The government’s going to have a hard time ‘earning its way out’ of this recession, says Rebecca Benneyworth.

The UK is facing the most serious economic downturn in over 60 years but the government is not facing up to the severity of the circumstances. Alistair Darling’s projections for Britain’s economy are based on a doubling of the global economy in the next 20 years and his hopes that we will be able to take a major share in that growth, but is that a reasonable assumption in itself?

The growth (if indeed the figures are correct) will not be from the mature Western economies, but from the emerging economies. Perhaps it is a reasonable assumption that the UK could participate in that growth sufficiently enough to bring things around, but most voters will not be prepared to wait two decades to see things improve. Maybe Mr Darling was giving us a clear idea that it really could be that long before the good times are back?

Claims that Britain would return to growth within a year and finish 2010 back on the sort of growth we benefited from in the early part of the century are implausible. GDP will shrink by around 3.5% this year - this is widely accepted, although the figures published the day after the Budget seemed to give the lie even to this pessimistic figure. After shrinking by 1.6% in the fourth quarter of 2008 (regarded as an unprecedented quarterly result) the economy fared even worse in quarter one of 2009, suffering a reduction of 1.9%.

It is possible that even a 3.5% reduction in GDP is now overly optimistic. The potential for 1.25% growth in 2010 and 3.5% thereafter with a target rate of 2.75% is frankly doubtful. It is clear that these growth figures are based on the unsustainable growth of the financial services sector, which is all but bankrupt. In which case, where will this growth come from? Which sector would you back to ‘earn our way out of the downturn’? Whichever it is, it will have to earn a great deal to undo the damage and start to turn the super tanker that is the UK economy.

The second claim I found deeply worrying in Mr Darling’s assessment of the economy was that our deficit would halve in the next four years. The UK’s budget deficits are calculated at 10% of GDP annually within four years. In the recession of 1975 - 76 this only reached 8% of GDP, in 1982 it was 5.5% of GDP, and 7% of GDP in the 1990s. In 2009 - 10 it will reach 12.5% of GDP. By 2015 our stock of national debt is projected to reach 80% of GDP. How is that a 'halving' by any standard of measurement? The rate of increase may go down, but that seems to be about it.

So how do we pay this back? We might consider turning to the IMF for a bail out, but this route to solvency will not serve us this time around. First we would need a stable banking sector as one of the primary conditions. Ours is as stable as a three legged stool with a broken leg. The problem is that we would be looking for around $500 billion, and the IMF only has a total of around $300 billion of funds in total.