With a growth rate of 1.9% last year and forecasts
of 2.4% this year Britain has the fastest growing major economy in Europe and economists predicting that by mid-year the longest and deepest downturn for a century will be
over.
Together with falling unemployment, inflation and
predictions of 2.4% growth next year, some bragging by the Government was
expected, but the Chancellor refrained and cautioned ‘there is much still to
do’.
The recovery has largely been driven by consumer
spending and much of the growth has been in the services sector and not enough
from investment in the manufacturing and construction sectors.
The Chancellor expects that will change as
confidence grows but until it does the recovery is unbalanced and
unsustainable.
As unemployment comes down the pressure on the Bank of England to raise interest rates will grow, causing problems for those with
big mortgages and credit card debts and that is why the Chancellor talks about
the need to rebalance the economy – shifting the drive for growth from consumer
spending to business investment.
This is highly political and it means continued
cuts in public expenditure after the election.
Ed Balls says Labour will match the Coalition’s
spending plans but the Institute for Fiscal Studies thinks he means the present
measures, not new ones after the election.
Will voters feel they have suffered enough and
choose the softer approach or opt for finishing the job of clearing the debt
burden?
The second major domestic issue this week has been
the flooding in Somerset and many homes have been under water since Christmas,
provoking angry demands for Government action.
The Environment Secretary visited the area and the
Prime Minister ordered more pumps to be provided.
A decision to discontinue dredging the rivers is
blamed for the extent of the flooding and Mr Cameron has promised that once it
is safe to do so dredging will be restarted, meanwhile the Government is
looking for ways to help the flood victims.
Internationally, the Government has bowed to
pressure to take more Syrian refuges. Hitherto it has given £600 million,
provided food, clean water, and medical aid.
The Foreign Secretary has also played a leading
role in the diplomatic search for peace.
However, the current political sensitivity about
immigration made the Government reluctant to sign up to the UN
High Commissioner for Refugees (UNHCR) scheme for relocating
the 2.4 refugees.
There are already 3,500 Syrian asylum seekers here
and under pressure from all sides of the political spectrum the Government has
now agreed to take a few hundred women and children refugees, especially
victims of sexual violence and they will be given visas to come to Britain,
initially for three years.
A question now is how ready the voters are to be
Good Samaritans for these Syrian refugees?
