Cameron grilled on GDP at PMQs

Rolling coverage of all the day’s developments as they happen including prime minister’s questions 12.27pm: Richard Harrington, a Conservative, says Britain lost 1.7m manufacturing jobs under Labour. Cameron says manufacturing is now increasing. 12.26pm: Jonathan Evans, a Conservative, asks Cameron to condemn the European court judgment that will mean women drivers having to pay more for insurance. Cameron says the Labour MEP who welcomed the ruling is an example of the “loony left”. Cameron condemns the court decision. 12.24pm: Labour’s Ian Lucas asks why a hospice in his constituency is having to pay more in tax under the government’s plans. Cameron says the Treasury has increased the gift aid available to charities like hospices. In Wales (Lucas is a Welsh MP) Labour is cutting the NHS budget, Cameron says. 12.23pm: Cameron says he “completely agrees” about the need to take measures to tackle the sexualisation of young children. An inquiry is underway. 12.22pm: Sarah Wollaston, the Conservative former GP, warns that the government health reforms could be disastrous. I’ll post her full quote later. 12.19pm: Instant verdict: Miliband was precise, focused and effective, while Cameron was flanelling. A good outing for the Labour leader. More later. 12.14pm: Miliband asks another question. Why do 98.7% of nurses have no confidence in the health reorganisation? Cameron says that inevitably when you make changes, people have concerns. If Miliband has constructive suggestions, he should say what they are. Miliband says that’s not a very good answer. Why did hospital waiting times fall under Labour year on year, but are rising now month on month? Cameron says Miliband is wrong. Outpatient waiting times fell last month. He criticises the comments made by Miliband about the health bill. Miliband says waiting times are more than 20% up for those waiting more than 18 weeks. That’s because the government is spending money on re-organisation. Why won’t the government scrap its plan. Cameron says he will listen to one doctor, Howard Stoate, the former Labour MP. “Calm down”, he says (Michael Winner-style) to Labour MPs how are heckling him. He quotes Stoate saying GPs have “overwhelming enthusiasm” for the health reforms. 12.12pm: Adrian Sanders, a Liberal Democrat, asks Cameron to set up a judicial inquiry into phone hacking. Cameron says that phone hacking is wrong, but that the police investigation must take priority. Nothing should get in its way. (In other words, he hints that an inquiry could take place at a later stage. But it’s only a very feint hint. Overall, he still sounded negative about the prospect.) 12.11pm: Asked about Andrew Lansley, Cameron says he is doing an “excellent” job. 12.10pm: Nadine Dorries, a Conservative, asks Cameron to condemn a leaflet put out by the Yes to Fairer Votes campaign. It insults parliament, she says. (But she does not explain how.) Cameron says he is glad to see the “no” stickers on display on the Labour benches. 12.10pm: Miliband is saving his next three questions. 12.08pm: Miliband says he is not talking down the economy. The government is producing the “austerity rhetoric”. Cameron says that when Miliband was in the cabinet, there was not one quarter when the economy grew by more than 0.5%. We are now in the year when the Alistair Darling cuts would take place. For every £8 being cut by the government, Labour would be cutting £7. 12.05pm: Ed Miliband starts by echoing the condolences expressed by Cameron. Is it a success or a failure that the economy has flatlined over the last six months? Cameron says it is good that the economy is growing. Miliband predicted a double-dip recession. Will he now apologise? Miliband accuses him of “complacency”. The economy is not even on track to meet the Office for Budget Responsibility’s growth forecasts. Isn’t the government cutting too far, too fast. Cameron says Miliband was desperate for the economy to be back in recession. Why can’t Miliband welcome the fact that it is growing. Miliband mentioned the danger zone, Cameron said. Not dealing with the debt would take Britain into the danger zone. Miliband should admit he was wrong about the deficit. 12.04pm: Brian Binley, a Conservative, asks if there is a connection between the fall in construction in the growth figures and the fall in bank lending to businesses in March of £3.4bn. Cameron says the fall in construction is disappointing. But, overall, the economy is growing. 12.03pm: Jim Shannon, a DUP MP, asks Cameron to condemn attacks on the democratic process in Northern Ireland. Cameron says scenes of people dressed in balaclavas in Northern Ireland are “unacceptable”. 12.00pm: David Cameron starts with a tribute to two soldiers killed in Afghanistan since the last PMQs. He also sends his condolences to the family of the police officer killed in Northern Ireland. “On a happier note”, he says he expects all MPs will want to send their best wishes to Prince William and Kate Middleton. 