Brendan Barber says government’s economic strategy risks creating a lost decade of low growth and high joblessness
Income per head – economic growth that takes account of population change – fell throughout 2011 and is forecast to remain flat in 2012, the TUC says today, ahead of the preliminary estimate of the first quarter 2012 GDP growth figures published tomorrow.
With the Office for Budget Responsibility forecasting growth of 0.8 per cent in 2012 – exactly the same as the UK’s current rate of population growth – income per head in the UK will not grow until 2013.
It will take a further four years for the UK to enjoy the same the level of income per head as it did in 2007, confirming fears that the country could be in the midst of a lost decade unless the government changes its economic strategy, says the TUC.
A TUC analysis shows that income per head grew by around 2.8 per cent a year between 1993 and 2007. The UK therefore needs quarterly GDP increases of between 0.7 per cent and 0.8 per cent to get back to pre-recession levels of economic growth. Any growth short of this shows that our economy is still under-performing, says the TUC.
The TUC wants the government to change course and move towards an ambitious programme of investment in jobs to get the economy growing and the deficit down, rather than the self-defeating austerity that has meant 2.6 million people being out of work and millions more under-employed in part-time and temporary jobs.
TUC general secretary Brendan Barber said: “After last year’s disastrous performance, we’re all hoping that the UK economy has finally started growing again.
“But we shouldn’t allow the constant lowering of expectations to turn the avoidance of a double-dip recession into something to celebrate.
“The fact is that the UK economy has been under-performing for over a year and will continue to do so as full-blown austerity kicks in. The government’s economic strategy risks creating a lost decade of low growth and high joblessness.
“We need only look across the Atlantic to see how the alternative to austerity – an ambitious programme of investment in jobs – is helping to turn the US economy around. The Chancellor needs to learn lessons from the economic success in the US, rather than continue with the self-defeating cuts that are dragging down economies right across Europe.”
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