The claim
“I have just seen this morning the report from the European Commission. That if we continue to pursue the policies that we are pursuing, then Britain will lead Europe in growth and in jobs over the next year.”
Gordon Brown, speaking at Bradford University, 5 May 2010
The background
On the last day of the campaign, the prime minister was keen to play what he sees as one of his trump cards – safe-guarding the economy.
Brown claimed today that EU forecasts showed that Britain “will lead Europe in growth over the next year”. Is he right?
The analysis
Brown was referring to a forecast by the European Commission published today suggesting Britain would recover strongly from the recession next year.
The 223-page report does indeed acknowledge that: “The recovery in the United Kingdom is expected to gather momentum during 2010, suggesting that its annual Gross Domestic Product (GDP) growth could close to double from 1.25 per cent this year to about 2 per cent next.”
However, the table (table 1) comparing the GDP growth forecasts of all the EU countries shows the UK will not exactly be ‘leading’ in growth.
The UK’s GDP growth forecast is 1.2 per cent for 2010, which puts it behind: Belgium (1.3), France (1.3), Luxembourg (2.0), Holland (1.3), Austria (1.3), Slovakia (2.7), Finland (1.4), Czech Republic (1.6), Denmark (1.6), Poland (2.7), and Sweden (1.8).
While the UK’s GDP growth forecast is a much higher 2.1 per cent for 2011, that still puts it behind: Ireland (3.0), Luxembourg (2.4), Slovakia (3.6), Bulgaria (2.7), Czech Republic (2.4), Estonia (3.8), Latvia (3.3), Lithuania (3.5), Hungary (2.8), Poland (3.3), Romania (3.5), and Sweden (2.5).
Not the actual lead on growth then, although it is only fair to point out that the UK’s forecasts are above the overall Euro area predictions of 0.9 per cent in 2010, and 1.5 per cent in 2011.
In 2011, the UK’s forecast is also bigger than those of Europe’s other major economies, with whom Britain would conventionally be compared, such as: Germany, France, Spain and Italy.
And many of the countries who are showing greater growth forecasts than the UK for 2010 and 2011 are nations which have much smaller economies, have suffered much deeper recessions, and are re-starting growth from a much lower point than the UK.
It could also be argued that growth of 2.1 per cent for 2011 in the UK is actually greater than growth of, for example, 3.3 per cent in Poland, because the UK has a bigger economy – and therefore in terms of total volume of wealth the growth is bigger.
The Labour party said tonight: “The European Commission’s report shows again that our judgement call to support the economy was right… They also show that the Commission expects the UK to grow more quickly than other major European countries next year – including Germany, France, Italy, and the Netherlands.”
As a footnote, further reading of the report (table 37) presents a less rosy economic picture for Brown.
It predicts UK net borrowing will be 12 per cent of GDP in 2010 – a higher proportion than any other country in the 27-member block.
The verdict
Brown’s boast this morning implied that the UK will enjoy better growth than any other country in Europe in the next year.
While the forecasts make promising predictions for the UK in comparison to its traditional European rivals it is not technically in the lead overall but, as economists have pointed out to us, it is perfectly legitimate for the prime minister to compare the country to other major economies rather than much smaller ones.
However, he fails to give equal prominence to his huge borrowing figures suggesting the future is not as bright as the PM would like to make out.