11.55am: PMQs will be starting shortly, and I’ll be amazed if Ed Milband doesn’t ask David Cameron about the economy. If you want a clear summary of the Labour case against George Osborne, do read the statement Ed Balls put out about the GDP figures, which is now on the Labour party website. 11.52am: And here’s what Alan Johnson, the former Labour home secretary, said at the Yes to Fairer Votes event this morning. I can’t imagine anyone joining a radical, progressive party like the Labour Party and thinking the electoral system is absolutely perfect … I would just make this plea: we were founded on the basis of electoral reform and while John Reid is absolutely right that this should not be about narrow political advantage – although I question whether John isn’t actually leading the ‘no’ campaign precisely for that reason – it should be about saying to the electorate: even though we can win with first-past-the-post, we think it’s a miserably disempowering system that belongs in the past and is not of this age. Labour should not become part of the establishment view. It is against our history, it is against our principles, it is against our ethos. 11.38am: You can read all today’s Guardian politics stories here. And all the politics stories filed yesterday, including some in today’s paper, are here. As for the rest of the papers, here are some articles worth noting. • Stephen Glover in the Daily Mail says the decision not to invite Tony Blair and Gordon Brown to the royal wedding, even though Lady Thatcher and Sir John Major have been invited, is an insult to democracy. It is not merely unclear but mind-boggling that Messrs Blair and Brown should have had to yield to men such as Gabriel Machinga, Zimbabwean Ambassador to London, a loyal servant of President Robert Mugabe’s murderous and kleptomaniac regime. Even less defensible are the invitations sent to leaders who have personally overseen repression. The Crown Prince of Bahrain, who has had more than a hand in the recent crackdown on his own people, has fortunately decided at the last minute not to come … Whatever the explanation, this is a decision that will damage the monarchy more than the feelings of Mr Blair and Mr Brown. Once the Crown appears to be taking sides — and that is the impression, if not the intention — our delicate constitutional arrangements are imperilled. • Kevin Schofield in the Sun says its latest YouGov poll shows the no camp 18 points ahead in the alternative vote campaign. • James Kirkup and Richard Spencer in the Daily Telegraph say David Cameron has told a Tory MP that Britain could give arms to the rebels in Libya. Mr Cameron made his remarks about arms in a letter to Bill Cash, the senior Conservative MP who first raised the prospect of arming the rebels last month. The Prime Minister wrote: “We do not rule out supplying lethal equipment, but we have not taken a decision to do so and there remain legal and practical questions which need to be carefully considered.” • Nick Clegg tells the Independent in an interview that the government has ruled out buying electronic counting machine if Britain switches to the alternative vote. Nick Clegg, the Deputy Prime Minister, told The Independent that votes would still be counted manually if the public vote Yes to AV. He said: “It’s time to put to bed the No campaign’s baseless claim that AV will require expensive new voting machines. I should know. I am the person in government with direct say over our policy on how elections are run. There will be no electronic voting machines. It will not happen. We do not need them. • Roland Watson and Michael Savage in the Times (paywall) says that more than half of Labour MPs are now opposed to the alternative vote, even though Ed Miliband is in favour. New recruits to the “no” campaign mean that for the first time a majority of Labour MPs are publicly opposing the alternative vote, despite Mr Miliband’s lead in favour of change. They include one Labour MP who has switched sides in disgust at the tactics of the “yes” campaign before the referendum on May 5. • Rosa Prince in the Daily Telegraph says Nadine Dorries, the Tory MP, will not face prosecution over her expenses. Police considered her case and passed a file to the Crown Prosecution Service in December. However, after a meeting of the special panel which has been convened to determine cases involving MPs and peers accused of misusing their expenses, prosecutors decided that there was insufficient evidence to secure a successful prosecution. 