Belfast Telegraph

Recovery will be a 'long haul' for Britain

By Andrew Woodcock

Britain's economy will not return to normal for another two or three years, Justice Secretary Kenneth Clarke has warned.

Painting a gloomy picture of the coming period, Mr Clarke said it would be a "long haul" before the economy fully recovers from recession.

His comments followed GDP figures yesterday showing Britain went into negative growth in the last quarter of 2010. And they come after a warning from Bank of England governor Mervyn King of a "choppy" recovery which will see real wages plunge back to 2005 levels.

Mr Clarke - a former Chancellor - told BBC2's The Daily Politics: "I think we face a difficult two or three years before we are back to normality and we have got to get people to understand that.

"We mustn't make people think that whoever was in government could say 'Nasty six months, but now it's marvellous, this year's going to be great, we are going to see great growth, we have solved all the problems'.

"People have got to understand - as the governor was trying to tell them last night - that it is going to be a long haul. We have got ourselves into a real mess."

But Mr Clarke said that Tuesday's GDP figures, which showed the economy shrank by 0.5% in the last three months of 2010, did not mean growth had stalled.

"So far we are actually doing better than most people expected by way of growth, though the latest figures are not good," he said.

Shadow chief secretary to the Treasury Angela Eagle seized on the Justice Secretary's remarks.

"Ken Clarke's warning of several difficult years ahead is in sharp contrast to David Cameron and George Osborne's complacency," she said.

"Their boasts before Christmas that Britain was recovering and out of the danger zone are looking pretty hollow now that the economy has ground to a halt and both unemployment and inflation are rising.

"When Labour left office inflation was low, unemployment was falling and economic growth was strengthening. But after George Osborne's Budget and spending review the economy has taken a turn for the worse and that's before the VAT rise and the bulk of the spending cuts have kicked in."