Politicians’ obsession with growth figures and whether or not the UK has suffered a ‘triple dip’ recession is absurd, and worse, it is damaging to business and consumer confidence.
Every time there is a television report mentioning the dreaded ‘dip’ word, firms such as Sage, a software provider catering to small and medium-sized businesses, see an instant effect on their order books.
Does anyone seriously think the initial estimated growth figure of 0.3 per cent reported this week represents salvation, and that zero or minus 0.1pc would have spelled damnation?
Enlarge Warning: The IMF has said George Osborne might have to moderate his austerity planThis ignores the fact that the GDP figures, which provoke such strong responses, are subject to major revisions.
More... Sterling soars against dollar as likelihood of more quantitative easing fades and US GDP disappoints Too fast, too deep? Households are warming to Osborne's austerity drive, new poll reveals What next for the UK economy? Economists downbeat despite the return to growthTrawling back over the Office for National Statistics’ figures is highly instructive: the initial estimate for GDP in the second quarter of 2008, for example, was a positive figure of 0.2 per cent, but has now been revised to a negative 0.9 per cent. For the third quarter of 2009, the ONS initially estimated a contraction of 0.4 per cent, but now thinks there was growth of 0.4 per cent.
The reason for the divergence is that much of the key data, from HMRC tax returns and the like, takes a long time to come in.
Statisticians also acknowledge there is a heightened risk of the figures going awry when the economy has suffered a shock. This happened in the late Lawson boom at the end of the 1980s and after the Asian crisis in the 1990s. The obvious inference is that it could well be happening again.
A more interesting question than whether the economy is hovering just above or just below zero is whether the official numbers are capturing important elements of the UK economy as it evolves after the crisis. The ONS number-crunching is not fully geared to reflect some of Britain’s strengths, for example in the creative industries, brands and intellectual property.
As for the politicians, they would do better to stop obsessing about the GDP figures and start devoting their energy to credible strategies for growth.
Lift-off
In that vein, one key part of our advanced manufacturing base with plenty of potential is the UK aerospace sector, the second biggest in the world after the US and employing 230,000 people.
Around 27,000 large new passenger aircraft worth $3.7trnillion will be needed between now and 2030, along with an estimated 40,000 commercial helicopters with a value of around $165billion.
To take advantage, the UK industry needs to make deeper inroads into markets such as India, Brazil and China, which placed a $4billion order for Airbus A330 passenger jets this week.
In advanced manufacturing, the traditional distinction between producing goods and providing services has become blurred: companies don’t just sell engines, they provide ‘propulsion hours’.
The economy grew by 0.3 per cent in the first three months of 2013, avoiding the third recession since 2008, the Office for National Statistics said
A new report by industry body ADS and UKTI has taken account of this by looking for the first time at the opportunity to provide maintenance, overhaul and repair, which it reckons will increase the global market by the end of the decade by as much as $163billion.
The Government’s decision to back the industry, by funding a new aerospace technology institute to the tune of £2billion, is a wise move.
Bad language
The fact that the banking elite lives in a different world and speaks a different language could not have been more starkly illustrated than at the Barclays annual meeting this week.
Confronted over executive pay, Sir John Sunderland, (no relation) who chairs the remuneration committee, claimed the bank was in ‘the lowest quartile of our peer group for incentive competition’. Despite these weasel words, Barclays still doles out obscene sums, as Joan Woolard, a 75-year-old widow, pointed out forcefully, telling directors they are ‘greedy bastards’.
Barclays has drowned its plans to improve its ethics and culture in a tide of jargon. It says it wants to be the ‘go-to’ bank, but the first place its executives should ‘go to’ is a remedial English class.
So should rivals at HSBC, which this week said it is ‘demising’ hundreds of jobs instead of acknowledging in plain terms it is making people redundant. The ‘demising’ episode attracted enormous attention, and rightly so, because it was an attempt at sugar-coating that insults the people losing their livelihoods.
This is not just a matter of being a stickler for grammar; language is being used to blur unpalatable reality, whether on excess pay and greed or on lost jobs and their human cost.
The linguistic gulf is a symptom of the moral divide between banks and the rest of society. Their self-serving euphemisms are far more offensive than Mrs Woolard’s forthright words. - Ruth Sunderland is Associate City Editor of the Daily Mail
