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Hopes of a swift end to the recession were crushed today by disastrous figures showing the economy shrinking at its fastest rate on record.
Britain's GDP slumped by 0.8 per cent between April and June, less than the 2.4 per cent in the first quarter, but a far bigger contraction than forecast by City economists and the Treasury.
Most experts had predicted 0.3 or 0.4 per cent and one said the numbers were “a really nasty and disappointing shock”.
It was the fifth consecutive quarter of recession, matching the length of the early-Eighties and early-Nineties slumps. The economy has now withered by 5.6 per cent in a year, the steepest fall since official quarterly records began in 1955 and almost certainly the worst decline since the Great Depression.
Some economists are now writing off the chances of the economy starting to grow again at all this year, suggesting optimistic talk of “green shoots” and a “V-shaped recession” have been hopelessly premature.
Corin Taylor, senior policy adviser at the Institute of Directors, said: “It looks like this recession still has some way to go, and we don't expect growth to resume before 2010. It will be a long, slow path back to recovery.”
The length and depth of the “Brown Recession” makes it comparable to the early-Eighties downturn at the start of the Thatcher years, when unemployment hit 3.3 million and did not drop below 2 million again until 1997.
Today's announcement from the Office for National Statistics highlights the extraordinary scale of the shock to huge swathes of the economy.
Output in the construction industry is down 14.7 per cent in a year, the biggest fall since records began in 1948 while industry as a whole is down 12 per cent.
The only glimmer of light came from manufacturing, where the second quarter fall in output of 0.3 per cent was the best since the first quarter of last year, and a vast improvement from the 5.5 per cent in the first quarter of this year.
The British economy as a whole is now the same size as it was at the end of 2005, suggesting that this recession will have wiped out four years of growth by the time it is over.
TUC general secretary Brendan Barber said: “There are no green shoots here. Unemployment is growing and a recovery that brings hope to the jobless looks ever more distant. Immediate big spending cuts are the last thing we need. They could tip the economy into an ever deeper downturn and make the deficit worse when the tax take falls and spending on unemployment goes up. With consumers and companies failing to spend, the public sector must fill the gap.”
In a further indicator of the impact of the slowdown, car production figures show a 30.2 per cent fall in the number of vehicles made in June compared with last year. However, this compares with falls of 43 per cent in May and 55.3 per cent in April.
Howard Archer, chief UK and European economist at forecasters IHS Global Insight, said: “The second quarter GDP data are a really nasty and disappointing shock, with the rate of contraction slowing far less markedly than expected.
“It is very hard to put any positive spin on GDP contraction of 0.8 per cent quarter-on-quarter, even if it was down substantially from drops of 2.4 per cent quarter-on-quarter in the first quarter and 1.8 per cent quarter-on-quarter in the fourth quarter of 2008.”
Reader views (57)
Gordon Brown is jinx - anything he touches turns to dust. The best thing Gordon Brow could do for the country is to resign. Gordon Brown, take note, you are NOT fit to run the country, we don't want you to lead the country, go back and teach! You just don't know what you are doing.
- Max, London, 27/07/2009 00:17
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Go on Gorden just go and get your big fat job with some grand name, just like your old buddy Tony. Don't worry about us! New Labour, my foot you will have to think up a better name then that, oh yes I have it, liar liar.
- Martha, London, 26/07/2009 21:42
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I'm 68 ex RAF and really do despair that it does seem likely that my country will be joining the new 'Super' EU even though the majority have said they don't want it. Also none of the main parties share my worries about the way unlimited immigration has created a housing problem and wrecked social cohesion..
Although a lifetime Conservative voter I'll be voting BNP or UKIP mext time.
- Richard, London, 25/07/2009 21:05
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Green shoots? We are in the "J"economy. Look at the letter 'J": First the long stroke down. Second a slight bend as the economy starts to straighten out and flat line. Third the very short straight line at the economy flatten out. Fourth the line stops dead. So does the economy. The "J" economy got it"? Nobody can forecast what will happen. Oblivion?
- Albert Hall, hove england, 24/07/2009 19:48
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I'm not sure who this man G. Brown is. I'm waiting for the real Prime Minister Lord 'Ok , so I had to resign from government twice...' Mandelson to make a statement.Then we'll know how rattled the atheistic- socialist experiment is.
