UK car sales in June were 10.9 per cent up on 2009 while the latest British Chambers of Commerce survey, one of the most accurate barometers of a UK economy still dominated by small companies, forecasts growth of between 0.6 and 0.7 per cent in the three months to June, ahead of most gloomy predictions.
Yet all the extremely loud messages from the new coalition government and the Treasury are that the country is headed for the knacker’s yard with only ferocious spending cuts and tax rises (about which it doesn’t make so much noise) available to save us.
Just as Labour’s Gordon Brown, when he was chancellor, went in for hefty doses of social re-engineering under the guise of economic management, so it seems is Tory coalition chancellor George Osborne.
Osborne appears determined to shrink the state just as Brown enlarged it.
This may be no bad thing in the medium term but it’s likely to be a very bad thing indeed if he derails the growth that’s clearly present in the economy. There are already a slew of profit warnings from companies dependent on the public sector for contracts and we haven’t seen the half of all the planned cuts yet.
It’s all very well shifting the growth emphasis from the public to the private sector but not if the cost is the private sector having a bigger slice of a much smaller overall cake.
Will his boss prime minister David Cameron tell George to lay off a bit when he announces his slashing and burning in the autumn spending announcements?
The case for reducing the deficit has been made and accepted. Now surely is the time for a bit of pragmatism.