Even Tory MPs think the economy won't get better

Conservative MPs do not share George Osborne's optimism that the economy will pick up in the second half of this year, according to a new survey.

In a fresh setback to the Chancellor, the ComRes poll of 150 backbenchers for The Independent found that only one in four (26 per cent) of Tory MPs believes economic growth will improve over the next 12 months. Four in 10 (39 per cent) of Tories think it will stay the same and a third (34 per cent) predict it will get worse.

Official figures issued on Wednesday showed that the economy shrank by 0.2 per cent in the final three months of last year. Several ministers are now resigned to another negative growth figure in the first quarter of this year, which would push Britain back into recession.

Mr Osborne's hopes of a short downturn followed by a bounce back to secure a low level of growth in 2012 as a whole, are not echoed in Parliament. Overall, only 17 per cent of the representative sample of backbenchers forecast that growth will improve; 53 per cent say it will get worse and 27 per cent believe it will stay the same.

MPs are no more optimistic about unemployment. Overall, almost eight out of 10 (78 per cent) think the jobless figures will get worse over the next year, while only 6 per cent believe they will improve and 13 per cent say they will stay the same. Conservative MPs are slightly more upbeat than their Liberal Democrat and Labour counterparts. Some 11 per cent of Tories think unemployment will fall – compared with 1 per cent of Labour MPs and none of the Lib Dem MPs surveyed.

But two out of three Tories (67 per cent) predict that the dole queues will get longer, along with 91 per cent of Labour and 74 per cent of Lib Dem MPs.

Differences between Tory and Lib Dem MPs over the best way to secure growth emerged yesterday after Nick Clegg called on the Chancellor to speed up the Coalition's plans to raise the personal tax allowance to £10,000 a year.

Treasury officials raised eyebrows at the Deputy Prime Minister's unusually public statement of what he wanted to see in the March Budget. But Downing Street did not reject the demand, saying David Cameron had seen Mr Clegg's speech in advance.

Some Tory MPs insisted the priority should be tax cuts for businesses rather than individuals, saying that lower national insurance contributions for employers would spur growth and create jobs.

David Ruffley, a Tory member of the Treasury Select Committee, said raising tax thresholds could drag more people into the 40p rate of tax. "We're not in the business of hitting the striving classes. People who are paying 40 per cent tax are earning just £42,500. That's not rich," he said.

Addressing the Resolution Foundation think tank, Mr Clegg made a strong plea for Mr Osborne to consider the Lib Dems' plan for a mansion tax on homes worth more than £2m. He said: "The mansion tax is right, it makes sense and I will continue to make the case for it. I'm going to stick to my guns."

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