11.29am: At the Yes to Fairer Votes event this morning, Tim Farron, the Lib Dem president, accused the Thatcher government of practising “organised wickedness”. According to the Press Association, he said he entered politics in the 1980s – and become a supporter electoral reform – as he witnessed “avoidable human misery used as an instrument, a means to an end”. This was organised wickedness, given the veneer of legitimacy by an electoral system that gave 100% of government power to a government that was opposed by 60% of the voters. The Thatcher government was “elected by a corrupt electoral system that predates the empire, predates slavery and which, incidentally, helped to sustain both,” Farron went on. In a concession to his coalition partners, he said that working with the Tories since the election had made him “less tribal”. But he would not “tone down” his views about their record, he said. (You can see why my colleague Nicholas Watt gave Farron the highest “independence rating” when he assessed the likely candidates for next Lib Dem leader.) 11.09am: Nick Clegg has been taking part in an NHS “listening” exercise this morning, part of the consultation about the health bill. As Randeep Ramesh and Rowenna Davis report on their NHS reforms live blog, Clegg didn’t get an easy ride. 10.45am: Ed Balls has put out a lengthy statement about the GDP figures. In it, he responds directly to George Osborne’s claim that the figures are “good news”. (See 10.40am.) If George Osborne thinks zero growth over six months is good news and a sign that the recovery is on track then he is more out of touch and out of his depth that I feared. Here are the key extracts from the rest of the statement. These figures show an economy that has flatlined since the autumn. By making a political choice to cut further and faster than any other major economy this Conservative-led government has choked off the recovery when it should have been secured and pushed up unemployment too. In the six months since George Osborne’s spending review and VAT rise the economy has ground to a complete halt and not grown at all. In contrast, in the previous six months, the economy grew by 1.8%. Moreover the economy has flatlined before the bulk of the spending cuts and tax rises have kicked in. Today’s figure is significantly lower than the Office for Budget Responsibility’s most recent forecast, which has already been downgraded three times. And these figures raise the very real possibility of the OBR having to downgrade its growth forecast for 2011 a fourth time … The Chancellor needs to get his head out of the sand. He doesn’t seem to understand that without jobs and growth you can’t get the deficit down. The slower growth, higher unemployment and higher inflation we now see under George Osborne means he is now set to borrow £46 billion more than he was planning to. That’s a vicious circle and makes no economic sense at all. Families know that cutting too far and too fast is hurting, but now we know it’s not working either. George Osborne can’t keep making excuses – it’s not the wrong kind of snow that’s to blame, it’s the wrong kind of policies. He needs to think again before it’s too late … The warnings we and the Lib Dems made in the general election a year ago that putting up VAT and cutting spending on jobs programmes and school buildings in the last year would put the recovery at risk have now come true – although the Lib Dems have helped make those fears a reality. Before George Osborne ripped up our plan to halve the deficit over four years growth in 2011 was forecast to be 2.6%, but that now looks like an impossible prospect. 10.40am: BBC News has just broadcast footage of George Osborne commenting on the growth figures. He said it was “good news” that the economy was growing. In a very short clip (he made a comment, and took one question from Hugh Pym), I counted the phrase “good news” three times. 10.34am: The reaction to the GDP figures keeps coming in. This is from Tony Dolphin, chief economist at the Institute for Public Policy Research. The ONS’s statisticians believe that December’s appalling weather resulted in a loss of output equal to 0.5 percent of the total. If they are right, then the underlying rate of growth was zero in both the final quarter of 2010 and the first quarter of 2011. In effect, economic growth has ground to a halt. Nowadays, economists define a recession as a period of at least two consecutive quarters of contraction in real GDP. After adjusting for the effects of the weather, the UK has just come as close as it is possible to come to a recession without actually being in one. 10.25am: And here’s Graeme Leach, chief economist at the Institute of Directors, on the growth figures. The preliminary GDP figures are a very mixed bag with grounds for both optimism and pessimism. Pessimists point to the fact that GDP is stagnant with output unchanged over the past 6 months. This is very much in line with the IoD’s long held view that this recovery will be more L than V shaped. Today’s GDP numbers add further weight to the case against an interest rate rise. But the optimists can’t be ignored either. Leaving aside the construction sector – which contracted sharply – overall services output rose strongly (by 0.9 per cent), although this did follow a decline of 0.6 per cent in the previous quarter. Leach also said that the data for the next quarter of 2011 – April to June, or Q2 – would be more important. We shouldn’t place too much emphasis on the Q1 data. The more important figure will be Q2 when we begin to see the squeeze on real incomes really kick-in and what effect this has on consumer spending, together with the implementation of the public spending squeeze. 