by Pat McFadden

When this government was elected they decided to cut public spending sharply and ditch Labour’s industrial strategy at the same time. The first obviously got the lion’s share of the headlines, but two events in recent days have highlighted the folly of their second decision.

First, Sir Richard Lambert chose his final speech yesterday as director general of the CBI to bemoan the lack of vision from the government on what the future UK economy might look like, or any plan for the future. He talked of politics triumphing over sensible policy on a range of issues from aviation policy to the immigration cap to the cash starved local enterprise partnerships, which are being set up in place of regional development agencies. As Sir Richard pointed out, “it’s not enough just to slam on the spending brakes. Measures that cut spending but killed demand would actually make matters worse”.

Second, this morning’s GDP figures came as a shock to markets. And George Osborne’s attempt to blame the snow will fool no one. The really worrying thing about today’s figures is that they come before the impact of the VAT rise and the spending cuts which will kick in from March. Rather than snow, I suspect the real impact has been on confidence, which is why responsibility must lie at the door of the government. (more…)