Cover of MoneyWeek magazine issue no 548

The future of energy

29 July 2011 / Issue 548

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Excerpt

Better Osborne than Balls

Ed Balls, the shadow chancellor, is trying to turn the state of GDP growth in the UK from a disappointment into a crisis. According to Balls, the economy is “flat-lining” and George Osborne’s policies are “choking off growth”. Are they?

The headline number of 0.2% doesn’t make the economy look particularly vibrant. But if you accept what the Office for National Statistics says about the special circumstances surrounding the figure, then the growth number isn’t bad. Without the royal wedding and the Japanese earthquake, the UK economy would have grown at 0.7% in the second quarter. That’s an annual rate of 2.8%, which for a mature economy in the middle of a banking crisis is hardly to be sniffed at.

That said, we aren’t actually growing at 2.8%. So it makes sense to ask if Osborne is making mistakes. The short answer is that he is.

But imagine that instead of being run by George Osborne, our national finances were under Ed Balls. Today’s misery is nothing compared to the misery you’d see then.

• Read the full editor’s letter here: Better Osborne than Balls