Jul 25 2012
By Magnus Gardham
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DISASTROUS new figures showing Britain slipping deeper into recession have sounded the “death knell” of Tory economic policy, Ed Miliband said yesterday.
The Labour leader launched a ferocious attack on David Cameron and George Osborne’s austerity drive as GDP figures showed the economy shrank by 0.7 per cent from April to June.
Speaking on a visit to Edinburgh he said: “We are in a deep recession as a country because of this
Government’s economic project.
“I think today marks the death knell of their economic policy.
“We have had three quarters of negative economic growth, the economy is smaller than when they took over and to proclaim it as anything other than a failure is wrong.”
He said Osborne had blamed snow, the Royal wedding, the jubilee and the euro crisis for Britain’s slump but added: “He should stop blaming everyone else and start blaming himself.
“People want action not excuses.”
Miliband said it was an “absolute disgrace” that long term youth unemployment was on the rise across Britain.
He called for a temporary tax cut and a tax on bankers’ bonuses to help kickstart the economy. He also demanded investment in infrastructure projects to help the beleaguered building industry but stopped short of backing Alex Salmond’s call for a £400million cash advance to launch a string of “shovel ready” schemes across Scotland.
He added: “They promised people that the pain they were inflicting would put the economy back on track. But month on month, year on year, we see things getting worse and not better.”
Yesterday’s figures showed a steeper than expected drop in Gross Domestic Product, or GDP, which is the value of goods and services produced in Britain.
The 0.7 per cent fall followed a 0.3 per cent drop in the first quarter of the year and a 0.4 per cent drop in the last three months of 2011. Figures last week showed Scotland had not plunged so deeply into
recession over the same period.
But the scale of the UK-wide fall suggests the Scottish economy will also be stuck in a slump when figures are released in three months time.
The Office for National Statistics, said the extra bank holiday and poor weather from April to June may have hit output. But the biggest cause was a slump in the construction industry, which shrank by 5.2 per cent over the period.
The news came after a record 420 firms went bust in Scotland in the first three months of the year, a fifth more than the same time last year.
First Minister Alex Salmond repeated his plea for cash to get building projects off the ground.
He added: “For a third consecutive quarter the UK economy has contracted – and with the speed of decline increasing, the Westminster Government need to adopt a Plan B and take immediate action to
kick-start the economy in the form of a stimulus to capital investment.”
Grahame Smith, STUC General Secretary, said: “This woeful performance is the inevitable outcome of an austerity programme based on wildly inaccurate analysis of current economic conditions.”
He urged people to join a mass rally on October 20 to protest at ConDem policies.
John Cridland, CBI Director-General, said the figures were disappointing but that there was potential for Britain to get back to growth later in the year.
The dire figures prompted renewed infighting in the coalition.
Senior Lib Dems demanded Mr Osborne is shifted from the Treasury in the Autumn reshuffle.
Panel of Scots give their verdict on how the economy is affecting them
WE asked a panel of Scots three questions about the economic downturn. We asked them:
1 Are you better or worse off than you were last year?
2 Do you struggle to cope financially?
3 How financially secure do you feel over the next five years?
Here a family, a businesswoman, an OAP and a student tell how their lives have been blighted by the downturn.
OAP Nell McFadden, 85, says she is worse off now than she has been in years – despite budgeting throughout her entire life.
The pensioners’ rights campaigner, of Gourock, Renfrewshire, is chairwoman of Inverclyde Elderly Forum and sits on 16 other community groups.
Question 1: “I am worse off now. Utility bills have gone up quite considerably, prices of food have gone up in the shops, while everything has been cut in size, so you get less than you used to, and in the last year or so, I have noticed by the time you get to the till the final bill is far more than it used to be.
Question 2: “I come from quite a poor background, and have always lived on a budget. A budget is part of my life, but recently I have had to budget harder and have to see if there are things reduced in price in the shops.
“I don’t buy anything I’m not going to use, but still have to budget for everything else.
“Older people don’t want to be in debt to anyone, and don’t want a bill coming in we can’t afford, so we have to keep cutting back.”
Question 3: “I can only see things getting worse over the coming years. There has been talk of taking away the pensioners winter fuel allowance. If we had a decent pension in the first place we wouldn’t have a lot of these problems.
FAMILY of four Tony Black, fiancée Claire McMillan and their kids, Abigail, three, and Tony, one, have been struggling to make ends meet in recent times, with the rising cost of everything from food to nappies and utility bills.
Tony, 28, revealed he also had to count on cash loans from his own mum to get by at the end of the month.
Care workers, Tony and Claire, 27, of Riddrie, Glasgow, have a monthly income of around £1500 but have little left by the time they pay their bills..
Question 1: Claire said: “We are definitely worse off than we were before.
“There is stuff we would like to buy now, but can’t because we don’t have any money left at the end of the month after we have paid all our bills.
“Once we have taken care of our bills we only have around £30 or £40 to tide us through to next pay day – and that’s not enough.
“Tony has to borrow money from his mum sometimes, and she is great about it, but other people may not be so lucky to have family they can depend upon.
Question 2: “We are finding it really hard to make ends meet. No one has had an increase in their wages for years, yet practically everything is more expensive, and we are having to face our wages being cut later this year after a pay deal we had in place runs out.”
Question 3: “We rent at the moment and the way things are, we will probably never be able to buy a house.”
Lorna Reid has been self-employed for 20 years, but is finding times tough in the current financial climate.
Lorna has had to make cutbacks, including taking a “staycation” holiday this year.
Question 1: “I am reasonably comfortable, but there are still things I worry about, including rising costs to my business and the way I see it, things won’t be getting easier any time soon.
“I do believe however we are better off up in Scotland than we would be living in England, I trust the
Scottish government more to look after the people of this country than I do David Cameron and George Osborne.”
Question 2: “As a textile designer, I have a large market to deal with, especially in America, so I am fortunate in that way, although it has been tougher to sell there since 9/11 happened.
“I live month-to-month, and as a self-employed person for the last 20 years, its just what I have to do.”
Question 3: “I have never been a person for projecting far into the future, and don’t have any sort of big plan.
“I do budget, and have had to adopt practices, while keeping on developing my business, and changing it in order to survive.”
THIRD-YEAR Aberdeen University student Megan Dunn, 21, is struggling to make ends meet.
The Politics and International Relations student has found herself working up to 20 hours a week in cafes, bars and shops as well as doing a full-time course.
Question 1: “I am definitely worse off now. I have rising student debts and will owe around £20,000 by the end of my degree.
“Combined with rising costs of rent, food and general living, as well as the student debt at the back of my mind, I am in a worse financial place than I have ever been.”
Question 2: “I have worked through the entire three years of my degree, and am constantly finding it difficult to make ends meet.
“A large proportion of the money I do get is spent on rent and students in general could benefit from help with this.”
Question 3: “A lot of entry-level jobs, for example in shops and restaurants, are being taken by graduates, who are being turned down for jobs in their own field, so that means there are less opportunities out there.
“I’m not confident I will be able to find a job which would pay enough to allow me to start paying off my student debt.”