From bleak mid-winter to a cold Spring

Reports yesterday indicated the UK economy shrank by less than previously thought in the last three months of 2010 and that, according to fresh data from the Office for National Statistics, gross domestic product (GDP) slipped by 0.5% in the period. Its initial estimate for the quarter suggested that the economy had contracted by 0.5% - with heavy snow blamed for the slump. The 0.5% fall is the largest quarterly contraction since the second quarter of 2009. At the same time as the economy was shrinking, unsecured debt rose by £768m in February, driven by an increase in personal loans and overdrafts, whilst the number of remortgaging loans approved stood at 35,725 in February, the Bank's figures show. This was up from 33,972 the previous month, slightly up on a previous high in November, and higher than the average of the previous six months of 31,674. What does this tell us? Well what it indicates is that more and more people are finding it hard to live within their means. Rising prices and Government cut backs mean nearly 50% of mums say they'll be forced to use savings, earmarked for their family's financial future, to cover household bills over the coming year according to research from Family Investments. The research revealed a staggering 47% of mothers will be cutting their family savings by nearly £400 and channelling the cash into covering their day to day living expenses. And in order to 'balance the books' they will be slashing savings in three ways. Firstly short term savings, typically the money normally saved in instant access accounts, (for this summer's holiday or emergency car repairs); this will be cut by £240 a year. Then there are cuts to the kids' savings by £60 a year; and parents will also be sacrificing their pension savings, which for nearly 20% of us average around £160 a month, in order to boost the household piggy bank. This means a combined total of over £1 billion will be cut from family savings across the country as households struggle to meet spiralling costs on everything from food and petrol to energy bills. And it's those energy bills that are creating the biggest headache; up around £37 a month, with over three quarters of adults worried about how they'll pay them. Over one third of us worry about covering the cost of that weekly supermarket bill which has gone up faster than the rate of inflation, according to research from investment bank UBS, adding another £35 a month to our household spending. And filling the car for the daily school run costs more too; with petrol prices hitting a new record high now topping £6 a gallon, and with the current situation in Libya and the Middle East worsening it means we're unlikely to see pump prices slashed in the near future. For many, things are only going to get worse. Each day we are hearing about redundancies. 1. Sheffield Council are planning 273 redundancies; 2. RAF are predicting 11,000 redundancies 3. Hampshire County Council will lose 1,200 jobs 4. London Midland will lose 1,200 jobs 5. Warwickshire County Council will shed 1,800 jobs 6. Meanwhile in the Royal Mail, two London mail centres could close as part of a Royal Mail restructuring plan, which puts over 700 workers and 1,000 managerial jobs on the chopping block. A further 1,700 head-office posts could go in a future review. 7. Northern Rock is to make 680 more redundancies this year – meaning nearly 4,000 will have been axed since its crash in 2007. The list just goes on and on and on. And what is Cameron’s solution? A nothing budget that will do little to stimulate growth. As for building business? Well Citizen Dave had this to say: "This government is backing small firms, it's getting behind the start-ups, it's getting behind the doers and the grafters who are going to get our economy moving and create the jobs and the wealth and the opportunity that we need." Pretty words Dave, but where is the evidence? You’ve taken away the Regional Development Agencies, you’ve taken away superb organisations like the West Midlands Observatory … and the other observatories around the country, you have done nothing to encourage the construction industry which contracted 2.3% last month alone. Even the service sector – noted for being a substantial employer throughout the country experienced hardships, with a 0.6% contraction last month. What will it take to knock into Citizen Dave, the people’s toff’s head the fundamental notion that is strategy just isn’t working and it is hurting people. The answer may be simple. On May 5th the people will have the opportunity to go to the polls and voice their discontent. In that election I urge every voter to vote for the candidate best able to knock out the sitting Tory or Lib Dem councillor. In wards where the Labour candidate has the highest chance, vote Labour. But if the Green, or Independent candidate is better positioned to win, then vote strategically. Naturally I draw the line on asking anyone to vote BNP or for any of the neo-fascist parties that will put themselves up in May. If we can force Cameron to face a loss of over 1,000 councillors and the loss of all seats in the Welsh and Scottish assemblies he could be forced to review his position. We have a golden opportunity ahead of us – we must not waste it.