Ed Balls MP, Labour’s Shadow Chancellor, said in response to today’s revised GDP figures showing the UK economy contracted by 0.6% in the final quarter of 2010:
“These are disappointing figures which confirm that the recovery stalled and the economy contracted at the end of last year, even once the effects of the snow have been taken into account.
“Of course we should always treat one quarter’s figures with caution, but it is not cautious for the Treasury to plough on regardless. George Osborne was complacent in declaring before Christmas that he had saved the economy and secured the recovery. And he is being complacent now in refusing to accept that his choice to cut too deep and too fast is holding back our economy and putting jobs at risk.
“2011 should be the year when the British economy grows strongly and the recovery is secured. Yet the early signs are that the Tory-led Government’s reckless decision to abandon Labour’s plan to halve the deficit over four years has seen the economy take a turn for the worse. We now face the worst of all worlds – unemployment and inflation both rising, growth stalled and consumer confidence collapsed. And this is before the Government’s extreme fiscal tightening really starts to bite.
“The Chancellor appears to be in denial. It is simply not credible for George Osborne to casually dismiss these figures once again and blame the wrong kind of snow rather than the wrong kind of economic policy. If the economy does not grow strongly this year - and make up the ground we lost at the end of 2010 – the Chancellor will have failed his first major test. He should change course before it’s too late.”