Out of recession

This morning's news that Britain is finally out of recession is hardly a great surprise. And the rate of growth in the last quarter may have been low. But it is welcome news, despite David Cameron's best efforts to rubbish the Government over it yesterday. There is a lot talked about what was done wrong during this recession. But credit where it is due, a lot has also been done right. The banks were saved from collapse by an intervention that may be controversial now, but for which there was no alternative. Unemployment has not risen as high as most pundits expected, nor have there been the repossessions there were in the 90s. One reason for that is surely the successful way that many of our best run firms weathered the rececession. Of course, there is still a big problem with youth unemployment, and Gordon Brown's announcement yesterday should help. But had we taken Cameron and George Osborne's advice that we should not only have had no stimulus and no quantitative easing, but that we should have slashed spending eighteen months ago, this would certainly not have been the case.

I have no doubt that we need a clear plan to bring the budget deficit down over the next five years, and that the Budget should start to set it out. However, we must try to strike a balance between gaining the benefits from future growth - including tax revenues - and spending cuts. The idea that 17% cuts can be absorbed easily in many aspects of public spending is wishful thinking. Even the smaller than expected unemployment rate makes a difference to potential revenues. A little humility from Osborne and Cameron on this of all days might show that they had even a little understanding of this.