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Why doesn’t Labour take on the Tories over the economy?

Balls and OsborneIt is bizarre that Osborne continues to preen himself that the economy is such a strong card for the Tories at the election when in fact every aspect of the UK’s economic performance is looking bad and getting worse. Yesterday it was reported that the growth rate in the final quarter of 2014 was down to 0.5%, and unmistakeable evidence that Osborne’s ‘recovery’ is fading out. In the quarter before then growth was expected to be 0.9%, but turned out to be 0.7%; in this latest quarter it was expected to be 0.7%, but in the event fell back to 0.5%.

This is really bad news for Osborne since the trajectory is manifestly downwards and UK growth will be lucky to reach 1-1.5% next year. Yet Osborne has the gall to claim that the growth for 2014 was the strongest since 2007, as though it wasn’t his own austerity policies that have produced stagnation for most of that time. But Labour is letting him get away with it.

Just what does Osborne think is going right for the UK economy?

  • GDP per capita disposable incomes are still 5% below their pre-crash level, and may not get back to that level for another decade, if then.
  • Productivity, which is crucial if wage increases are to be achieved, is resolutely stuck at the bottom of the G7 league table apart from Italy which is in a category by itself.
  • Business investment, which is the real driver of growth, has only just after 7 years recovered its pre-crash level, but shows no sign of believing that Osborne’s ‘recovery’ will be durable and hence are not investing the £500 billion cash stockpile they’re sitting on.
  • The balance of payments is a disaster area, with imports of goods exceeding exports by an unprecedented £110bn this year.
  • Unemployment is still very high at 2 million, and overwhelmingly the jobs created are low-paid and insecure, and 11 out of 12 of them are confined to the South-east.
  • Household debt, already cripplingly high at nearly £2.4 trillions, is still rising.

So what’s to praise about the UK economy which Osborne has presided over for the last 5 years?

Why isn’t the Labour party going for the jugular over this? Even the growth we’ve seen over the last 2 years is not due to Osborne at all, but to (i) the £375bn of quantitative easing thrown at the economy by successive governments, (ii) interest rates kept on the floor at 0.5% for nearly 6 years, (iii) penalty payments made to consumers by the banks including £23bn over falsely charged PPI insurance, and (iv) an increase in the population since 2008 of 2.5 million which would generate growth irrespective of government policy.

Why isn’t Labour pointing all this out and going hell for leather against the Tories for the worst economic record since the war 70 years ago?

2 Comments

  1. Michael

    they don’t go for the jugular because Labour is neo-liberal and walked into the lobbies to support the Tories on the austerity issue.

    What’s the problem? I know Kuhn argued that paradigms are resistant to facts, and Labour’s endorsement of austerity is a classic paradigm, but its time to move on,

    Labour has committed to the austerity paradigm. Opposition has to come from outside the party. Please lets MOVE ON.

    Trevor Fisher.

  2. Woodsy says:

    Both the Tories and Labour are owned by the same puppet masters

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