The latest provisional GDP figures from the Office for National Statistics show a dip of 0.3 percent during the final quarter of 2012. In addition to the usual cautions about subsequent revision as more data come in, there were two further caveats. Disruption and late repairs to North Sea oilfields is reckoned to have knocked GDP by 0.2 percent, while the post-Olympic effect would have taken off an estimated further 0.2 percent. The government could claim that the economy would have grown by 0.1 percent in the final quarter of 2012 without those two effects, but even this would still have been a poor performance after several sluggish years.
What the figures do indicate is a need, becoming more urgent every day now, of measures to boost growth. Siren voices call for more public spending or for measures to boost private spending, whereas it is investment that is needed, and investment requires confidence. It has to be made easier for new businesses to start up and to prosper, and the one proven way to bring this about is through lower taxes and a lighter regulatory burden. Instead of talking about bringing in more taxes by a clamp-down on avoidance, the government should be introducing measures to broaden the economic base by making investment and expansion worthwhile.
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