Global Recession: The Facts About Britain

Tories exposed

We can expose the Tory portrayal of Britain. The factsheet below does this.

Today the major European economies published their latest figures and it is now clear that countries, such as Germany, are feeling the effects of the global recession more severely than Britain.

Despite what the Tories say, when it comes to debt we are the second-best placed in the G7 - better placed than the US, France, and Germany and second only to Canada. That is why we have been able to give the economy a shot in the arm with tax cuts for hard working families and extra support for small businesses.

What is also clear is that the answer to our problems is not to retreat into isolation, as the Tories would do, but to work together across borders to tackle the challenges we face. That is why the Prime Minister will use the G20 to seek greater co-ordination between countries as we plan for recovery (outlined below).

The plan for recovery:

• The first stage was to save savers by recapitalising the banks.
• The second stage was to give the economy a shot in the arm with increased and focused spending delivered by a fiscal and monetary stimulus. Making sure that we at all times invest in the future.
• The third stage was to get lending going to the people and businesses who need it with our loan guarantee schemes.
• Finally, we are now beginning the fourth stage of the plan to rebalance our economy and increase our exports to the world through key sectors of our economy: low carbon technology; high value added manufacturing; and the digital and creative industries.

This national plan for recovery and jobs will not work overnight but it will make the difference in ensuring that we come through this recession stronger and sooner.

Factsheet

International perspective on the global financial crisis

1) Today’s figures confirm the recession is being felt more severely in Germany and Italy:

1) Today’s figures confirm the recession is being felt more severely in Germany and Italy:

• Germany: GDP contracted 2.1% in Q4 2008, compared with the previous quarter.
• Italy: contracted 1.8%
• UK: contracted 1.5%
• France: contracted 1.2%
• US: contracted 1.0%

(Source: Eurostat, 13/02/09)

2) The UK has the second lowest national debt in the G7:

(Source: IMF World Economic Outlook - October 2008)

The PBR estimates the 2009 deficit in the UK will be 8.0% of GDP.

The Congressional Budget Office estimated the US deficit will be 8.3%, a figure that will rise significantly when the recently agreed $800 billion stimulus is added).

3) Britain and every major economy in the world are taking action to boost the global economy because by working together we can increase the impact - and as President Obama has said, ‘doing nothing is not an option’:

Cutting VAT will save the average family £275 by the end of this year. This action, together with our other measures such as cutting basic rate income tax and increasing pensions will boost the economy so that around 100,000 jobs will be saved compared with if we had done nothing instead.

President Obama said:

"There is no doubt that the cost of this plan will be considerable. It will certainly add to the budget deficit in the short term. But equally certain are the consequences of doing too little or nothing at all, for that will lead to an even greater deficit of jobs, incomes, and confidence in our economy."

"I can tell you that doing nothing is not an option."

The IMF Managing Director said:

"If there has ever been a time in modern economic history when fiscal policy and a fiscal stimulus should be used, it’s now."

When asked where fiscal stimulus was needed, he said:

"Everywhere, everywhere where it is possible."

Nicolas Sarkozy and Angela Merkel said:

"Rapid and decisive public intervention is necessary to prevent irreversible damage to our economies."

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