James Moore: Is Mr Osborne trying to tip us off a cliff with his deficit shock therapy?


Outlook George Osborne was talking tough yesterday, with a nod to the heroine (Mrs Thatcher) whose name he dare not mention in public in case it upsets the voters. "We will not be blown off course by the weather," he boldly proclaimed, as the economy nosedived into a tailspin.

Because while it us certainly true that the cold snap had an impact on the UK's GDP growth in the fourth quarter, economists had already factored that in when they forecast anaemic growth of about 0.4 per cent. Even if the snow had stayed away, the ONS said growth would have badly undershot that – if GDP grew at all. It seems there is something much nastier going on in the economy than a bit of cold weather.

And that's not the worst of it. As this column pointed out yesterday, these figures cover the period before the Government's spending cuts, announced last year, really start to bite. The VAT rise to 20 per cent will take money out of the pockets of consumers who are already faced with wage rises that will not come close to matching inflation, if they even get a rise.

But the laddie's not for turning. There won't be any changes made because of a bit of snow, even if the economy's problems are actually far more deeply-rooted than that.

There is no doubt action needs to be taken to reduce Britain's gargantuan budget deficit. But the trouble is that the Government appears to have adopted, in the words of one economist yesterday, a "satnav approach" to policy, like one of those old-style machines that had people driving into the sides of buildings or rivers for a most unwelcome (double) dip.

It is early days, of course, and the numbers may yet be revised upwards. The current quarter may show that this is a blip. But, equally, it may not. No wonder Ed Balls was struggling to stop himself from smiling (he really shouldn't, he has the sort of leer that frightens small children) as he toured the television studios yesterday. His new job picking holes in Mr Osborne's policies could hardly have got off to a better start.

Mr Balls shouldn't be allowed to forget the role he played in getting us into this mess. But the best of it is, he may be right when he argues that the medicine Mr Osborne is administering will make the disease worse. If Chancellor Osborne doesn't want to give his bumptious shadow a second bite of the cherry in three months' time, he has some thinking to do. He should start by looking at the highly-suspect decision to raise VAT, not least because the strains on people's finances mean that it might not raise him much, if any, extra revenue.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
Life and Style
love + sex
Voices
A propaganda video shows Isis forces near Tikrit
voicesAdam Walker: The Koran has violent passages, but it also has others that explicitly tells us how to interpret them
News
people
Sport
football
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Graduate Application Support Analyst

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Reach Volunteering: External Finance Trustee Needed!

Voluntary post, reasonable expenses reimbursed: Reach Volunteering: Would you ...

Christine McCleave: FP&A Analyst

£36,000 - £40,000: Christine McCleave: Are you looking for a new opportunity a...

Recruitment Genius: Sales Executive - OTE £40,000

£15000 - £18000 per annum: Recruitment Genius: This is a great opportunity for...

Day In a Page

Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

Climate change key in Syrian conflict

And it will trigger more war in future
How I outwitted the Gestapo

How I outwitted the Gestapo

My life as a Jew in wartime Berlin
The nation's favourite animal revealed

The nation's favourite animal revealed

Women like cuddly creatures whilst men like creepy-crawlies
Is this the way to get young people to vote?

Getting young people to vote

From #VOTESELFISH to Bite the Ballot
Poldark star Heida Reed: 'I don't think a single bodice gets ripped'

Poldark star Heida Reed

'I don't think a single bodice gets ripped'
The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
Families clubbing together to build their own affordable accommodation

Do It Yourself approach to securing a new house

Community land trusts marking a new trend for taking the initiative away from developers
Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

Money, corruption and drugs

The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

150 years after it was outlawed...

... America's first slavery museum is established in Louisiana
Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
Tony Oursler on exploring our uneasy relationship with technology with his new show

You won't believe your eyes

Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

Moores must go. He should never have been brought back to fail again

The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn