Monday, May 20, 2013
Too important for politicians
If there is one thing that is clear about the current controversy over Europe it is that the consequences of any decision to pull out are so serious that maybe there is a case for keeping politicians out of the debate altogether.
That is just a whimsical remark of course. After all many of those expressing a view on this matter could not and should not be silenced. But it does underline a basic point, which is that so far the real issues are not being discussed.
That is why an article in today's Independent is so important. They report that some of Britain’s most successful and eminent business leaders have accused Eurosceptic MPs of putting “politics before economics” and abandoning the national interest in their calls for Britain to leave the European Union.
They add that in a letter to the group issue a trenchant riposte to politicians who have argued that Britain’s economic interest would be better served outside the EU:
They also call for David Cameron to “strengthen and deepen” the European single market to boost Britain’s economy by £110bn.
The letter, which is signed by senior figures including the current and next presidents of the Confederation of British Industry (CBI) as well as the chairmen of BT, Deloitte, Lloyds and Centrica, is the first co-ordinated response from the business community to increasing anti-European political rhetoric.
It reflects growing concern in the City that anti-European feeling is not being effectively countered by mainstream political leaders in the wake of last month’s local council elections.
The paper adds that in their letter the businessmen write that on a purely economic basis, exiting the EU would be deeply damaging to Britain:
“The economic case to stay in the EU is overwhelming,” they say. “To Britain, membership is estimated to be worth between £31bn and £92bn per year in income gains, or between £1,200 to £3,500 for every household.
“What we should now be doing is fighting hard to deliver a more competitive Europe, to combat the criticism of those that champion our departure. We should push to strengthen and deepen the Single Market to include digital, energy, transport and telecoms, which could boost Britain’s GDP by £110bn.”
Addressing concerns that European banking legislation is adversely affecting the City of London, the 19 business leaders say that the right answer is to fight for Britain’s interests inside the EU – rather than attempting to go it alone. “The City of London is Europe’s global financial centre,” they say. “Some of the EU’s ideas such as a cap on bankers’ bonuses put this standing at risk. So the Government needs to work hard to protect it.
“But there is also a huge opportunity to promote London’s capital markets to help solve the problems of the EU banking system. We should promote the cause of EU membership as well as defend our position.”
They conclude: “The benefits of membership overwhelmingly outweigh the costs, and to suggest otherwise is putting politics before economics.”
Some businessmen privately express concerns that were Britain to leave and place restrictions on foreign workers, other European countries would retaliate and make it harder for Britons to work in the EU.
There is also a non-economic case for staying the European Union, not least that it it provides an invaluable level of social and political cohesion to Europe and has helped us maintain peace on the continent for several generations. This really is more important than politics.
That is just a whimsical remark of course. After all many of those expressing a view on this matter could not and should not be silenced. But it does underline a basic point, which is that so far the real issues are not being discussed.
That is why an article in today's Independent is so important. They report that some of Britain’s most successful and eminent business leaders have accused Eurosceptic MPs of putting “politics before economics” and abandoning the national interest in their calls for Britain to leave the European Union.
They add that in a letter to the group issue a trenchant riposte to politicians who have argued that Britain’s economic interest would be better served outside the EU:
They also call for David Cameron to “strengthen and deepen” the European single market to boost Britain’s economy by £110bn.
The letter, which is signed by senior figures including the current and next presidents of the Confederation of British Industry (CBI) as well as the chairmen of BT, Deloitte, Lloyds and Centrica, is the first co-ordinated response from the business community to increasing anti-European political rhetoric.
It reflects growing concern in the City that anti-European feeling is not being effectively countered by mainstream political leaders in the wake of last month’s local council elections.
The paper adds that in their letter the businessmen write that on a purely economic basis, exiting the EU would be deeply damaging to Britain:
“The economic case to stay in the EU is overwhelming,” they say. “To Britain, membership is estimated to be worth between £31bn and £92bn per year in income gains, or between £1,200 to £3,500 for every household.
