Today we got the first quarter figures for the UK economy. They made for less than happy reading: although there was 0.5% growth, this came on the back of a 0.5% contraction in the previous quarter, that having been put down to the severe weather in December. So over the last six months, there has if anything been a slight drop.
With the spending cuts just coming into view, that is not good news. So how has the so-called Taxpayers’ Alliance (TPA), which is clamouring for yet more cuts, spun the news? Head non-job holder Matthew Sinclair, who actually believes in Ricardian Equivalence as a fact even though it isn’t, attempts to produce a fog of whataboutery and thus avoid discussing the elephant in the room.
The growth that there has been, in areas like transport, could easily be accounted for by higher rail fares and catching up on work not done during December’s cold. Finance sector growth may be down to end of tax year activity, and any growth in the Government sector may be the bills coming in, again, at the end of the financial year.
In other words, that growth may not carry through into the second quarter of the year. Sinclair focuses on the construction sector, having to dredge up a Tweet from a Maily Telegraph hack to try and stand up the assertion that it’s just a little volatility. As spending cuts start to bite in the new financial year, it could turn out to be rather more than that.
Otherwise, Sinclair suggests that the UK’s performance is “average”, but fails to cite any figures in support of his assertion. Although he is urging yet more spending cuts, the thought that these might harm growth does not enter. After all, he represents an Astroturf lobby group that has urged lowering of the poverty line, and would abolish the minimum wage, which together would remove enough spending power from the economy to do it serious harm.
Thus the TPA fails to notice the elephant in the room: the economy is stagnant, the Government is about to enact cuts and throw tens of thousands out of work, and all that Sinclair and his fellow non-job holders can do is whine about the 50p tax rate, suggest that folks have somehow factored in the cuts through a lowering of confidence, and spin the tale of “an L-shaped recovery”.So what the TPA’s finest is saying is that he doesn’t have a clue. No change there, then.