10.21am: And here’s what David Kern, chief economist at the British Chambers of Commerce, is saying about the GDP figures. These figures were mixed and well below the [Office for Budget Responsibility] prediction that the economy would grow by 0.8% in the quarter. On the basis of these figures, we reiterate our forecast that in 2011 as a whole GDP is likely to grow by 1.4%, much lower than the OBR’s expectation of a 1.7% increase. There are some positive features in these figures, particularly the 1.1% growth in manufacturing and the 0.9% increase in services. But construction fell sharply for a second quarter in a row and the economy’s overall performance is still mediocre. Total economic activity has only just returned to the levels seen in the third quarter of 2010. 10.12am: Vince Cable, the business secretary, is giving evidence to the Commons business committee about the government’s growth strategy. Commenting on today’s figures, he said: If you drill beneath the overall growth figures this morning, you will see that manufacturing growth is being sustained, which is exactly how it should be. But Adrian Bailey, the Labour chairman of the committee, said the 0.5% figure looks “pretty grim, on the surface”. 10.08am: And here’s what John Cridland, the director general of the CBI, is saying about the growth figures. We are seeing a modest rebound in economic growth, recouping the loss in output caused by the bad weather in the fourth quarter of last year. Growth of 0.5% in the first quarter is in line with our expectations and, while encouraging, it does reaffirm our view that the recovery remains slow and sluggish. The main reason the growth figures were not stronger is the contraction in construction, with the overhang into January from the bad weather. February’s construction figures show some recovery. 10.05am: Here’s what the Treasury is saying about the growth figures. It is good news that the economy has returned to growth. Manufacturing is growing strongly, the economy has created thousands of jobs since the turn of the year, and borrowing is down. The government has always expected the recovery to be choppy. But together with continued reminders around the world of the risks facing countries that do not deal with their debts and deficits, today’s data shows that the government has set the right economic course. 10.00am: Heather Stewart and Graeme Wearden are starting to post reaction to the growth figures on their GDP live blog. Schroders describes them as “very stagflationary”. 9.49am: And now the Office for National Statistics has just posted on its website the statistical bulletin with the GDP figures (pdf). Here’s an extract: The chained volume measure of gross domestic product (GDP) rose by 0.5 per cent in the first quarter of 2011, following a fall of 0.5 per cent in the fourth quarter of 2010. The effect of the abnormal weather conditions in December 2010 is estimated to have subtracted 0.5 per cent from growth in the fourth quarter. GDP is estimated now to have returned to the level in the third quarter of 2010 … Production output increased 0.4 per cent, compared with the previous quarter. Output in the construction sector decreased 4.7 per cent and output in the service industries increased 0.9 per cent. Here are some other points in the bulletin. • The construction figures – down 4.7% – are lower than for any quarter since the start of 2009. • The Japanese earthquake did not have an influence on the figures. That’s because insurance claims are not included in GDP figures, and any other effects will have been marginal, the ONS says. 9.38am: The figures are now available on the Office for National Statistics website. 9.37am: Here’s the top of the story that the Press Association has filed on the growth figures. The UK economy returned to modest growth in the first three months of 2011, official figures revealed today, following a shock decline at the end of last year. Gross domestic product (GDP) – a broad measure for the total economy – grew by 0.5% in the first quarter of the year, following an unexpected drop of 0.5% in the final weather-hit quarter of 2010, the Office for National Statistics (ONS) said. But the ONS warned that underlying growth – that is, assuming there was no displacement of activity from the fourth quarter into the first quarter – was broadly flat. Today’s figure is a preliminary estimate and subject to revision. Economists previously warned that growth of less than 1% in the first quarter would be disappointing and the lacklustre performance will raise serious concerns over the economy’s ability to withstand the coalition government’s deficit-busting austerity measures. The sluggish growth is likely to relieve pressure on policymakers at the Bank of England to raise interest rates in the face of soaring inflation. 