David Blanchflower: David Cameron's economic gibberish

The PM’s speech to the CBI was an insult to the intelligence of his audience


The CBI, was much in the news last week. Of particular note was the publication of new data from its industrial trends survey that suggested that the UK is heading back to triple-dip recession. The CBI found that manufacturers expect to reduce output over the next three months, while overall orders are relatively flat. Of the 409 manufacturers responding, only 19 per cent expect to increase their volume of output over the next three months and 28 per cent expect it to fall. The resulting balance of minus-9 per cent marks the lowest prediction this year. This suggests GDP growth in the fourth quarter will turn negative again.

Plus there was the Prime Minister's trite and empty-headed speech to the CBI's annual conference that warrants careful examination as it was supposed to have been about how to generate growth but wasn't. It was an insult to the intelligence of its audience of businessmen who wanted to hear how the government intended to raise business confidence. Sadly it was full of platitudes and incomprehensible gibberish but had no substance, as I will outline below. I was hoping to hear an announcement of some policy initiatives but all we got was flimflam as the economy tanks. There were many jewels in the speech but I thought I would examine the 13 worst bits of drivel. Let's start with the worst of the worst.

1. "There's not a job in the world where you don't need a good grasp of English." Has he ever been abroad? Firemen in Montevideo, farmers in Borneo and street cleaners in Cairo come to mind. LOL.

2. "You need us… to have a proper industrial strategy to get behind the growth engines of the future." I haven't the faintest clue what "getting behind the engines of the future" means. Surely we would want to be investing so we can be the ones inventing the engines of the future? Why would we want to be behind the future anyway? Twaddle.

3. "You need us to be tough. To be radical. To be fast. I'm going to tell you what that means. First, you need a government that is tough." No; what is actually needed is a government that is competent, which this one isn't. Being tough has caused so much unnecessary pain. Borrowing is rising, not falling, and the economy is shrinking.

4. "But here's the thing. Being tough on the deficit doesn't mean being simplistic – salami-slicing budgets and taking an axe to everything." Sadly that is what the Government has done. There are no growth sectors. None. Slashing public investment has crippled the construction sector.

5. "It's got to mean prioritising the right things, backing enterprise, growth and business, even in the teeth of fierce opposition. That's what we've done." No, actually you haven't, as the economy is shrinking. There is no evidence you have backed enterprise, growth and business, the evidence is the opposite. Three of the last four quarters have been negative and less than half of the output drop in the recession has been restored. In output terms this recovery is the slowest in 100 years and much worse than in the thirties.

6. "Interest rates at record lows. A million new private-sector jobs created in two years. Exports up dramatically." Actually interest rates are at historic lows as there is no growth and there is no chance the Monetary Policy Committee will raise rates. It has nothing to do with the credibility of the coalition's strategy but much to do with the fact that the MPC is buying most government bonds. One million private-sector jobs have been "created" only by fiddling the data; 200,000 jobs in further education and sixth-form colleges were reclassified from the public to the private sector in June. Plus export volumes are lower today than they were a year ago or two months ago. So not true.

7. "We've been utterly intolerant of failure too… And we're having an all-out war on dumbing down too." I believe the count is 37 U-turns so far, including aircraft carriers, pasties, grannies, forests, caravans, school milk, EU veto, circus animals ban, petrol duty and badgers. It is clear these U-turns have come because the policies were not thought through in the first place. Dumb and dumber.

8. "So this government has been tough and we've been radical. But there's something else you desperately need from us, and that's speed because in this global race you are quick or you're dead." What? Not sure what the quick and the dead have to do with economic growth.

9. "And this goes all the way to the top. The Cabinet I chair is now a Growth Cabinet. I go around that table and hold people to account for progress on everything from superfast broadband to housebuilding, in a way that has never happened before. But we need to do more because government can still be far too slow at getting stuff done." But still the government has no growth plan.

10. "Now let me be clear: over the past two-and-a-half years I've worked with exceptional civil servants who are as creative and enterprising as any entrepreneur." And then he fired them all.

11. "Well, this country is in the economic equivalent of war today and we need the same spirit. We need to forget about crossing every 't' and dotting every 'i'." You must be joking. Not dotting the 'i's and crossing the 't's is what got you in trouble in the first place and probably explains most of the 37 U-turns.

12. "And I'll tell you why. Not for our country to climb the ranks on some global leaderboard for the sake of it but for the sake of our people and their aspirations." I assume this is in the speech just for the sake of it. I have no idea what this means. Total gibberish.

13. "This is what it's all about. Getting Britain on the rise. Helping our people thrive. Building an economy that's not just worth something but worthwhile. And we'll build it together." More meaningless gibberish.

It is clear that David Cameron hasn't the slightest clue how to get the economy growing again. We should expect more from a Prime Minister who seems to think it's okay to insult our collective intelligence. The country needs another U-turn.

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