It’s All Over Now….Or Maybe Not….

It’s official – we are out of recession , albeit not very convincingly, with growth of only 0.1%. This is of course subject to revision because the Office For National Statistics (ONS) have so far only received 40% of the information that is required to make the necessary calculations. Therefore it could go up (hooray!), or it could go down (boo!), which then means the recession is not over after all.


I am not an economist but growth of 0.1% doesn’t appear to be particularly impressive, particularly given all of the stimulus that has taken place so far, and the fact that we have had Christmas and a pre-VAT increase spending splurge as well.

Anyway time will tell as to where we are statistically, but in the real world there remains a lot of uncertainty, which is not going to go away whatever the figures say.

However something else recently caught my eye, which is a little more concerning, and probably has a greater bearing on our long term growth prospects. According to research from Manchester’s Centre for Research in Socio-Cultural Change (CRESC) the expansion of public sector activities has been the main engine of growth in the economy since 1998, and has largely masked the decline of the private sector .

Quoting from the abstract of their report, their argument is that “the UK has an undisclosed model of using publicly supported employment to cover the continuing failure of the private sector to generate and distribute welfare through job creation”. In essence, according to CRESC, even the increase in private sector jobs over the past twelve years has primarily been the result of public sector activities.

Strong stuff but is it fair? We are all aware of the continued jibes about the growth in public sector “non jobs” over the past few years, but the thought that all those “productive” private sector jobs owe their existence to the state as well takes some getting used to.

Perhaps it is time for the “entrepreneurial” private sector to fight back and show how it can efficiently and effectively “generate and distribute welfare through job creation”. The country certainly needs it to happen.