- Richard Meredith, huntingdon, 24/07/2009 19:47
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Brown won't resign no matter what. He's determined to deliver the U.K. as one of the 27 new provinces to 'his E.U. masters'. If the Irish give in to the bullying and blackmail in October (as expected), then the U.K. and the other 26 will officially become provinces of the new E.U. federal nation-state (country) on 1 January 2010. When you're standing on the north bank of the Thames counting down the seconds to the new year, think of that. You'll be counting down an end to the U.K. after 303 years! For those who think that the U.K. is a country, please take the time to look up the definition of 'country'. A country is a self-governing territory. Already 80% of new laws governing the British are passed offshore (and rubber-stamped in London to cover up their origin). At least the U.S. and Canadian federal governments take the time to write directly to their citizens rather than try to hide their existence and make it appear that only the provincial governments exist.
- Phil Jones, London UK, 24/07/2009 18:55
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"If the result is as predicted here, why try to clean up MPs expenses. The electorate obviously don't mind having sleazy, cheating, MPs representing them, as long as they are Conservatives."
Obtuse Val? I don't think so. I can only go by WHAT you said, not by what you may or may not have meant. That statement is a blanket accusation against ALL Conservative MPs, which includes this young lady. I dunno, perhaps 'disingenuous' might be a word I could throw back at you for the sake of being playful with words.
- Rogan, Irving, 24/07/2009 18:51
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When will Brown and his master "Lord" Mandelspin realise that by not calling a gen election now they are condemning the Labour party to a generation in opposition?
- St, London, 24/07/2009 17:17
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Nobody has a crystal ball but at last two facts seem crystal clear:
1. Unemployment is rising at an unprecedented rate, now mostly in secondary supportive industries, like creative services.
2. Government spending continues unchecked (for now).
Everyone does well on a rising tide, but the plain truth is that, whatever shape this recession turns out to be, we will have to wait a good few years to feel that surge tide floating us all high again with both private and public sector growing. I am afraid there is no escaping the fact that it is going to be a lot of hard work and we are going to see both winners and losers for quite a while to come. If you want to be on the winning side, now is time to think through your strategy and to put in place plans to protect and grow your business.
Rose Lewis, Pembridge Partners LLP www.pembridge.net
- Rose Lewis, London UK, 24/07/2009 16:39
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To Thomas Hayes - Yes, and we also remember Labours Callaghan having to go begging, cap in hand, to the IMF.
- Dee Jay, Fleet UK, 24/07/2009 16:31
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The political correct Labour party reaps what it sow's !
- Joe, Swanley Kent, 24/07/2009 16:13
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#Malcolm
0.8% is a vast improvement on the 2.4% of the previous quarter. Everyone puts a different interpretation on the figures, depending on what point they wish to make. I will lay a bet that there will be solid evidence of a recovery in the third quarter as predicted by Alistair Darling. Don't forget all these figures stand to be corrected as they are only snapshots when they are published.
#Rogan
Are you just being deliberately obtuse? In this instance the vote was for the party not the candidate. I am sure in years to come, with some experience, Chloe Smith will prove very able, but the fact is voters from all parties agreed Ian Gibson was an A+ MP who was admired by all. If you choose to interpret my comments as classing Miss Smith with the rest of the Conservative expense cheats, that is a matter for you. Just read the news today that tells us Julie Kirkbride is likely to be selected to stand for Bromsgrove again, despite her and her husband's double dipping on the ACA. He has not even repaid any money and yet we know he claimed for a second home that was not even his. What is David Cameron going to do about those local party chairmen who are obviously ignoring his wishes in the matter of the deselection of proven cheats? At least Gordon Brown punished Ian Gibson, even if it has come back to bite him. It wouldn't matter what he said or did, he would still be wrong.
#Iskeith Real
For the umpteenth time, I am UK domiciled for tax purposes.
- Mrs V Daniels, Mijas Costa, Spain, 24/07/2009 16:12
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The Labour party may have some incompetent people in at the present time but they are still the party who have the common interest at heart and not the interests of the rich and big business so, keep the Tories in the wilderness for as long as possible. Remember Thatcher.!
T H Leeds
- Thomas Hayes, Leeds UK, 24/07/2009 15:54
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#Malcolm
0.8% is a vast improvement on the 2.4% of the previous quarter. Everyone puts a different interpretation on the figures, depending on what point they wish to make. I will lay a bet that there will be solid evidence of a recovery in the third quarter as predicted by Alistair Darling. Don't forget all these figures stand to be corrected as they are only snapshots when they are published.
