 7 per cent of GDP, thanks to successive cuts to corporation tax and by slashing workers’ wages.
“Companies are quite logically refusing to invest substantially in new products, services or jobs at a time when consumer demand is depressed by falling living standards,” he said.