“What we should now be doing is fighting hard to deliver a more competitive Europe, to combat the criticism of those that champion our departure. We should push to strengthen and deepen the Single Market to include digital, energy, transport and telecoms, which could boost Britain’s GDP by £110bn.”
Addressing concerns that European banking legislation is adversely affecting the City of London, the 19 business leaders say that the right answer is to fight for Britain’s interests inside the EU – rather than attempting to go it alone. “The City of London is Europe’s global financial centre,” they say. “Some of the EU’s ideas such as a cap on bankers’ bonuses put this standing at risk. So the Government needs to work hard to protect it.
“But there is also a huge opportunity to promote London’s capital markets to help solve the problems of the EU banking system. We should promote the cause of EU membership as well as defend our position.”
They conclude: “The benefits of membership overwhelmingly outweigh the costs, and to suggest otherwise is putting politics before economics.”
Some businessmen privately express concerns that were Britain to leave and place restrictions on foreign workers, other European countries would retaliate and make it harder for Britons to work in the EU.
There is also a non-economic case for staying the European Union, not least that it it provides an invaluable level of social and political cohesion to Europe and has helped us maintain peace on the continent for several generations. This really is more important than politics.
Sunday, May 19, 2013
Labour's opportunistic opposition to housing benefit reform stumbles again
Many politicians hold genuine and deeply-held views in opposition to the coalition government's reform of housing benefit.
There is no doubt changes that will reduce entitlement for those who have a spare bedroom are controversial and will initially cause problems for many people.
That is why the government has put in place additional funds for Discretionary Housing Payments and have altered a number of the regulations to ease specific issues. It is my view that more needs to be done, but that is not the point of this post.
The position of the Labour Party on this issue has been particularly hypocritical. They have been virulent in their opposition to what they have termed 'the bedroom tax' and yet they piloted this reform when they were in government and introduced it for the privately rented sector in 2008.
What is more they have put forward no alternative nor have they pledged to repeal it. That hypocrisy has been brought into stark contrast this weekend with a clarification of the position of the shadow Secretary of State for Work and Pensions.
According to this article, Liam Byrne went to Newcastle empty-handed and left his audience sorely disappointed on this very issue.
Labour's opportunism on welfare reform is disgraceful. They quite rightly initiated it, now they are opposing it despite not having any intention of undoing the reforms. No wonder they are struggling in the polls.
There is no doubt changes that will reduce entitlement for those who have a spare bedroom are controversial and will initially cause problems for many people.
That is why the government has put in place additional funds for Discretionary Housing Payments and have altered a number of the regulations to ease specific issues. It is my view that more needs to be done, but that is not the point of this post.
The position of the Labour Party on this issue has been particularly hypocritical. They have been virulent in their opposition to what they have termed 'the bedroom tax' and yet they piloted this reform when they were in government and introduced it for the privately rented sector in 2008.
What is more they have put forward no alternative nor have they pledged to repeal it. That hypocrisy has been brought into stark contrast this weekend with a clarification of the position of the shadow Secretary of State for Work and Pensions.
According to this article, Liam Byrne went to Newcastle empty-handed and left his audience sorely disappointed on this very issue.
Labour's opportunism on welfare reform is disgraceful. They quite rightly initiated it, now they are opposing it despite not having any intention of undoing the reforms. No wonder they are struggling in the polls.
Saturday, May 18, 2013
The 'loons' have it
So what has happened to the Tory party? We have not seen this level of in-fighting since the John Major years and even then their cabinet ministers and SPADs stopped short of slagging off their own activists.
As the Telegraph reports the pressure is starting to get a bit much for some of the occupants of the Number 10 bunker. So much so that a a senior figure in the Conservative Party who has strong social connections to the Prime Minister decided to excuse the 116 rebels who voted to amend the Queen's speech by saying that: “The MPs just have to do it because the associations tell them to, and the associations are all mad swivel-eyed loons.”
Presumably the same reason will be wheeled out to justify the 150 plus Conservative MPs who are expected to vote against Mr Cameron’s plans to legalise same-sex marriage next week when the legislation returns to the House of Commons.
When we entered this coalition, commentators predicted that the Liberal Democrats would not last the pace. Instead it is the more experienced but less disciplined Tory Party who are falling apart.
As the Telegraph reports the pressure is starting to get a bit much for some of the occupants of the Number 10 bunker. So much so that a a senior figure in the Conservative Party who has strong social connections to the Prime Minister decided to excuse the 116 rebels who voted to amend the Queen's speech by saying that: “The MPs just have to do it because the associations tell them to, and the associations are all mad swivel-eyed loons.”
Presumably the same reason will be wheeled out to justify the 150 plus Conservative MPs who are expected to vote against Mr Cameron’s plans to legalise same-sex marriage next week when the legislation returns to the House of Commons.
When we entered this coalition, commentators predicted that the Liberal Democrats would not last the pace. Instead it is the more experienced but less disciplined Tory Party who are falling apart.
Friday, May 17, 2013
A modern circle of hell
I reference this article in the Daily Telegraph as a public service, because I for one an fed up with phone trees. The paper reports that some multi-national companies have almost 80 menu options when you try to call them. If you are able to find a shortcut then it is believed that this could save a person up to eight minutes per call.
The paper say that a Lloyds TSB home insurance customer who wishes to report a water leak would normally have to wade through 78 menu options over seven levels to get through to the correct department. Two thirds of call centres (68%) use introductions or additional advertising between options
IT manager Nigel Clarke, 53, who spent seven years making 12,000 calls to automated phone centres, has come up with a solution. He has painstakingly catalogued the option sequences of 130 leading companies, and has now published online which numbers to press to reach the required department. Thus, the Lloyds TSB customer referred to above will find that the combination 1-3-2-1-1-5-4 will get them straight through, saving over four minutes of waiting.
Mr Clarke, who has been working on the list for seven years, cites the HMRC as one of the worst offenders, where callers can take up to six minutes to reach the correct department.
As one of the UK's busiest call centres, the Revenue receives 79 million calls per year, or a potential 4.3 million working hours just navigating menus.
Mr Clarke believes that with better menu design, at least three million caller hours could be saved here alone.
He said he became increasingly “frustrated” by the lists. "I thought to myself 'Why don't companies make life easy for their customers and simply show me the menu options before I call so I know what numbers to press to get through much more quickly?'.
"I realised I could often save a minute or two at least per call. That soon adds up in time and money with all the calls I make each year."
My only beef with this article is that it does not give the website address.
Update: The website is here
The paper say that a Lloyds TSB home insurance customer who wishes to report a water leak would normally have to wade through 78 menu options over seven levels to get through to the correct department. Two thirds of call centres (68%) use introductions or additional advertising between options
IT manager Nigel Clarke, 53, who spent seven years making 12,000 calls to automated phone centres, has come up with a solution. He has painstakingly catalogued the option sequences of 130 leading companies, and has now published online which numbers to press to reach the required department. Thus, the Lloyds TSB customer referred to above will find that the combination 1-3-2-1-1-5-4 will get them straight through, saving over four minutes of waiting.
Mr Clarke, who has been working on the list for seven years, cites the HMRC as one of the worst offenders, where callers can take up to six minutes to reach the correct department.
As one of the UK's busiest call centres, the Revenue receives 79 million calls per year, or a potential 4.3 million working hours just navigating menus.
Mr Clarke believes that with better menu design, at least three million caller hours could be saved here alone.
He said he became increasingly “frustrated” by the lists. "I thought to myself 'Why don't companies make life easy for their customers and simply show me the menu options before I call so I know what numbers to press to get through much more quickly?'.
