False Economy

According to the Chancellor, George Osborne, Britons can "walk tall" because our economy is on the mend. More reliable figures published by OECD (Organisation for Economic Cooperation and Development) tell a different story. Productivity was higher under Labour, and the UK performed better than the OECD average, but since the coalition embarked on their austerity program our relative performance has declined. Far from being a world leader, we have fallen to the middle of the pack.

The chancellor’s attempts to control the deficit have failed because austerity reduced national output, reduced government tax revenues and ultimately made the position worse. Public organisations and private companies have cut staffing, offered people early retirement, or moved them to less productive, lower paid jobs. People have become self-employed, but failed to achieve the income that they hoped.

Over the last five years the Lib Dem / Tory coalition has imposed appalling cuts on poorer people living in northern cities, while rich living people in the south of England have largely escaped. Government policies have increased the gap between rich and poor. The Tory / Lib Dem coalition has reduced tax rates for millionaires, while simultaneously freezing wages and cutting benefits to people working for little pay. Housing shortages and house price inflation are trapping people in overcrowded rented accommodation, unable to save for a deposit because of inflated rents.

Personal debt has increased under the Tories, and many of these debts will never be repaid. Meanwhile tax evasion by rich companies and individuals is conducted on a massive scale. There have been few successful prosecutions, and people connected with tax evasion have been appointed to government posts. The gap between imports and exports has widened to 6% of gross domestic product, the biggest trade gap ever recorded since records began.

Last updated 4 April 2015 at 22:57. Back to the top