Do YOU feel as prosperous as you were before the crisis?

[Image: David Symonds for The Guardian, in February this year.]

[Image: David Symonds for The Guardian, in February this year.]

Britain has returned to prosperity, with the economy finally nudging beyond its pre-crisis peak, according to official figures.

Well, that’s a relief, isn’t it? Next time you’re in the supermarket looking for bargains or mark-downs because you can’t afford the kind of groceries you had in 2008, you can at least console yourself that we’re all doing better than we were back then.

The hundreds of thousands of poor souls who have to scrape by on handouts from food banks will, no doubt, be bolstered by the knowledge that Britain is back on its feet.

And the relatives of those who did not survive Iain Duncan Smith’s brutal purge of benefit claimants can be comforted by the thought that they did not die in vain.


NO! Of course not! Gross domestic product might be up 3.1 per cent on last year but it’s got nothing to do with most of the population! In real terms, you’re £1,600 per year worse-off!

The Conservatives who have been running the economy since 2010 have re-balanced it, just as they said they would – but they lied about the way it would be re-balanced and as a result the money is going to the people who least deserve it; the super-rich and the bankers who caused the crash in the first place.

You can be sure that the mainstream media won’t be telling you that, though.

Even some of the figures they are prepare to use are enough to cast doubt on the whole process. The UK economy is forecast to be the fastest-growing among the G7 developed nations according to the IMF (as reported by the BBC) – but our export growth since 2010 puts us below all but one of the other G7 nations, according to Ed Balls in The Guardian.

And it is exports that should be fuelling the economy, according to JML chairman John Mills in the Huffington Post. He reckons the government needs to invest in manufacturing and achieve competitive exchange rates in order to improve our export ability.

“Since most international trade is in goods and not in services, once the proportion of the economy devoted to producing internationally tradable goods drops below about 15 per cent, it becomes more and more difficult to combine a reasonable rate of growth and full employment with a sustainable balance of payments position,” he writes.

“In the UK, the proportion of GDP coming from manufacturing is now barely above 10 per cent. Hardly surprising then that we have not had a foreign trade surplus balance since 1982 – over thirty years ago – while our share of world trade which was 10.7 per cent in 1950 had fallen by 2012 to no more than 2.6 per cent.”

All of this seems to be good business sense. It also runs contrary to successive governments’ economic policies for the past 35 years, ever since the neoliberal government of Margaret Thatcher took over in 1979.

As this blog has explained, Thatcher and her buddies Nicholas Ridley and Keith Joseph were determined to undermine the confidence then enjoyed by the people who actually worked for a living, because it was harming the ability of the idle rich – shareholders, bosses… bankers – to increase their own undeserved profits; improvements in working-class living standards were holding back their greed.

In order to hammer the workers back into the Stone Age, they deliberately destroyed the UK’s manufacturing and exporting capability and blamed it on the unions.

That is why we have had a foreign trade deficit since 1982. That is why our share of world trade is less than one-third of what it was in 1950 (under a Labour government, notice). That is why unemployment has rocketed, even though the true level goes unrecognised as governments have rigged the figures to suit themselves.

(The current wheeze has the government failing to count as unemployed anyone on Universal Credit, anyone on Workfare/Mandatory Work Activity and anyone who whose benefit has been sanctioned – among many other groups – for example.)

You may wish to argue that the economy is fine – after all, that’s what everybody is saying, including the Office for National Statistics.

Not according to Mr Mills: “The current improvement in our economic performance, based on buttressing consumer confidence by boosting asset values fuelled by yet more borrowing, is all to unlikely to last.”

(He means the housing bubble created by George Osborne’s ‘Help to Buy’ scheme will burst soon, and then the economy will be right up the creek because the whole edifice is based on more borrowing at a time when Osborne has been claiming he is paying down the deficit.)

Ed Balls has got the right idea – at least, on the face of it. In his Guardian article he states: “We are not going to deliver a balanced, investment-led recovery that benefits all working people with the same old Tory economics,” and he’s right.

“Hoping tax cuts at the very top will trickle down, a race to the bottom on wages, Treasury opposition to a proper industrial strategy, and flirting with exit from the European Union cannot be the right prescription for Britain.” Right again – although our contract with Europe must be renegotiated and the Transatlantic Trade and Investment Partnership agreement would be a disaster for the UK if we signed it.

But none of that affects you, does it? It’s all too far away, controlled by people we’ve never met. That’s why Balls focuses on what a Labour government would do for ordinary people: “expanding free childcare, introducing a lower 10p starting rate of tax, raising the minimum wage and ending the exploitative use of zero-hours contracts. We need to create more good jobs and ensure young people have the skills they need to succeed.”

And how do the people respond to these workmanlike proposals?

“You intend to continue the Tories’ destructive ‘austerity’ policies.”

“The economy isn’t fixed but you broke it.”

There was one comment suggesting that all the main parties are the same now, which – it has been suggested – was what Lynton Crosby told David Cameron to spread if he wanted to win the next election.

Very few of the comments under the Guardian piece have anything to do with what Balls actually wrote; they harp on about New Labour’s record (erroneously), they conflate Labour’s vow not to increase borrowing with an imaginary plan to continue Tory austerity policies… in fact they do all they can to discredit him.

Not because his information is wrong but because they have heard rumours about him that have put them off.

It’s as if people don’t want their situation to improve.

Until we can address that problem – which is one of perception – we’ll keep going around in circles while the exploiters laugh.