"I realised I could often save a minute or two at least per call. That soon adds up in time and money with all the calls I make each year."
My only beef with this article is that it does not give the website address.
Update: The website is here
Thursday, May 16, 2013
Tax avoidance and international companies
Today's Independent reports the appalling fact that Amazon paid less in UK corporation tax last year than it received in government grants.
The paper says that its official company accounts have revealed that last year it paid just £3.1m in total taxes on sales of £4.2bn. Its corporation tax bill was £2.44m, less than the £2.5m it received from the Scottish Government in inducements to build a new distribution warehouse in Dunfermline. And it is not just them:
The news comes as MPs say Google employees have turned whistleblower to describe how the Internet search giant misleads Britain's tax authorities over how much business they carry out in this country.
Giving evidence to MPs on the Public Accounts Committee the head of Google sales in Europe Matt Brittin insisted that all its sales were completed in Dublin.
This allows the company to pay tax at a lower rate than if the sales were completed in the UK.
But MPs told Mr Brittin that they had been contacted by former employees who described the extent of sales operations in the UK.
This includes pay-slips showing UK based staff being paid substantial bonuses depending on their 'sales' and evidence that big clients were being dealt with almost exclusively in the UK.
I will be in the Hay Festival over the Whitsun bank Holiday weekend and have tickets to see Eric Schmidt, the founder of Google. There may be questions. I am looking forward to it.
The paper says that its official company accounts have revealed that last year it paid just £3.1m in total taxes on sales of £4.2bn. Its corporation tax bill was £2.44m, less than the £2.5m it received from the Scottish Government in inducements to build a new distribution warehouse in Dunfermline. And it is not just them:
The news comes as MPs say Google employees have turned whistleblower to describe how the Internet search giant misleads Britain's tax authorities over how much business they carry out in this country.
Giving evidence to MPs on the Public Accounts Committee the head of Google sales in Europe Matt Brittin insisted that all its sales were completed in Dublin.
This allows the company to pay tax at a lower rate than if the sales were completed in the UK.
But MPs told Mr Brittin that they had been contacted by former employees who described the extent of sales operations in the UK.
This includes pay-slips showing UK based staff being paid substantial bonuses depending on their 'sales' and evidence that big clients were being dealt with almost exclusively in the UK.
I will be in the Hay Festival over the Whitsun bank Holiday weekend and have tickets to see Eric Schmidt, the founder of Google. There may be questions. I am looking forward to it.
Wednesday, May 15, 2013
Coalition Minister needs to reconsider his rash statement
It is bad enough having to introduce changes to housing benefit so as to make it more affordable, without Ministers putting their big feet in it so as to rub in the impact of their policies on some of the poorest members of our society.
Today's Western Mail reports that Lord Freud, who serves as an unpaid minister at the Department for Work & Pensions, suggested to the House of Commons Welsh Affairs Committee that separated parents could either pay the additional rent for an extra bedroom or make use of a sofa bed when children were staying.
The paper characterises it as Families hit by bedroom tax 'can go out to work or use a sofa bed' which puts the comment on a similar level to Norman Tebbit's off-paraphrased statement that the unemployed should get on their bikes and look for work.
The Minister went on to explain his position in less confrontational terms by saying: “The issue is dual-provision of those bedrooms is expensive; basically giving a child a bedroom in two places is a very expensive thing for the state to do and currently we can’t afford that.” However, I am afraid that the damage was already done.
As if to compound the error the Chair of the Committee, Monmouthshire MP, David Davies dug even deeper. He said: “Do you not think it is entirely wrong that up until now many local authorities have apparently had a policy of just handing out large houses to people who don’t even have families or at least one child on the basis that one day they may well have one. I mean, surely we should be expecting everyone, whether they are on benefits or in work, to live by the same disciplines that those of us who are in work live by...
