Vox Political has been saying this for years. Now that grand master of pointing out the facts to politicians who just won’t see them – Michael Meacher – has written to the press with the same message.
Vindicated at last!
Here’s the esteemed Mr Meacher’s letter to The Guardian:
The Tories have enjoyed attacking Ed Miliband over his failure to mention the deficit in his conference speech (Report, 25 September), but more importantly they fail to mention what is happening to the deficit on their watch. The whole point of Osborne’s austerity was supposedly to reduce the budget deficit. But the data shows it’s actually rising. Last month he had to borrow £11.6bn, £700m more than a year ago, and, despite being forecast to borrow 12% less this year, he’s so far had to borrow 6% more.
When the bankers’ crash erupted in 2008-09, the deficit peaked at £159bn and Alistair Darling stimulated the economy with two expansionary budgets. The deficit fell £38bn in two years. Then Osborne’s austerity kicked in and the rate of deficit reduction halved in the next two years to £99bn last year. This year it seems likely that the deficit will increase to around £105bn. Why? Because if Osborne shrinks the economy – and average wages are already 9% down in real terms since the crash, and still falling – then tax receipts will shrink as well, and if they shrink faster than government expenditure is cut, the deficit will rise, which is exactly what is now happening.
This torpedoes several government claims:
That austerity is working; it isn’t, it’s proving counterproductive.
That the drop in unemployment is feeding growth and government revenues; it isn’t, the OBR forecast that tax receipts would rise 6.5% this year, but they’ve dropped by 0.8%.
And that the government is on track with its (fantasied) “long-term economic plan”. It isn’t, when the National Institute of Economic and Social Research estimates that growth is already starting to slow (with third-quarter growth down to 0.6%), manufacturing orders have nosedived, the trade gap is widening to an all-time record, business investment is still flat, and public finances – the heart of the Osborne experiment on the British economy – are now badly deteriorating.
Michael Meacher MP
Labour, Oldham West and Royton
Follow me on Twitter: @MidWalesMike
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