- Mrs V Daniels, Mijas Costa, Spain, 24/07/2009 15:46
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Keith from Luton (& Val from Mijas)
"...the rest of the country is totally blind to how brilliant Gordon Brown and Labour are and how they are pulling us out of the recession"
So where exactly is this "recovery" that Gordon is supposed to be leading?? The only "blindness" around here is your TOTAL BLINDNESS to the disaster that is (and always has been)New Labour. Time to wake up both of you before it's too late
- Malcolm, London, 24/07/2009 14:51
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Do we really need a wet-behinf-the-ears twenty-something MP?
Chloe Smith looks as if she could be the Labour MP Ruth Kell's daughter. She even speaks like her.
I don't think that anyone would dispute that she has an androgynous appearance. I was under the impression that what was wanted were more female MPs, prefereably with life experience, not very young females who look like boys.
- Malcolm Buckmaster, Broadstairs, England, 24/07/2009 14:47
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Blimey this seems to be the Keith Price comment special. Three comments already no doubt posted on his Unison purchased laptop in his union members time.. A bit greedy isn't it keith? Suppose the application is in for selection in a Labour safe seat( unionsponsored of course) Breaking news Keith even the attribute of greed won't help as it's delusion to contemplate such a thing as a safe labour seat. Mijas might look a btter place post 2010 where all those in denial can gather in tax exile with redf Val.
- John, baldock, 24/07/2009 14:45
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I'm sorry, Keith and Val - I just want to get this right. You're saying this political newbie is a cheat, a liar and sleazy - just because she is Conservative? "Objective" comments like that are pretty dumb, as are all rote claims, when applied to Labour MPs, and are no less so when applied to the Tories or any other. "Sour grapes"? That doesn't come close to your nonsense.
By all means, attack the policies if you don't like them, that's politics. Attacking the person is just cheap theatrics.
- Rogan, Irving, 24/07/2009 14:36
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Ah Keith........I do admire your enthusiasm for the labour party. Perhaps you should move to China or North Korea where respect for The Communist Party is better received.
But to your comment about 'the country being blind to how brilliant Gordon and the Labour Party are', you are entirely wrong. The country is now starting to see what balls up the government has made of the place and how it dictates to us without a fair debate (Euro treaty referendum anyone?). Now we've had enough lies and spin. Time for change.
Bye bye Gordon don't forget to close the door on your way out.
- Pete, Leigh on Sea, 24/07/2009 14:36
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The real worrying thing here is that there are 6000 people still voting for these sickening traitors.
- Lb, London, 24/07/2009 14:35
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Conservatives do not force by elections their constituencies do that that is democracy Labour forced Ian Gibson out they never even gave the constuency a chance to vote on it that is very soviet style politics. If constituencies still wish to keep an MP who has an expense scandal then you cannot really do anything about it. In a democratic society you have to accept the will of the people and I think David Camerons Tories have done a brilliant job we want Labour out before they completely wreck the country. Brown is not bothered about the country as long as he has his pay and gold plated pension the house that we have bought all he has ever done is how to get the torries on the back foot he has never put us before party politics and by the way Chloe Smith is not sleaze ridden she has never claimed anything
- Jacqui Williams, peterborough cambs, 24/07/2009 14:32
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Shy Unsion official as usual gives us his comedy routine.This wannabe Frank Carson(it's the way he tells them" would be funny if he meant to be.
"the rest of the country is totally blind to how brilliant Gordon Brown and Labour are and how they are pulling us out of the recession."£
Well those in the lunatic asylum thinks it's the rest of the world,the majority , that are insane so what does this tell us about shy Keith and his compulsive, repetetive psoting disorder? Val as usual seems to want her few pence worth without paying for it. Come on Val how many times have you been asked if you are a UK tapayer currently and like your fellow traveller Keith succombed to you natural shyness.
If Brown is so brilliant perhaps Keith could enlighten us as to why todays figure that GDP SHRUNK by 0.8% rather than the predicted merely DISASTROUS 0.3%
Come on Keith,instead of your moronic praise of Brown perhaps you might elucidate the merit and values of his brilliance. Example on a ball point tip please.
- Iskeith Real, farfrom lutonlalaland, 24/07/2009 14:25
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So what do we gain!OK the Cons may win the next election,and the merry go round will continue,more of the same,just delivered by a different party.
- Kev, London-UK, 24/07/2009 14:24
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Keith Price - "Val - What are we going to do????"
