Saturday, 26 July 2014

Economic recovery 'milestone' exists only on paper


Rory MacKinnon in the Morning Star

THE coalition’s promised recovery exists only on George Osborne’s spreadsheets, the chancellor’s critics warned yesterday amid Con-Dem crowing.

Front-bench Tories proclaimed a “major milestone” as they touted figures suggesting Britain’s economy had finally escaped a six-year economic crisis.

Office for National Statistics (ONS) data showed that gross domestic product (GDP) grew by 0.8 per cent in the three months to May, taking the size of the economy 0.2 per cent above the level of 2008 when the crisis began.

Prime Minister David Cameron was quick to label the figures a vindication of the austerity agenda.

“Our long-term economic plan is working and this is a major milestone,” he said.

Mr Osborne insisted their cuts offered “economic security and a brighter future for all.”

But critics on the left dismissed the Tories’ triumph, citing massive declines in full-time jobs and the real value wages.

The absolute GDP figure seized on by ministers stands in stark contrast to GDP per capita — a measure of the actual population’s wealth that remains 6 per cent lower than in 2008, according to ONS figures released earlier this month.

Analyst Andrew Fisher of the Labour Economic Advisory Panel (Leap) said the recovery only existed “in corporate balance sheets and Osborne’s spreadsheets.”

“Even on its own terms, this is an unsustainable recovery, based on increasing household debt and rising property prices,” he said.

“Without addressing the deep structural weaknesses in the UK economy we are simply storing up more problems for the future.”

General union Unite’s general secretary Len McCluskey said it was clear that working people were doing the heavy lifting.

“Quite simply, as our population grows more people are working but they are working for lower wages with zero-hours, insecure jobs at epidemic level and an historic collapse in living standards not seen since Victoria was on the throne,” he blasted.

“At the moment we have a wage siege combined with an investment freeze.

“Basically, working people’s graft is not being rewarded in their wage packets but banked by businesses which are hoarding millions.”

GMB union’s general secretary Paul Kenny agreed, noting ONS figures that showed the value of average earnings had declined 13.8 per cent since 2008.
 
“So the size of the cake is back to pre-recession levels — but the slice per person is smaller,” he said

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