Growth forecasts dependent on global co-operation

David Cameron asked Gordon Brown today whether he was willing to repeat the growth forecasts made in the Pre-Budget Report.

Brown refused to do so instead claiming that whether they are met will depend on international co-operation.

This is interesting as this is not what the Chancellor told us back in November.

Then, Alistair Darling made bold, optimistic growth forecasts saying the economy will start growing again in the third quarter of this year, with steady, modest growth of 1.5 and 2 percent in 2010.

The reason for this was, in Darling's own words, “because of decisions taken in the Pre-Budget Report.” In other words, because of the government’s much trumpeted fiscal stimulus – namely, its VAT cut.

But now both Alistair Darling and Gordon Brown have been backtracking from these forecasts in recent weeks and they have come up with this spurious argument that it is all down to "international co-operation" whether the forecasts are met, and nothing to do with its own policies.

Therefore, we now have the situation where the government is trying to claim 1) that the recession is absolutely nothing to do with them but was the result of America and 2) whether we move out of recession is again down to whether those bloody foreigners pull their finger out.

You can see it now, Brown arguing in a soft, cosy interview with Andrew Marr on a Sunday morning that he did everything possible to save the British economy. Unfortunately, other countries did not pull their weight. Not only did they drag Britain into this crisis, they failed to lend us a hand and pull us out!

But this is a specious argument, with Brown trying to have it both ways. Brown tells us at every opportunity he gets how the Conservatives are "isolated" and "outside the global consensus" about implementing a fiscal stimulus. He did so again during PMQs.

Is he really going to ask us to believe that, on the one hand, every country in the world is establishing a globally co-ordinated fiscal stimulus, but on the other hand, he is going to blame these countries for not sufficiently co-ordinating their fiscal stimuli and thus are responsible for Britain failing to hit the government's optimistic growth forecasts and hence endure a longer, deeper recession?

If he is, the man is bonkers!

Either countries are signing up to an internationally co-ordinated fiscal stimulus or they are not. They cannot be both.The reason for the new spin from Brown – growth forecasts dependent on international co-operation – is that he needs something to counter Conservative claims that his growth forecasts will not be met because his fiscal stimulus is a failure.This is a problem of the government’s own making. Choosing to announce growth forecasts that were more optimistic than independent forecasters was a mistake heading into a recession. They created a rod for their own back by then tying their forecasts to the measures they took in the Pre-Budget Report.

Unfortunately for Brown, this new spin just will not wash (no pun intended).