Don't worry Keith, you're in good company. Gordon Brown and the rest of your Labour clowns don't have a clue what to do either - LOL!!!
- Malcolm, London, 24/07/2009 14:22
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Have a nice weekend Mr Brown youv'e destroyed the country's economy and the Labour party. Just what will it take to make you go. I wouldn't wish Swine Flu on him but I do wish he would become homesick.
- Robin Brittain, Wolverhampton UK, 24/07/2009 14:13
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That is a picture of a man in B I G trouble!!!!!
- Goggs, London, 24/07/2009 14:07
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Just listen to Chloe Smith and you can see that she is smart, well educated and articulate young lady. A welcomed breath of fresh air. Labour may well be able to pin a rossette on a donkey in other parts of the country and it would get elected purely because of tribal politics. But here in Norfolk we are more discerning.Ian Gibson was a brilliant MP, widely supported because he was a MP for everyone. Chloe certainly has a hard act to follow. However Labour ought not to be concerned by the obvious drumming by the tories at the next general election; but should be really worried by the increasing support for the Libs and UKIP which today nearly put Labour into 3rd or even 4th place. Gordon Brown failed to put an appearance in at Norwich and even had a question put to him at the No10 news conference about why he wasn`t coming to Norwich edited from No10 website! (he actually lost his temper when replying to the Norfolk questioner) If he come to Norwich Chloe`s winning margin, which was totally beyond anyones expectations, would have been even greater. After today I predict Gordon will be gone in the autumn. If not, all the tories and the other parties have to do is to put an image of him on their campaign leaflets - that will ensure labour will be in the wilderness for years to come. What`s round comes round.
- B Gare, Norfolk Gorleston, 24/07/2009 14:04
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The BBC has just stated this was a bad day for the Conservatives, as they should have done better. In BBC speak it was a good day for Labour as they still came second.
So the Aussies can hold their heads high they at least came second in the last cricket match.
If anyone doubts who writes the scripts for the BBC they now know.
- Ian, Reading, England, 24/07/2009 13:52
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To Val Daniels - lots of sour grapes in Spain then.
- Dee Jay, Fleet UK, 24/07/2009 13:51
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"it seems that everyone is so sick of us that they will vote for anyone BUT Labour. What are we going to do????"
Keith finally gets it.
- Kevin T, Beckenham, Kent, 24/07/2009 13:49
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To Keith Price, ha,ha,ha,ha.
- Dee Jay, Fleet UK, 24/07/2009 13:46
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Even after this result there are Labour Ministers with their heads in the sand. When asked why the people of Norwich had voted so anti Labour one Minister as usual didn't answer the question but stated that the economy was on course Labour was doing everything right and would be re elected next year?
- Tony Johnson, Hythe UK, 24/07/2009 13:39
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We need a general election soon. Labour have wasted 13 years and nobody is even listening to them as we know they will be the losers at the next election. They are totally out of touch on all policy matters and the economic situation both in the UK and globally.
- Ian, Dartford, UK, 24/07/2009 13:23
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Gorden Brown, speaking with lies.......
Off you trot.
- Rod, Epping, UK, 24/07/2009 13:21
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"If the result is as predicted here, why try to clean up MPs expenses. The electorate obviously don't mind having sleazy, cheating, MPs representing them, as long as they are Conservatives."
Val to you point it seems that the rest of the country is totally blind to how brilliant Gordon Brown and Labour are and how they are pulling us out of the recession. I don't understand how it seems that everyone is so sick of us that they will vote for anyone BUT Labour. What are we going to do????
- Keith Price, Luton, 24/07/2009 13:19
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45% turnout is about normal for a by-election. Glenrothes was 52%, Glasgow East 42%.
- Kevin T, Beckenham, Kent, 24/07/2009 13:12
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Politicians from all parties can be blamed for the expenses scandal, but only one party can be blamed for the present horrendous state of our nation. This has dragged on for far too long, and it is soul destroying that Gordon is going to continue to drag this out until next May. Norwich North is a small taster of what the nation feels. Give us an election now so we can all show how we feel.
- Xtremely Worried, Britain (Formerly Great), 24/07/2009 13:05
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Bit like the general election of 2004, ahh Keith. Labour wins power - elected by a minority. Val, your comments sound a bit like sour grapes. When you liebour guys wake up you will realise its not just about "expenses". Perhaps then and only then will you have even the slimist chance of winning the next election.
