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THE last couple of [...].


THE last couple of weeks have been dominated by a persistent and totally unwelcome noise - the sound of the wheels coming off the UK and European economies, with dramatic consequences for working families.

The admission that Europe was more than likely heading for a second recession in four years is far from a surprise.

Closer to home, the confirmation by PricewaterhouseCoopers that the North East has suffered more under the Tory-led coalition government was met with the understated reaction: "Who would have expected anything different?" Of course, no-one did. From Day One of the Tory-LibDem alliance it was completely obvious that this region was in the firing line for economic turmoil.

Public opinion on the current government's economic policy is shifting dramatically, especially in the North East. At the beginning of this administration there was an acceptance that spending cuts were necessary to help the economy. Now, there is a growing belief that not only are the spending cuts too quick, too deep and unfair, but also that they are not helping to secure economic progress.

The public is rapidly losing confidence that the government is pursuing the right course for growth and that feeling is most strongly held in the North East.

There is a basic economic flaw at the heart of the government's approach. They are so obsessed with the current structural deficit that this has become their sole policy. This approach is, of course, more political than economic; as long as they concentrate the public's minds on the deficit they "inherited" they can continue to blame the previous Labour administration.

However, the public have long passed the point where they are interested in looking back and are increasingly aware that this government needs to show something more.

The structural deficit, here and across Europe, is as much a result of the failure of the prevailing economic paradigm as it is about the lack of regulation in the financial sector and the domination of the money markets.

A consumer-led, borrowing-fuelled economy was and is always doomed to have a precarious outlook, especially when the wage levels of consumers have become a progressively small proportion of GDP. There is a demand for economic leadership, for a vision that moves beyond tackling the deficit and articulates a better economic future than merely cutting public spending, reducing services and devastating communities and nations.

Kevin Rowan, regional secretary, Northern TUC
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Publication:The Journal (Newcastle, England)
Date:Nov 14, 2011
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