Osborne gets a boost as UK slips down global league tables?

As the Chancellor is forced to defend his austerity measures, new analysis suggesting the UK is getting less competitive may be quite helpful.

by James Taylor
Last Updated: 19 Aug 2013
We don't know about you, but we were just thinking that it had been way too long since a group of economists put their names to a joint letter about Government policy. Thankfully, a group of prominent proponents of the dismal science have come to our rescue with a missive to the Observer suggesting that George Osborne needs a Plan B - forcing the Chancellor onto the airwaves again this morning to defend his approach. As such, the release of new analysis suggesting that the UK is slipping down a number of global competitiveness tables might seem ill-timed. But since governments always like to blame everything bad on the last lot, it might actually provide Osborne with more ammunition for his argument that the current approach is the only way to sort out the mess he inherited...

The report, by the Centre for Policy Studies, covers three separate tables (from the World Economic Forum, the Institute for Management Development and the Heritage Foundation (who they)). But all three tell a similar story: that since 1997, the UK has tumbled below the likes of Singapore and even Denmark in the rankings thanks largely to oppressive regulation, higher taxes and wasteful public spending.

Now it's worth bearing in mind that this particular think-tank is traditionally right of centre - so it's no surprise to see it producing research that hammers the previous Government. On the other hand, it would presumably argue that it didn't come up with these stats; the organisations in question did. And the kind of falls in evidence - from 7th to 12th, from 9th to 22nd and from 5th to 16th respectively - paint a pretty damning picture.

Osborne, of course, argues that this justifies the kind of drastic action the Government is taking to cut the deficit; he's been insisting today that his current provides 'credibility where there was no credibility, stability where there was no stability, confidence that actually the British economy is getting its act together.' The academics, on the other hand, argue that his plan just isn't working.

Of course, when it comes to politics, everyone has their axe to grind (the signatories have been described in many quarters as left-leaning - though perhaps a little lazily, since at least some of them supported the Government's cuts programme last year). But these things do matter: Osborne suggested today that they didn't represent the 'consensus of opinion'; but although that may have been true six months ago, the economy’s feeble recovery is clearly changing things.

So it'll be interesting to see what the International Monetary Fund says today when it delivers its latest verdict on the UK’s public finances. Back in November it said the UK was 'on the mend'. If it strikes a more negative tone today, it'll be a lot harder for Osborne to claim that his opponents are on the wrong side of the argument.
Economy Misc

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