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  1. Bill Kruse July 25, 2014 at 12:22 pm - Reply

    The main parties are all the same, they all intend to maintain the staus quo in this country. Nothing about unseating the Queen and the other major landowners by taxing the lands they inherited (something for nothing, I’d like to point out), thus forcing them to sell at cheap prices so it can be freed up for housing. Nothing about introducing full reserve banking for the privately-owned high street banks and replacing them with extensions of the central bank, creating money at no interest or low interest. What of significance will change then? Nothing. Forget Labour. Forget politics, in fact. I’ve read the Houses of Parliament are crumbling away. Good, let them and the whole corrupt rotten edifice of British politics go with them.

    • Mike Sivier July 25, 2014 at 12:41 pm - Reply

      Lynton Crosby would just love you for writing all that.

  2. amnesiaclinic July 25, 2014 at 12:40 pm - Reply

    Yes, you are right, Mike the exploiters do laugh as we go round and round in circles debating left and right and debating the minutia of what we think might be how the economy is tackled if Labour do win.
    The problem is that both parties are controlled by the bankers and the 1%. They own the politicians and as you rightly said the wealth is being siphoned off by the 1%.
    And do you think that really is going to change? From what I have seen so far it is just tinkering within the same constraints – in other words austerity is going to continue. This is a worldwide phenomenon and not just in Britain. The elit are supranational and interested in a global government and not interested in nationalism at all.
    But there is a possibility things can change if we all start to participate and really hold them to account. That’s the weakness as they can promise us the moon and then do what they like or just more of the same when they get into office.

    • Mike Sivier July 25, 2014 at 12:43 pm - Reply

      Lynton Crosby must just love YOU for writing that! (The first part, at least…)
      First thing you need to do is recognise that you’ve been brainwashed into believing they’re all the same. They’re really not.
      Second thing you need to do is, yes, convince your local representative of the party of your choice that their policies aren’t worth the paper they’re written on. Good luck with that…

  3. jaynel62 July 25, 2014 at 12:44 pm - Reply

    One Word – NO!!

  4. sdbast July 25, 2014 at 12:49 pm - Reply

    Reblogged this on sdbast.

  5. jaypot2012 July 25, 2014 at 1:58 pm - Reply

    More B/S from the government, statistics, etc. I don’t believe a word that comes out of a tory or lib/dem mouth.
    Labour is going to have to get it’s act together if it’s going to win the election, and they’ve got to do it pretty damn quick!

  6. jaypot2012 July 25, 2014 at 1:58 pm - Reply

    Reblogged this on Jay's Journal and commented:
    And your thoughts on this are?

  7. Tony Dean July 25, 2014 at 2:10 pm - Reply

    Personally it was the income I had between 1970 and 1979 that I have never been able to match since.

  8. jray July 25, 2014 at 2:12 pm - Reply

    Better off? I am long term unemployed and have been through the WP,MWA,Work Experience and a long list of “Courses” that seem to be there just so so Provider (?) can collect a fee or the DWP can check a box.

    The lady I see has 5 children…No1 Has graduated from Uni,has he found a job? No,it actually pays more for him to go on to Post Grad (Loans,grants,ect)

    No2 Has found employment,warehouse work,low pay,long hours,but it pays the bills.

    No3 Became an apprentice(Chef) DWP paid the employer £2000+ for the first 6 Months.his pay was about £90 per week…He is still there,working 50 hours per week for £120 per week(very little work in Wales) lives at home..Why,because another apprentice has started.

    No4 Spent 2 years qualifying as a level 2 Carpenter,£2.85 per hour,he has been taken on by a decent Company £6.31 ph + overtime and they are helping him with his level 3,once completed £9.00 ph

    No5 In school.

    The Mother? working for a Company that has her do 2 hours here and 1.5 hours there at 4-5 locations 7 days a week,travel time and fuel not paid…Tell her that things are getting better!

  9. AM-FM July 25, 2014 at 2:32 pm - Reply

    I think it’s all down to sex, drugs and rock ‘n roll myself.

    And the good thing about it being just an estimate, is that you can just ‘create’ a few more £Bn of GDP when you need it, just before an election for example.

    • Mike Sivier July 25, 2014 at 3:13 pm - Reply

      I think that the sex and drugs haven’t been included yet; they come in September.

  10. che July 25, 2014 at 2:42 pm - Reply

    the worst pay and working conditions I ever had was working for a bank !

  11. A6er July 25, 2014 at 5:08 pm - Reply

    Reblogged this on Britain Isn't Eating.

  12. thelovelywibblywobblyoldlady July 25, 2014 at 5:18 pm - Reply

    I take it the headline is a rhetorical question Mike :-) but the answer is NO. Why? because wages/benefits are frozen or subject to minimal rises whilst everything else goes up, food, transport costs, gas, electric to name but a few. The other day Mark Carney said it would be idiotic to raise the interest rate whilst wages were still so low…

    but (and I’d like to be wrong) I think that he will cave in to pressure from the tories and raise the interest rates because cronies of the tories will in turn be putting pressure on the government to do so in order to enhance their investments

  13. […] Britain has returned to prosperity, with the economy finally nudging beyond its pre-crisis peak, according to official figures. Well, that's a relief, isn't it? Next time you're in the supermarket …  […]

  14. beastrabban July 27, 2014 at 7:53 am - Reply

    Reblogged this on Beastrabban’s Weblog and commented:
    Mike here attacks the Tories claim that we have just come out of the recession. He shows that the small economic gains have all gone to the massively rich, who started the crisis, while the poor are actually £1,600 poorer. He also criticises the assumption that this period of growth will actually last, because it’s built on Osborne’s housing bubble. Long term obstacles to growth also include the decimation of Britain’s industrial base by Thatcher and the Tories, and praises Ed Balls plans to strengthen manufacturing. And finally there’s the important observation that all the criticisms of the proposals by the Labour party to correct these failed Tory policies are attacked in turn by people, who have swallowed Lynton Crosby’s propaganda that they party’s are all the same.

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