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The economy needs more than the Olympics to perk it up

13 August 2012

3:00 PM

13 August 2012

3:00 PM

We won’t know the economic impact of the Olympics until the GDP figures for the third quarter of this year are released, but today both Boris Johnson and Downing Street tried to strike an upbeat note.

In his Telegraph column, the Mayor of London writes:

‘As we marvel at what they have done, and the general success of the Games so far, I want to issue a general word of caution to the Olympo-sceptics, who will be itching to return to their gripes. They will say there will be no increase in sporting participation, and no economic benefits, and that we will not succeed in regenerating east London. Well, just remember one thing, everyone. These Olympo-sceptics were proved decisively wrong about the Games. They will be proved wrong about the legacy as well.’

Johnson enlarged on this at a press conference this morning, where he said the early indications that the gains from the Games could reach £13 billion, saying that most people ‘will think the money well spent’.

And at lobby briefing, the Prime Minister’s official spokesman said:

‘We think that there will be economic benefits associated with the Olympic Games and we set out that we thought they would be of the order of £13 billion… There are significant economic headwinds because of what’s happening in the eurozone and there are also problems that need to be addressed and we need to rebalance the UK economy and that process is going to take some time.’

The Olympics were never really about raising money for Britain’s coffers, anyway. Whether or not they do have a positive impact on growth, there remains a larger problem with the government’s current approach to bringing the economy back to full fitness, and while Boris was full of praise and warm words today, let’s not forget that he joined a large rump of worried Tory backbenchers yesterday to press ministers to go further on supply-side reform.

His comments to the Sunday Telegraph were obviously a clever means of reaching across the river to those he might need in the years to come if and when he does launch his bid for the Conservative leadership. But they also show a growing unease at the government’s reluctance to make reforms that business leaders are crying out for.

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