22 August 2013
David Cameron’s Conservative Party 2010 General Election manifesto offered voters this prospect :
“We want to see an economy where not just our standard of living, but everyone’s quality of life, rises steadily and sustainably.”
Three years hence, Labour’s analysis of the performance of the Tory-led Coalition has found that the standard of living has slumped so badly that by 2015, workers in the UK will find that there income then is over £1,500 lower than it was in 2010, taking inflation into account.
In all, workers will have lost over £6,600 in total by the time of the 2015 election.
This has been the outcome of the “No pain, no gain” austerity inflicted on the country by George Osborne , as if there was no alternative.
What economic and political history has taught us is that, in bleak economic times, governments invest public spending to create jobs to get the economy moving again.
This has the beneficial effect of raising demand in the economy not just in a one-off direct transaction but as a producer of work for the subsidiary industries in the supply chain that will support jobs as well.
The Osborne way has been to go against the proven track record of this past best practice and attempt to cut his way to economic success.
Instead, grim failure has been the result , causing Jonathan Portes, the Director of the National Institute of Economic and Social Research to talk of “the slowest post-recession recovery in output in the past one hundred years"
The Tories are, for the moment, buoyant about the condition of the economy with not a discordant voice to be heard.
If these low growth rates were to continue, the Tories would attempt to spin the figures to manage public expectations downwards so that these lower growth rates would be portrayed as something of a triumph for the Chancellor.
However, as the noted economist David Blanchflower observed :
“The level of Gross Domestic Product (GDP) is still 3.3 per cent below its starting level at the beginning of 2008, which means that just over half of the lost output has been restored.
“The Great Depression saw output fully restored in four years.”
Robert Skidelsky, emeritus professor of political economy at Warwick University, adds to this analysis by pointing out :
“Even according to the brightest forecasts, we still need another two years to make up the lost ground.
"If we factor in population growth , GDP per capita is not expected to reach its pre-recession peak until 2018.
“We are only halfway through a lost decade. “
Communities in the East End ward that I represent display communal resilience in Tory economic times and they will expect little or nothing from the forecast 1.2 per cent annual growth rate in the economy.
The growth is mainly to come from increased housing prices supported by the Chancellor’s Help-to-Buy scheme boost for the mortagages and from consumer spending driven by consumers depleting their savings.
However, as wages are falling in real terms and not keeping pace with inflation , it remains to be seen for how long the recent upturn in the economy will continue and improve.
Job Seekers Allowance Claimant Count numbers and rates for individual communities in the East End ward
Pitkerro 327 9.3 per cent
Douglas 273 8.2 per cent
Craigiebank 127 5.4 per cent
Lesley Brennan - The Economy : Workers set to lose £6,600 by the time of the next election http://t.co/54t9UbclNw— Dundee Labour (@dundeelabour) August 22, 2013