- Chris, Rochester, 24/07/2009 13:03
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were there other candidates in this election? , or just two, there is no mention of others, such as ukip. or bnp, greens , or others its as if they did no exist, so we have a two parties only in britain soon we might just have one , and they will ban the others as the press wont menttion them, as now.
- Londoner432, london uk, 24/07/2009 12:58
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I think it shows that Joe Public hasn't fallen for the spin that the economy is getting better, that ID cards will only ever be voluntary, etc.
Trouble is, Alan Johnson isn't the sharpest tool in the closet, so Labour's problems will continue well into the autumn.
- Jools, London, 24/07/2009 12:53
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After the next election, Labour will be out of power for a generation.
Same as the last time they destroyed the economy.
- Dave Davies, Basingstoke, Hants, 24/07/2009 12:48
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If the result is as predicted here, why try to clean up MPs expenses. The electorate obviously don't mind having sleazy, cheating, MPs representing them, as long as they are Conservatives.
- Mrs V Daniels, Mijas Costa, Spain, 24/07/2009 12:24
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It's interesting that if you foolishly depended on BBC Pravda to get your news, you would be unaware that there was a by-election at all.
- Ricky, Hackney, London, 24/07/2009 11:54
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So when is Cameron going to force some by-elections or is he just going to just duck out!!!
- Melvyn Windebank, Canvey Island, Essex, 24/07/2009 11:40
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"45% voter turn out is brilliant isn't it?"
No such a pathetically low turn-out for a by-election means that the press and the politiciands can justifiably claim that thw new MP did not get elecred by the majority, but instead by a minoroty of the Norwch North electorate
- Keith Price, Luton, England, 24/07/2009 11:28
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Although I have never voted labour in fifty years I have to say the treatment of Dr Gibson, the sitting member, was disgusting. What man would not attempt to help his daughter? Gordon has done nothing about cabinet members and their dodgy expenses,this vote was the public expressing its disgust at gesture politics as opposed to policy. Take note Mr Cammeron, but then I have never voted Tory either.
- Alan Green, Woodford Green, 24/07/2009 10:53
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45% voter turn out is brilliant isn't it? How come this is described as "a low turnout"?
- Prototypical Englishman, Wormwood Scrubs, 24/07/2009 10:42
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The FSA (Financial Services Authority) Mr. Brown's creation was asleep at the wheel and the Norwich by - election is a small bump, before the General Elction CRASH! Brown is honest but people are hurting.
- Andrew, London, 24/07/2009 10:42
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Oh dear Keith, reduced to posting variations on "I know you are but what am I"?
- Kevin T, Beckenham, Kent, 24/07/2009 10:40
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IN THE PUB LAST EVENING G BROWNS NAME WAS MENTIONED..LETS NOT TALK OF THAT BYZANTINE LOGOTHETE....SAID MY MATE. WHATS THAT MEAN JOHN? HE WAS ABOUT TO TELL ME WHEN HE SAID LOOK IT UP . LATER I DID , AND YOU KNOW WHAT...BYZANTINE LOGOTHETE IS G BROWN TO A T....LOOK IT UP.
- Tonygoody, STAVANGER NORWAY, 24/07/2009 10:34
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"it's more about economic incompetence, lying, deceit, arrogance and treating the country like idiots. "
Yes but hey may have forgiven the Conservatives for doing this, and elect their party's candidate
- Keith Price, Luton, England, 24/07/2009 10:21
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Wot No Comments About Brown Today ?
- Sally70, Bedford, 24/07/2009 10:19
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Everything, but EVERYTHING that Gordon touches turns to brown - and in dumpUk there aren't enough lifehoats.
- Ted, London, 24/07/2009 10:19
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The simple fact is that this government has been around too long and people want change. That and the fact that Gordon Brown cannot connect with people.
- Carl, London, 24/07/2009 10:18
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Regardless of result at the polls isn't it Gordy's style to force unelected people (including himself and Mandy) into the position anyway? Disgraceful
- David, soton, 24/07/2009 10:00
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It's no wonder there was a poor turnout. The succesful candidate will have to go though it all again in less than a year, as will the voters. If the ruling party has a comfortable majority there is no point in having a by-election so soon to the next general election - it's just a waste of money.
- Paul, London, 24/07/2009 09:58
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It's only partly to do with expenses - it's more about economic incompetence, lying, deceit, arrogance and treating the country like idiots. If you think today is bad Gordon, just wait for the General Election next year.
- Dave B, Manchester, 24/07/2009 09:48
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