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Reports of doom and gloom are hiding the progress being made; Columnist.

Byline: Graham Robb

IENJOY the theatre of politics as much as anybody. The new political villain, Labour-supporting Jimmy Carr, being booed because his tax planning resulted in a tiny bill after he censured others for using shelter schemes.

The shouts of "behind you!" from the newspapers as they published embarrassing details about the taxes of friends of David Cameron.

The inelegant pirouette from Ed Miliband as he claimed Labour was wrong on immigration while shouting down the Home Secretary as she tries to bring in measures to get it under control.

All this is very amusing and, in conjunction with the summer of sport, is keeping the more gloomy economic news off our TV screens.

I rarely enjoy the pronouncements of Robert Peston, his sombre tone suggesting the economy is beyond hope. If I took business decisions based on TV commentaries, I'd be paralysed and fearful. No investments would be made and all progress would have ground to a halt. The cuts, the euro, the Greeks, the strikes, the recession. All normally take top billing ahead of innovation, investment and positive economic news. But they cannot beat football, Jimmy Carr, Wimbledon, the Olympics and the Diamond Jubilee for our attention, which might just give the economy the breathing space it needs to regain some confidence.

Facts are stubborn and sometimes contradictory. It is a fact that by the tiniest statistical percentage the economy is technically in recession. Hardly the deep recession of 2008 and there are now plenty of counter indicators to suggest things are, in fact, improving.

The list of positive data is growing and compelling. In the last two weeks alone UK unemployment fell for the third month in a row and inflation also dropped to come within the Government's target range. Mortgage lending increased by 13% on this time last year with an extra pounds 10.8bn being lent to homebuyers and retail sales also improved, going up month on month and rising by 3% on the same time last year.

Indicators from trade bodies remain positive too. The manufacturing organisation EEF surveyed member firms and they remain resilient in the face of the Euro crisis saying that UK and export orders are growing and recruitment is continuing.

In all, 70% had a positive outlook.

Most importantly for the North East, we have registered record exports for the third month in a row, with a 7.48% increase, and a record high in the 12 months to March. Specialised machinery, road vehicles and power-generating machinery were the fastest growing sectors.

I confidently expect steel to be a growth area in the next figures as exports from the newly reopened SSI plant on Teesside start to count in the data. The plant was re-ignited with the help of the Government's Regional Growth Fund.

The real world economy is a tough place where decisions are fact-based, not driven by the games played on the political stage. When the facts are analysed, David Cameron's coalition Government starts to look more impressive.

The number of people out of work is still too high, but it has not reached the levels many feared. The taxes we pay on petrol and in VAT are ever present, but working people got a significant income tax cut and the basic state pension went up by pounds 5.30 per week.

Government policy made it possible to freeze council tax, TV licence fees and interest rates - with the result that mortgages are being kept at the lowest level for the longest period in living memory.

All of this would have been impossible if the Government had been forced to play cat and mouse with the bond markets. In fact, the Government interest rates are, with Sweden's, the lowest in Europe.

Given that the UK has to pay interest on a national debt of more than pounds 700bn and rising, it helps that the rate is only 1.82% compared to the 7% Spain is paying. The reason is because, in the two years since it came to office, the Government has cleared a quarter of the deficit left by Labour. It is trusted by the markets, resulting in a lower proportion of tax cash spent paying interest.

As you open a can of beer or drink a glass of wine while watching the football or tennis this week, enjoy the distraction from the doom and gloom safe in the knowledge that at least some things are going right!

Graham Robb is senior partner at Recognition PR
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Copyright 2012 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Features
Publication:The Journal (Newcastle, England)
Date:Jun 27, 2012
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