UNISONActive is an unofficial blog produced by UNISON activists for UNISON activists. Bringing news, briefings and events from a progressive left perspective.

Wednesday, 8 June 2011

The wrong type of recession

Last weekends’ papers were awash with some welcome dissent on Osbornes’ economic performance as calls for a ‘plan B’ strategy came from some of his previous backers: http://www.guardian.co.uk/commentisfree/2011/jun/04/uk-new-economic-approach

They now question the growth stimulus that was deemed critical to avoiding a double dip recession. Osborne gambled with the idea that by cutting the public sector there would be room for the economy to ‘rebalance’ allowing private sector growth, led by a buoyant export market. This simply has not happened.

Inflation coupled with VAT is now biting on the retail and service sectors. Unemployment is growing by any measure and the seeds of recovery, sown by the initial fiscal stimulus led by Brown, which enjoyed broad political consensus on a global and domestic scale, have been trampled in the rush to cut jobs and services.

The bankers are refusing to lend to businesses and each week hundreds of small firms fall victim to this failing chancellor. The Tories continue to claim that this is not a double dip recession as the economy has grown. That is by their measure of growth and their measure of recession.

Unemployment is a key factor in any recession and growth alone is not an exclusive measure of recession. Unemployment is a dominant factor in determining whether we are indeed hitting the ‘double dip’ much predicted by the likes of Danny Blanceflower who said in an Observer interview “How come George Osborne isn't the most hated man in Britain? He should be. It was never necessary to do this. I hold Cameron, Clegg and Osborne responsible for the collapse of the British economy: They talked down the economy when it was never bankrupt. Consumer confidence collapsed, and the date of the collapse was April 2010 [during the general election campaign]”.

Amongst UNISON members who have or face losing their jobs Osborne is the most hated man in Britain! What UNISON needs to do now is to articulate a realistic definition of recession - which should not blindly succumb to a measure of recession that suits the right wing. The Tory definition of recession is of course favoured by them but is one that ignores unemployment. This is a convenient way to ignore the ‘wrong type of recession’ with rising unemployment , rock bottom consumer confidence and major sectors of the economy failing to grow.

Anna Rose