It is astonishing that the Tories have opted to fight the coming election on their economic record (maybe because fighting on any other issue would be even worse?) – and equally astonishing that Labour has made such a poor fist of retaliation. The simple truth is, there is nothing at all about the Tory economic record since 2010 to be proud of:
- Wages will not recover their pre-crash level for a decade (if then?)
- Productivity continues in the doldrums
- Business investment has never recovered (because the FTSE-100 companies, the real money men, have no confidence in the Osborne ‘recovery’)
- Household debt is rising dangerously
- And to cap it all the deficit (the reduction of which is supposed to justify the austerity and impoverishment of the last 6 years) is now starting to rise again at about £100bn, not fall.
What is there to write home about a record like that?
Osborne would of course draw attention to his two prize exhibits – growth and jobs. But they don’t add up either. Growth is already fading – witness the downgrading of the growth forecast for 2014-5 from 3% to 2.6% (which may not sound much, but represents a fall of £6bn), and if the expected growth forecast of 0.5% for the 4th quarter turns out to be correct, the growth figure for 2015-6 may well slide to as low as 1.5-2%, largely because there is a deficiency of demand to sustain it. On the jobs issue, the record is no better. We already knew that the vast majority of jobs created since 2010 were insecure, low-pay jobs or self-employment on a pittance income. In addition the latest report yesterday has now found that 11 out of 12 of these jobs were confined to the south-east , aggravating further the inequality which is tearing the country apart.
There is one other aspect about the current state of the economy which has not received the attention it deserves. the UK current account (that is our financial and trading account with the rest of the world) is now displaying the biggest deficit ever at around £90bn. The current account deficit – the measure of how far a country is unable to pay its way in the world – shows how far Britain has now been reduced to flogging off its assets or incurring debts in order to finance spending. Osborne makes a huge song and dance about sound financing, but having to sell off some of Britain’s biggest companies or properties or having to pay out huge sums in Treasury bonds to cover our consumption debts is the primrose path to hell.
When is Labour going to point all this out and make the dire state of the economy a prime electoral asset for the Left, not the Tories?
Fine! Just declare that Debts are cancelled, and get back to business as usual, like Iceland did, as tho’ nothing had happened. As if!
Michael is quite right as usual. However, Miliband’s unambiguous, and strangely unremarked, pledge in recent speeches to break up the big banks and establish a BIB and regional banks is surely a significant step.