Last Updated: 03 February 2011
Created: 03 February 2011
The growth figures released this week were obviously disappointing, but the Office for National Statistics has made it very clear that the fall in GDP – that’s the total value of Britain’s economy - was due largely to the terrible pre-Christmas weather.
We have had the coldest December since records began in 1910 and this has clearly had a much bigger impact on the economy than anyone forecast. It's notable that sectors of the economy that are less affected by the poor weather, such as manufacturing, continue to perform strongly, helping to rebalance our economy.
However, it would be disastrous to change a fiscal plan that has established international credibility on the back of one very cold month. That would plunge Britain back into a financial crisis. As the Governor of the Bank of England and the OECD have both commented, we must stay the course.
We are continuing our rescue mission on the economy - dealing with the huge deficit we inherited was the single most important step towards recovery and growth. Let’s not forget Britain’s credit card was maxed out and we were left with over £1 trillion of government debt. The longer it is left the worse it will get. If we don’t take steps now to live within our means we’ll end up paying higher taxes and face deeper cuts just to pay off our debt. It’s already costing us a staggering £120 million per day just to pay the interest on this debt; money which could otherwise be spent on frontline services, or much needed tax-cuts.
It is clear the annual fuel duty hikes combined with rising oil prices has created a real pressure on growth. With petrol now at £1.30 per litre and rising, hard pressed motorists and businesses are being hit hard. It is essential that we explore a way to introduce a Fair Fuel Stabiliser, and I’m pleased that the Treasury and the Office for Budget Responsibility are assessing a way to implement such a scheme.
Our priority is to be the most pro-growth Government in living memory. Over the next few months we will drive forward a programme with one purpose - creating jobs. To achieve this, we will be announcing further measures to give businesses the added confidence to expand and to create jobs. This is particularly true of small to medium size business, so vital to the recovery. Here in Swindon this will help us continue the welcome and much needed fall in unemployment. Further afield, key to our recovery is international trade. Abroad we will unashamedly talk Britain up - to improve trade and investment so more jobs are created at home. Our message is clear: Britain is open for business.