The latest figures show the UK economy has been in worse decline than at any time since the 1930s. As expected, the Chancellor’s forecasts have turned out to be too optimistic.
Worse still, the biggest decline by far has been in manufacturing. The government sector has continued to grow – on borrowed money – and private sector services have been patchy. The biggest hit has been taken once again by those who make things. This is the very opposite of what the PM always said he wanted.
Two of the weakest sectors have been new housebuilding and car manufacture. The government has sought to encourage the former throughout its life, but has been most unsuccessful. It has sought to tax the car into oblivion for much of its period in office, only to offer some offsetting cash breaks once the crisis in motor manufacturing was painfully clear.
The irony of the government’s strategy of subsidising banks, spending more in the public sector, whilst regulating and taxing private industry more has been to lead to relatively much more unemployment in the industrial sector than elsewhere. The legacy of the distorted economic policy will be more closed factories and more retreats from making things in the UK.