“Surely it is rather discriminatory to expect people on benefits to live in some kind of different world without those constraints.”
It is not the case of course that local councils have handed out large houses to people who would under-occupy them. All social housing providers have allocation policies that fit the property to need. The reason why people under-occupy homes is complex but essentially it is down to changes of circumstances such as divorce or death. Perhaps both Lord Freud and David Davies need to get out more.
Today's Western Mail reports that Lord Freud, who serves as an unpaid minister at the Department for Work & Pensions, suggested to the House of Commons Welsh Affairs Committee that separated parents could either pay the additional rent for an extra bedroom or make use of a sofa bed when children were staying.
The paper characterises it as Families hit by bedroom tax 'can go out to work or use a sofa bed' which puts the comment on a similar level to Norman Tebbit's off-paraphrased statement that the unemployed should get on their bikes and look for work.
The Minister went on to explain his position in less confrontational terms by saying: “The issue is dual-provision of those bedrooms is expensive; basically giving a child a bedroom in two places is a very expensive thing for the state to do and currently we can’t afford that.” However, I am afraid that the damage was already done.
As if to compound the error the Chair of the Committee, Monmouthshire MP, David Davies dug even deeper. He said: “Do you not think it is entirely wrong that up until now many local authorities have apparently had a policy of just handing out large houses to people who don’t even have families or at least one child on the basis that one day they may well have one. I mean, surely we should be expecting everyone, whether they are on benefits or in work, to live by the same disciplines that those of us who are in work live by...
“Surely it is rather discriminatory to expect people on benefits to live in some kind of different world without those constraints.”
It is not the case of course that local councils have handed out large houses to people who would under-occupy them. All social housing providers have allocation policies that fit the property to need. The reason why people under-occupy homes is complex but essentially it is down to changes of circumstances such as divorce or death. Perhaps both Lord Freud and David Davies need to get out more.
Tuesday, May 14, 2013
The price of rebellion
The Tory rebellion over Europe took yet another unusual twist today with the Prime Minister effectively embracing it by announcing his intention to introduce a draft Bill to guarantee that an in/out referendum on Europe will be held by 2017.
According to the Independent the draft Bill, which is to be unveiled by the Foreign Secretary, William Hague, will be seen as a way to strengthen Mr Cameron’s promise of a referendum if his party wins the 2015 general election. They continue:
It is unlikely to be introduced as a government measure because the Liberal Democrats oppose the idea. But it could make progress through Parliament as a backbench Bill. A Conservative source said on Monday night: “We will examine all the options to bring this Bill before Parliament, including a Private Member’s Bill, in keeping with what the Prime Minister has said.”
More than 70 Tory MPs have taken the unusual step of signing an amendment to last week’s Queen’s Speech regretting the absence of an EU referendum Bill. Ministers have been told they can abstain in a vote on it due tomorrow, but backbenchers and ministerial aides will be allowed to support the amendment.
If the Bill starts its passage through Parliament, Mr Cameron hopes it will “shine a spotlight” on his referendum pledge and counter the recent surge by the UK Independence Party. He also hopes the Bill will put the Liberal Democrats and Labour on the spot by forcing them to decide quickly whether they support or oppose giving the public a say on Britain’s position in Europe.
That is all very well, but is this really a good use of Parliamentary time? After all isn't there a constitutional convention that says that a Parliament cannot bind its successors? If that is the case then the draft bill becomes no more than symbolic, a sure sign that party politics and internal dissent have finally trumped the national interest.
According to the Independent the draft Bill, which is to be unveiled by the Foreign Secretary, William Hague, will be seen as a way to strengthen Mr Cameron’s promise of a referendum if his party wins the 2015 general election. They continue:
It is unlikely to be introduced as a government measure because the Liberal Democrats oppose the idea. But it could make progress through Parliament as a backbench Bill. A Conservative source said on Monday night: “We will examine all the options to bring this Bill before Parliament, including a Private Member’s Bill, in keeping with what the Prime Minister has said.”
