The worst government for growth in modern times

The three-month rate may have held up at 0.7 per cent, but the rate compared with the same three months a year ago is only 0.4 per cent.

There are causes for concern in construction and manufacturing, with the former collapsing by 2.2 per cent into the latest three months and the latter falling by 1.4 per cent on the month (the steepest monthly fall since Jan. 2021), and the three-month rate slowing to 1.0 per cent from 1.4 per cent last month

These falls are offset by stronger transport and storage (+3.7 per cent into latest 3m), ICT (+1.3 per cent) business services (+1.9 per cent), and continued strong growth in education and health output.

But the key worry remains the underlying weakness of consumer demand.

Retail and wholesale fell by 0.1 per cent into the latest three months and so-called consumer facing services grew by only 0.2 per cent into the latest three months, and fell by 0.7 per cent into the latest month. The last full estimate of consumer spending growth for quarter one was only 0.2 per cent.

And this weakness is the underlying story of the worst government for growth in modern times.

Throughout its dismal 14 years in office, the government has failed workers and slashed public services, social security spending and public investment. Containing pay and public spending has meant a vicious cycle between the worse pay crisis in modern times, weak spending and failed economic growth.

Over the past century growth has averaged 2.4 per cent a year, according to TUC analysis of official figures. Between 2010 and 2024 growth averaged only 1.5 per cent, the worse government since the Second World War – and in a hundred years the second worse to the great depression of 1929-1931.

TUC General Secretary Paul Nowak, elaborated:

Our economy is slowing yet again. This has been the worst government for growth in modern times – and working people have paid the price.

“Real wages are still worth less than 2008. Unemployment is rising at the fastest rate in the G7. And economic inactivity is at record levels. [see yesterday’s commentary]

“The Conservatives can spin all they like. But the last 14 years have been dismal for growth and living standards.

“They have turned Britain into a stagnation nation.”

Coalition and Tory government actions were taken purportedly to restore the public finances to good shape after the global financial crisis, but as is widely known in this the government failed as well. It is time to rediscover that fairness and growth and improved public finances go hand in hand.