Wednesday, 22 April 2009

The 3.5% Growth Myth

I've been trying to find historical data that would back up Alistair Darling and Yvette Cooper's claim that we can bounce back to a sustained level of 3.5% growth. What I did find was the OECD figures back to 1970. Firstly though lets look at the figures since Labour came to power.

Even with the dot com boom coinciding with the start of that period of growth 3,5% was never sustainable. Something that Darling seemed to indicate in his budget speech earlier. Indeed 2.5% seems to have been closer to the mean over this period of sustained growth. Taking out the first 3 1/2 years that coincided with that boom it was actually 2.58%. Over the first 10 years of Labour it averaged 2.95%.

However, the claim I heard from Yvette Cooper on Channel 4 News when I finally got in through the door was that after periods of recession we have often bounced back very strong. Looking at the data yes we have had times of recovery to 3.5% or above, but maybe for only a year or two. Darling this afternoon seemed to promise at least 4 years, if not more, of that level of growth. Also the other times that the woes of the world took our growth down we came out of it on the worldwide recovery to that level if it happened. It was outwith the control of the man carrying the Gladstone dispatch box.

Of course one country is sustaining that sort of level of economic growth, China. So maybe that is why the civil liberties in this country are being eroded so much we are going to follow the Chinese example in all things.

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