More than 70 Tory MPs have taken the unusual step of signing an amendment to last week’s Queen’s Speech regretting the absence of an EU referendum Bill. Ministers have been told they can abstain in a vote on it due tomorrow, but backbenchers and ministerial aides will be allowed to support the amendment.
If the Bill starts its passage through Parliament, Mr Cameron hopes it will “shine a spotlight” on his referendum pledge and counter the recent surge by the UK Independence Party. He also hopes the Bill will put the Liberal Democrats and Labour on the spot by forcing them to decide quickly whether they support or oppose giving the public a say on Britain’s position in Europe.
That is all very well, but is this really a good use of Parliamentary time? After all isn't there a constitutional convention that says that a Parliament cannot bind its successors? If that is the case then the draft bill becomes no more than symbolic, a sure sign that party politics and internal dissent have finally trumped the national interest.
Monday, May 13, 2013
Space Oddity
Sunday, May 12, 2013
Three into one won't go
Those who argue that a coalition is an aberration in a system designed to produce two-party government are forgetting that political parties are themselves coalitions.
That is why those of us who argue for a proportional voting system claim that it is a more honest one, because it allows factions within parties to stand alone on their own terms and fight elections on a policy platform they find more comfortable.
Yes, proportional voting may lead to more coalition governments but at least they will be openly constructed administrations in which we can all see and understand the compromises being made, rather than having to second guess behind-closed-doors stitch-ups within the two biggest parties.
The current furore over Europe illustrates this very well. This is an issue that has split the Conservative party for the best part of 40 years, a schism that has at times led to civil war within that party and even destabilised majority governments. Labour has not been exempt from this anguish either and even the pro-European Liberal Democrats have suffered problems, leading to MPs resigning front bench positions so as to vote against the whip.
Now, we are faced with the extraordinary spectacle of the Prime Minister instructing Conservative Ministers to vote against the Queen's speech and giving his backbenchers a free vote so as to avoid a more damaging split over an amendment seeking a referendum on membership of the EU.
The last time a government suffered a defeat on the Queen's speech was 1924 when the Prime Minister was forced to resign. I am fairly sure that will not happen this time however this affair illustrates my point. With such a strong anti-European faction within the Conservative Party, there are not two parties in this coalition, there are three.
That is why those of us who argue for a proportional voting system claim that it is a more honest one, because it allows factions within parties to stand alone on their own terms and fight elections on a policy platform they find more comfortable.
Yes, proportional voting may lead to more coalition governments but at least they will be openly constructed administrations in which we can all see and understand the compromises being made, rather than having to second guess behind-closed-doors stitch-ups within the two biggest parties.
The current furore over Europe illustrates this very well. This is an issue that has split the Conservative party for the best part of 40 years, a schism that has at times led to civil war within that party and even destabilised majority governments. Labour has not been exempt from this anguish either and even the pro-European Liberal Democrats have suffered problems, leading to MPs resigning front bench positions so as to vote against the whip.
Now, we are faced with the extraordinary spectacle of the Prime Minister instructing Conservative Ministers to vote against the Queen's speech and giving his backbenchers a free vote so as to avoid a more damaging split over an amendment seeking a referendum on membership of the EU.
The last time a government suffered a defeat on the Queen's speech was 1924 when the Prime Minister was forced to resign. I am fairly sure that will not happen this time however this affair illustrates my point. With such a strong anti-European faction within the Conservative Party, there are not two parties in this coalition, there are three.
Saturday, May 11, 2013
There was no double dip recession after all?
One of the problems with a 24/7 media is that they are quick to rush to judgement before all the facts are at their disposal, just to get the headline. For example, when the quarterly figures on the economy are published they only contain about 40% of the necessary statistics, making it difficult to draw reliable conclusions. That does not stop politicians and journalists rushing to judgement however, and very rarely, if at all, do we see caveats associated with their pronouncements.
