Letter to Independent on OECD

Your editorial on the healthcheck given to the British economy by the Organisation for Economic Cooperation and Development (OECD) was a trifle selective and optimistic.(Independent,25/02/15) Should Britain really be feeling "pretty smug about economic life", when there are so many people working on zero hour contracts, when so many companies are failing to pay the minimum wage, let alone a living wage, and when pay is so low for so many an extra £900m had to be found recently for the extra benefits needed to enable them to survive. The "collapse in inflation" has indeed led to increased spending power, thereby helping to sustain some growth in the economy, but back in 2010, didn`t the government insist wage freezes were the answer? The same government described tax avoidance as "morally repugnant", but proceeded to cut staffing at HMRC by 20%!

     You recommend a "more imaginative approach to paying" for infrastructure, but ignore the possibility of government borrowing at what are in effect today, zero real interest rates, to pay for the huge amount of houses now needed, so that supply can catch up with the increased demand brought about the "Help to Buy" scheme.

     Even more surprising is your failure to mention the OECD`s warning about rising inequality, and the damaging effect it has on economic growth. Angel Gurria, who presented the report, actually said that had inequality not increased since the time of Thatcher`s government, the economy could be as much as 9% bigger today. Osborne, of course, is keen to view the report as praise for his "long-term economic plan", but that began with legislation to cut taxes paid by the rich;  it does not need an expert economist to realise the effect that would have on inequality!