Sunday, 23 November 2014

The Tories cannot be trusted with the economy

Isn`t the Prime Minister`s warning of "red lights" in the economy simply a case of buck-passing? Blaming Ebola and events in Ukraine and the Middle East is a sure sign of Tory panic, with the election looming. With the chancellor claiming to have halved the recent EU surcharge of £1.7bn when everyone knows he simply factored in Britain`s rebate, the question has to be again asked: why do people trust the Tories more on the economy than Labour? 
Opinion polls reveal this to be the case, but that must tell us more about the inadequacy of the Labour propaganda machine rather than about Tory economic success. What has the Tory-dominated coalition done in the last five years to suggest that a Tory government would manage the UK`s economy in a way  that would be remotely effective or competent?
       Of course, the Tories` well-oiled propaganda devices did an excellent job in 2010, when they blamed the Labour government for the economic crisis, and stressed the subsequent need for deficit reduction and the imposition of austerity, and it seems the opinion polls reflect its effectiveness. However, some simple  facts suggest that the Tories` propaganda works more smoothly than their economic policies.
      Remember how the deficit had to be removed immediately? Living beyond one`s means was wrong, and failure to act would mean lumbering the next generation with massive debt. The country fell for it. There were no other arguments or alternatives; Labour was in limbo without a leader, and supporters of a Keynsian solution, blaming bankers and the recession, and proposing government spending to speed up the economic recovery, had little chance. Facts and evidence have rarely played significant roles in Tory narratives, with Lib Dems complicit in everything, as long as they could claim a share in government, but the fact is that the Tories were spinning the nation a yarn. Reducing the deficit was neither as essential nor as urgent as they claimed, especially as quantitative easing would soon re-capitalise the banks to the tune of £375bn.and kickstart the economy. It did give them, though, the excuse they wanted to make savage cuts in government spending, which meant at least 350 thousand job losses in the public sector, and huge reductions in benefits to the less fortunate; their real aim was a low wage economy for the people and a low tax regime for corporations and the rich. They wanted to shrink the state back to levels last seen in the previous century, and their stated aim now is to shrink it further, back to levels last experienced in 1948. With their "economic wisdom", the economy flatlined  and still the deficit  did not disappear! Back in 2010, Osborne predicted the effect of all the cuts would be to reduce the deficit to £40bn by the end of this year, but it is likely to be near £100bn.So much for Tory expertise!
         What about their point of it not being fair to lumber future generations with debt? Strange how this didn`t figure at all in their thinking when they tripled the fees university students would have to pay! The argument was, of course, that with their university qualifications, they would earn large salaries, and easily pay off their debts. But in their low wage economy, with its reduced social mobility, many graduates would fail to earn enough even to start paying off debts. The so-called Tory economic experts did not expect that either!

      Notwithstanding, Labour gets the blame because of all the borrowing its Blair and Brown governments had done. But when the figures are examined, which party deserves the criticism? In the last five years, the coalition has borrowed £157.5bn, with billions more on the cards, compared to the £142.7bn borrowed by Labour in its thirteen years in government; a much vaunted long-term economic plan which fails to balance the books and leads to exponential borrowing, needs to be seen for what it is, a complete failure!
      Reducing the tax  paid by the rich when they`re meant to be lowering the deficit? Exactly! Sacking workers ar HMRC when they`re meant to be ending tax avoidance and closing the tax gap of £40bn plus? Having representatives from the "Big Four" accounting firms on Treasury tax committees so they can sell their avoidance scams to companies like Greene King? Selling off prized assets like Royal Mail and sections of the NHS at reduced prices, ignoring state-owned successes like the East Coast line, giving £85bn in grants and subsidies to  private corporations? The list goes on. So much for Tory economic sagacity!
     And still more needs consideration! Is the economy really safe in the hands of Cameron and Osborne? Wonder what Cameron`s Oxford tutor thought when his ex-student suggested everyone should pay off their credit card bills to boost the economy? Did history graduate,Osborne, expect the economy to get the kick start it needed back in January 2011 when he increased VAT to 20%, thereby reducing expenditure and cutting the demand for goods? Not knowing what 8 times 7 is, he can hardly be expected to understand that if you drive record numbers of workers into low pay employment, income tax receipts will decrease. And still, we are told, because of Osborne`s shrewd handling, the economy has recovered. Really? National income is higher now than it was in the first quarter of 2008, but population has grown by 3.5m, so in actual fact, income per capita is down 3.4%, and real wages for most are down 10%. CEOs of the FTSE 100 companies earn 143 times that of their average employees! Oh but unemployment is down to 6%, they will say. But, we all should say, take zero hours contracts, record 15% self-employment, many out of necessity or desperation, plus all the part-time work, and they do not add up to an economic recovery.
     As Cambridge University economics lecturer, Ha-Joon Chang, recently wrote, the country is experiencing a "bogus recovery, largely based on government-fuelled asset bubbles in real estate and finance, with stagnant productivity and falling wages". And the electorate is supposed to put their trust in them to manage the economy? I don`t think so! Now they are promising £7.5bn tax cuts, without actually knowing from where the money will come. The Institute for Fiscal Studies predicts spending cuts of another £50bn under a Tory government.
    It is abundantly clear that one of Labour`s most important of the many tasks it has to perform in the coming months is to ensure the voters know the facts.The myth that the Tories are able economists, and that the UK`s economy is safe in their hands, is one which needs serious de-bunking. Voting for an over-cautious and reticent Labour party may not always appear an attractive option, but the alternatives are much, much worse.


  1. "Facts and evidence have rarely played significant roles in Tory narratives, with Lib Dems complicit" and if only we had a truly Democratic national broadcaster that asked the questions, instead of towing the line ..

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  3. tiny comment - Could you turn off the bold on the text - would be much easier to read.

    good blog which goes to the heart of Tory spin on their financial failure, which happens every time they get into power.