So that’s alright then. The deficit is coming down, unemployment is low and we really shouldn’t be worrying our little heads about the economy because the government has got it pretty well under control.
It was about as plausible as listening to Gordon Brown telling us that he had put an end to boom and bust just before the world economy went through one of its biggest busts ever.
The truth is that many ordinary people in this country are reeling as a result of ten years of misery that has been inflicted on them using the utterly flawed argument that the crash was caused by excessive government generosity. It wasn’t.
As a matter of hard historical fact the crash began as a banking and financial crisis. It took place in the most extreme and least regulated part of the free market, where speculators were allowed to gamble with other people’s money. Northern Rock went bankrupt before there was a government deficit crisis. Lehman Brothers didn’t go bankrupt because the public sector was spending too much money but because it was being inadequately regulated by the public sector.
Instead of properly tackling the excesses of gambling capitalism the Conservatives have repeated endlessly the factual error that it was public sector debt that was responsible for this crisis and it is the public sector that must take the brunt of the pain in solving it. Whilst £400 billion has gone on quantitative easing local government spending in real terms has been slashed to around half its former size in real terms. That means fewer care workers to look after the elderly or infirm and more people blocking hospital beds because there is no one to look after them.
Teachers, doctors, nurses and care workers have all had their pay cut in real terms every year throughout the austerity campaign. Bankers and financiers haven’t paid the same price despite being the direct cause of our major problems. Almost every person in receipt of benefits has experienced serious reductions in their drastically small income and a nasty increase in aggressive treatment by bureaucrats. Meanwhile major international companies have got away with paying less tax than small high street businesses because they use avoidance schemes that could be stopped tomorrow with a punitive estimate rule based on sales in UK.
These kinds of contrasts are obscene. Those who carry no blame for the ten years of austerity must pay the price. Those who directly caused it are back to business as usual with the same horrible risks of yet another crash.
At the top of the boom cycle and after ten years of pain the Chancellor and his spin doctors are telling us to rejoice over the healthy hum of the economy. Real wages are down yet again and haven’t equally the pre-crash levels. Zero hours contracts and false self employment have devastated job security. Savers have seen the value of what they own reduce every year since the crash as ultra-low interest rates fail to properly stimulate investment.
These are not the symptoms of a healthy economy. They are the signs that enough sticking plaster has been put over the problem of an insecure world economy to lurch on for a bit longer. You cannot have a successful global economy without effective global economic management. Only really well organised international collaboration can bring an unstable economic system back to some kind of health. More importantly only really well organised international collaboration can bring an unstable environmental crisis safely under control.
In these circumstances the government’s economic plan is simply inadequate to face up to the challenge. Smugness is not a responsible economic strategy. Lip service is not a responsible way to tackle a huge environmental crisis. Cobbling together a few random ideas like fracking, HS2 and Hinkley Point and calling it an Industrial Strategy is not a responsible way to rebalance the UK economy and get us at the forefront of the next wave of technology. Oh, and I almost forgot to mention, losing customs free access to your biggest market in order to patch up a split in your political party is not a responsible way to secure your country’s future prosperity.
The Conservatives used to pride themselves on their economic competence. They have kept the pride and turned it into acute smugness. Any competence they might once have had has long gone.