That is the background to this article in the Telegraph that reveals that claims of a double dip recession may have been premature and, in fact it is likely that it did not happen at all.
A recession is defined as two consecutive quarters of negative growth. Thus in the first three months of 2012, after it was revealed that the economy shrank by 0.1pc it was decided that we had indeed reached that nadir. However, the paper reveals that the latest estimates of construction activity for the first quarter of 2012 suggest the economy only flatlined. As a result, there may never have been a technical double dip at all.
The Office of National Statistics has now estimated that construction in the first quarter of 2012 contracted by 5pc, not 5.4pc, and that output in the sector was £108m more than previously thought at £25.273bn, a tiny amount that makes all the difference symbolically.
The Telegraph adds that Simon Ward, Henderson’s chief economist, has calculated that the revision means the economy shrank by 0.04pc in the quarter rather than 0.07pc, all else being equal. When this is rounded to the statistical norm, the change means the economy stagnated at 0.0pc rather than shrank 0.1pc. However, confirmation will not come until June, when the ONS officially reviews past estimates, and any change to past calculations of services or industrial production could yet offset the gains made by construction:
Philip Shaw, UK economist at Investec, said: “As things stand, the revisions to the construction data mean that the UK didn’t double dip over the back end of 2011 and beginning of 2012.
“That’s pretty interesting considering there were fears of a triple dip just a few weeks ago. If markets are concerned about the technicalities of a single dip, double dip, or triple dip, this is a relevant point. But in the broader scheme of things, the economy is still subdued and looks like it will take some time to reach escape velocity.
Although these figures are not good by any stretch of the imagination, the disappearance of symbolic double dip will give George Osborne a bit of breathing space. This is especially so with Nida Ali, the economic adviser to the Ernst & Young ITEM Club, commenting that there are “signs of an initial recovery in UK trade [and] evidence that the much-needed rebalancing of UK exports towards faster growing nations is continuing”.
That is the background to this article in the Telegraph that reveals that claims of a double dip recession may have been premature and, in fact it is likely that it did not happen at all.
A recession is defined as two consecutive quarters of negative growth. Thus in the first three months of 2012, after it was revealed that the economy shrank by 0.1pc it was decided that we had indeed reached that nadir. However, the paper reveals that the latest estimates of construction activity for the first quarter of 2012 suggest the economy only flatlined. As a result, there may never have been a technical double dip at all.
The Office of National Statistics has now estimated that construction in the first quarter of 2012 contracted by 5pc, not 5.4pc, and that output in the sector was £108m more than previously thought at £25.273bn, a tiny amount that makes all the difference symbolically.
The Telegraph adds that Simon Ward, Henderson’s chief economist, has calculated that the revision means the economy shrank by 0.04pc in the quarter rather than 0.07pc, all else being equal. When this is rounded to the statistical norm, the change means the economy stagnated at 0.0pc rather than shrank 0.1pc. However, confirmation will not come until June, when the ONS officially reviews past estimates, and any change to past calculations of services or industrial production could yet offset the gains made by construction:
Philip Shaw, UK economist at Investec, said: “As things stand, the revisions to the construction data mean that the UK didn’t double dip over the back end of 2011 and beginning of 2012.
“That’s pretty interesting considering there were fears of a triple dip just a few weeks ago. If markets are concerned about the technicalities of a single dip, double dip, or triple dip, this is a relevant point. But in the broader scheme of things, the economy is still subdued and looks like it will take some time to reach escape velocity.
Although these figures are not good by any stretch of the imagination, the disappearance of symbolic double dip will give George Osborne a bit of breathing space. This is especially so with Nida Ali, the economic adviser to the Ernst & Young ITEM Club, commenting that there are “signs of an initial recovery in UK trade [and] evidence that the much-needed rebalancing of UK exports towards faster growing nations is continuing”.
