The Queen’s Speech contained precisely nothing to help growth in the economy. It set out a feeble programme. The Government talk about growth but are doing precious little to achieve it. We have all noticed the change in rhetoric over the past few weeks; growth is now important. It is not enough to hope for growth or will it and then fail entirely to introduce in the Queen’s Speech the policies that would deliver it.
We are now in the absurd situation where we have gone from the Chancellor upgrading his growth forecasts in the Budget in March to the announcement of a double-dip recession in April and warnings today from Marian Bell and Howard Davies, formerly of the Bank of England, that the Government might have to slow their deficit reduction plan before they effectively squeeze the life out of the recovery entirely. Howard Davies said that even
“the markets recognise that if the economy turns out to be weaker than expected and you try to compensate for that by tightening even further, then that way madness lies.”
One could paraphrase that by saying, “Trying to stimulate economic growth by cutting consumption is very foolish,” and I would agree entirely, but that is precisely what the Government are attempting to do.
So there is nothing in the Queen’s Speech to compensate for the shrinking demand in the economy that the Government’s own policies are creating; nothing to compensate for the £73 billion of fiscal consolidation that they inherited; nothing to compensate for the £113 billion of cuts and tax rises planned for 2014-15; and precisely nothing to compensate for the £155 billion that will leave the economy every year from 2016-17. Indeed, they are exacerbating the problem with cuts to Government consumption and expenditure of between 1.3% and 2.6% a year from 2013 to 2016.