9.32am: Joe Grice, the ONS’s chief economist, has told a news conference that, if you look back over the last six months, the economy has been “on a plateau”. 9.30am: Growth was 0.5% in the first three months of 2011, the ONS says. 9.28am: And here’s what the FT’s Chris Giles said about the growth figures on Monday. The ONS estimates the bad weather trimmed 0.5 per cent from the level of output in the last quarter of 2010, as building projects stalled, Christmas parties were cancelled, goods went undelivered and pre-Christmas getaways were disrupted. All of this activity should bounce back in the first quarter, automatically raising the growth rate to 0.5 per cent, even if there is no underlying growth in the economy. On top of this, the ONS says, some disrupted output from the fourth quarter of 2010 – goods not delivered until the new year and stalled construction pro­jects, for example – is likely to have been postponed until the first quarter. That means the growth figure should, perhaps, be at least 0.7 per cent before any underlying growth in the economy can be claimed. Add in one quarter of the growth expected in 2011 – about another 0.5 per cent – and the figure necessary to show the economy growing at an average pace in the first quarter is at least 1.2 per cent. 9.22am: With just a few minutes to go until the growth figures are out, Duncan Weldon at Liberal Conspiracy has a meaty analysis of what would constitute a “good” figure for George Osborne. Here’s an extract. In terms of what observers expect, the OBR and the Bank of England have both pencilled in 0.8%. City analysts are more pessimistic with JP Morgan going for a very weak 0.2%, Citi saying 0.5% and Goldman at 0.6%. So, I think it’s fair to say, that any number below 0.5% would be terrible, 0.6% to 1.2% would be merely bad, 1.3% to 1.7% would be reasonable (i.e. what we should expect but nothing to get excited about) and over 1.7% would be good. For example if growth comes out at 1.2%, it will in reality mean that the economy has managed an average pace of growth over the past six months (ahead of the cuts). But that would also be the strongest quarter on quarter growth since 1999 and well ahead of the OBR forecast, something I’m sure certain observers would be very quick to point out. 9.03am: My colleague Graeme Wearden is writing a live blog that will be covering the GDP figures. It’s up now, ready for the announcement at 9.30am. 8.50am: William Hague was on the Today programme at 8.10am. He was asked to explain why Britain and other countries are not intervening in Syria in the way that they are in Libya and he repeated the “fork in the road” warning that he used in his statement to MPs yesterday. According to PoliticsHome, this is how he put it: We are at a different stage at the moment in Syria. They are at a fork in the road. President Assad is at that fork. It may be too late for him to turn back and go down the right prong of the fork, but it is not necessarily too late. Asked how many people would have to die in Syria before the government decided that President Bashar al-Assad had taken the wrong fork, Hague replied: “These things can’t be quantified in that way.” 8.40am: There are two main events coming up today: the publication of the growth figures for the first quarter of 2011 and PMQs. If, as many City experts predict, growth turns out to be lower than the 0.8% expected by the Office for Budget Responsibility, the two stories are likely to collide, because Ed Miliband may well decide to raise growth at the first PMQs for four weeks. Here’s a full list of what’s coming up. 9am: Alan Johnson , the former Labour home secretary, Tim Farron , the Lib Dem president, Nigel Farage , the Ukip leader, and Caroline Lucas , the Green party leader, speak in favour of the alternative vote at a cross-party news conference. 9.30am: The Office for National Statistics publishes the growth figures for the first three months of 2011. As Patrick Wintour reports , the Office for Budget Responsibility predicted growth of 0.8%, but other forecasts are more pessimistic. Another quarter of negative growth would mean that Britain is in recession, but this is not expected. 9.45am: Vince Cable , the business secretary, gives evidence to a Commons committee about the government’s strategy for growth . 10.15am: James Brokenshire , the crime prevention minister, gives evidence to MPs on the closure of the Forensic Science Service . 12pm: David Cameron and Ed Miliband clash at takes prime minister’s questions. 2.30pm: Liam Fox , the defence secretary, gives evidence to the Commons defence committee about Libya . As usual, I’ll be covering all the breaking political news, as well as looking at the papers and bringing you the best politics from the web. I’ll post a lunchtime summary at around 1pm, and an afternoon one at about 4pm. Alternative vote AV referendum Libya William Hague PMQs House of Commons David Cameron Ed Miliband Andrew Sparrow guardian.co.uk

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