Monday, January 18, 2010

It's Grim Up North And In Brown's Bunker

It will be grim up North for years to come as cities limp out of recession. And the country faces a "decade of pain" after years of Borrowing Brown's spending binge. A phoney election war is being waged while the country goes down the pan.

The gulf between rich and poor cities is set to widen. The struggling North may even face a second crippling blow to recovery, warns think tank Centre for Cities, which points to the widening economic gap between the haves and the have nots.

Nowhere is this highlighted more than in a tale of two cities, with Bath and Hull (opposite) shown up starkly by the Independent as among the best and worst.

Hull - home to heroin, home secretary Johnson, fish and chips and Prescott. Bath - with cool spas, good transport links, a strong private business base and a well-fed, well-educated, middle-class elite.

It's hell in Hull and grim in Grimsby. Cities and towns, including Barnsley, Doncaster and Stoke have seen a drastic jump in unemployment. It will take years before jobs return to pre-depression levels.

The gap between unemployment in Labour's industrial hearlands and the wealthier South has already more than doubled in a year. Soaring from 4.8 to 8.4 per cent in Hull - but only from 1.4 to 2.1 per cent in Cambridge.

The outlook is grim for youngsters on the wrong side of the divide. Figures out this week are set to show unemployment topping 2.5million - with nearly a million 16 to 24-year-olds on the dole. The grim survey is more grim evidence of the grim economic devastation caused by Borrowing Brown's grim recession. Grim cities hit hardest were already suffering before struck down by savage recession.

Private sector jobs have been slashed after the 'boom' years' growth propped up by ballooning debt, relying now on the sham of public sector non-jobs. Cities are paying a high price for a decade of New Labour's failure and incompetence with young people bearing the brunt.

Recovery will be long and hard. Without a surgical strategy, there is no end in sight for this painful tale of two types of city.

Centre for Cities chief executive, Dermot Finch, said: "Figures this month will likely show the recession is technically over - but it won't feel like that in many places for a long time."

Back in the 'Barmy' Bunker, the country faces a "decade of pain" as the cost of Borrowing Brown's spending spree stifles economic recovery, warns leading economic forecaster Ernst & Young ITEM Club. Growth this year and next would be far lower than government forecasts. And they claimed massive debts mean the country faces a decade of "painful readjustment" as taxes rise and public spending is slashed.

Chief economic adviser, Peter Spencer, said: "We are no longer in a position to borrow - the massive debts that we racked up in the last decade now need to be repaid."

Official figures due later this month may well confirm the country pulled out of recession in the final months of 2009 but ITEM put this down to emergency measures such as the 'cash-for-bangers' scrappage scheme which have propped up spending.

No doubt the government will make a song and dance with the boast that the country is coming out of recession depression. But that's nowhere near recovery with little growth in what will be a "challenging year" ahead, notes Bloomberg.

"Once the effects of these temporary stimuli have worn off, it is difficult to see where the growth is going to come from in the short-term," said Spencer.

The Orange Party has long believed the key to the country's recovery and salvation is manufacturing. The ITEM report said the economy faces stagnation unless the economy changes from borrow-and-spend to being more export driven.

But with manufacturing decimated, saving the economy with an export-led boost is a forlorn, false hope.

What is clear is that the country is no longer in a position to borrow. ITEM added that it "remained concerned" over the UK's dire public finances, with net borrowing set to soar to a record £178 billion this year.

Those massive debts racked up in the last decade of deceit now need to be repaid. The Bank of England will have to stop printing money sometime to halt rampant inflation.

Manufacturing is on its last legs. The government cannot borrow and spend to fuel an economic revival. The public just doesn't trust New Labour's half-baked election 'pledges'. When they got there, the treasury coffers were bare.

Election weary voters and struggling businesses need a general election now. Only then can a fresh start be made on the tough decisions needed to set the country on the rocky road to recovery. Fat chance.

Unemployment graphic: Sun

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