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‘Recession over’ boost for the PM
The Mole: The NIESR’s report on economic recovery is manna from heaven for Gordon Brown, says our Westminster insider
Gordon Brown must be punching the air in glee - at least behind closed doors - after being handed precisely the news he has been praying for: the recession is over and his much-criticised policies aimed at getting Britain through the downturn are working.
The fact that this declaration has come from the well-respected National Institute of Economic and Social Research (NIESR) is the icing on the cake. Its director, Martin Weale, doesn't beat about the bush. He declared: "So far as we can say, the recession is over."
The economy hit bottom in March and returned to growth in April and May, says the NIESR. The growth is minimal - 0.2 per cent in April and 0.1 per cent in May - but if the figures are accurate, it means Britain is coming out of recession months before Chancellor Alistair Darling predicted.
After weeks of speculation over his leadership and plots to oust him on the grounds he is an election loser, the news will have come as manna from heaven for the Prime Minister.
He has just one shot left in his locker if he is to avert a future leadership coup, perhaps around the time of the Labour conference in September, and even turn Labour's election fortunes around. And that is to be able to say he had it right all along on the economy while the 'do nothing' Tories consistently got it wrong.
Downing Street is being cautious about the NIESR report, simply saying it is clear that the measures Brown and Darling took are beginning to work, but stressing economic conditions remain difficult. The last thing Brown wants is for people to get over-excited, just in case this is a blip and the recession kicks in again.
But if the trend continues, when Brown stands before the party faithful in September he will be able to deliver the equivalent of an "I told you so" speech.
The Tories, meanwhile, will be forced into a re-think and have to start coming up with excuses for why they opposed all the measures he took. And David Cameron is already facing a struggle explaining away shadow health secretary Andrew Lansley's revelation that the Tories are planning 10 per cent cuts to public spending if they win the next election.
That gaffe has put the once un-sackable Lansley’s job on the line. But it’s also significant for Labour: if the "Tory cuts" line keeps running against the background of genuine signs of economic recovery, Brown believes he may yet see another dramatic change in his electoral fortunes. ·
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Paul Krugman, this year's Nobel Laureate deserves some credit for identifying at once and during the days of utter gloom that Brown had 'got it right'.
Cameron has a weak face and as for Osborne (is he still with us?) well, I think the election of the Etonians has been over sold.
Before Brown gets too gleeful, he ought to find out the market response to the sale of gilts coming up in the autumn. There is no reason for Cameron or Lansley to apologise for suggesting cuts. They need to remind people of the level of the National Debt which is Brown's own unaided work. Have a bit of backbone, Cameron, and keep ramming that message home.
......a dramatic change in electoral fortune............a quite interesting perception.......................looking at politics from another perspective and with the underlying issues behind the expenses saga in mind, it seems that the country now has lost interest in the present political class.......................How is this going to be resolved and given that the pain of joblessness is going to continue for a while yet?.......................an invigorating uplift is required.............suppose we will hear about it in due course!
There will be cuts whoever is in charge...they will be the inevitable response to the economic reality. Should Lansley suffer for being honest? (As perhaps Darling did, when he admitted the truth of the severity of the problems.). The need for severe cuts will arise as the legacy of Blair/Brown/Labour fiscal mismanagement. Can people really forget that so quickly?