Tory economic policy has cost every household at least £4,000 – and aims to take more

Bottom of the class: George Osborne based his 'Long-Term Economic Plan' on a spreadsheet error by American economists. [Image: Gaianeconomics]

Bottom of the class: George Osborne based his ‘Long-Term Economic Plan’ on a spreadsheet error by American economists. [Image: Gaianeconomics]

If you’re thinking, “That headline isn’t news”, you’re right.

It is, however, the main point troubling Professor Simon Wren-Lewis in his latest Mainly Macro blog article. He states that Tory chancellor George Osborne started out in a similar position and with a relatively similar policy to Labour’s Gordon Brown, but caused huge damage to household finances, whereas Brown did not.

“The answer, of course, is that the … contexts were different,” writes the learned professor. “Osborne’s austerity happened when the economy was just starting a recovery from a deep recession, and interest rates were at their then Zero Lower Bound (ZLB) of 0.5%… When interest rates are at the ZLB, monetary policy cannot counteract the negative impact of fiscal austerity on output.”

In other words, with austerity shrinking the economy, nothing else Osborne did would have stopped your wages from shrinking too. It is entirely possible that Osborne was perfectly aware of this.

This is how George Osborne probably looked after the fire in his pants caused by his incessant lying about the EU’s £1.7bn bill burned away the rest of his suit. Note that his briefcase is still empty of policies and all he has to offer us is the carrot of false promises [Image: Kaya Mar].

George Osborne: His briefcase is still empty of policies and all he has to offer us is the carrot of false promises [Image: Kaya Mar].

Yet he is planning an even bigger austerity squeeze on your incomes if the Conservatives form a government after this year’s election.

Professor Wren-Lewis dismisses the possibility that Osborne does not understand what he has been doing: “A much more plausible explanation for his actions were that the macroeconomic risks were understood, but were put to one side for political and ideological reasons.

“First the possibility of hitting Labour with a populist concern about the deficit was too great a temptation to resist for a Chancellor for whom political tactics are everything. Second, austerity was a means of implementing an unpopular policy of reducing the size of the state by the back door.”

He adds: “Now you may cynically say that in a contest between economics and politics/ideology, politicians will always choose the latter. However much that is true or false, when that choice costs each household at least £4,000, it would be very strange if that politician survived the judgement of the electorate.”

Perhaps so – but he and his party are banking on the electorate being too ignorant of the facts to realise this. That’s why I put it in the headline.

Campaigning in the centre of a small Mid Wales town yesterday, This Writer asked one group of young people (in their twenties or thereabouts), who quite clearly had limited means, which way they were going to vote. They ignored the question and walked on for several paces, then one turned around and, raising his fist to the air, yelled, “Conservative all the way!”

George Osborne is relying on people like this for his party’s survival.

We have to foil him by educating them.

It is a task that won’t end after the election; in fact, it is a task that may not end in our lifetimes.

But it is the only way to protect ourselves from continual exploitation by an entitled class of layabouts who expect us to do all the work while they have all the privileges handed to them on a plate.

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9 thoughts on “Tory economic policy has cost every household at least £4,000 – and aims to take more

  1. amnesiaclinic

    A very glossy professional conservative leaflet has just popped through my letter box. It is for the county council elections and smacks of big money. I am campaigning in another ward as an independent and have a single, black-and -white sheet as does the independent candidate in this ward.
    Unless people have the education to be able to ask simple and fundamental questions the quick reaction is to be impressed and vote conservative for all 3 elections and be done with it.
    Otherwise sadly,the poor have been disenfranchised by the new system or are completely out of the loop because of being uninvolved because of all the other pressures put on them by this government.
    Yes, it might be long-term. At an open forum last night organised by the local churches there was a lot of good opposition to the tory. It is a safe seat so he was a bit miffed but soon recovered his normal hail-and-well-met, all part of the same boys club demeanour.
    We do, do have to change the club!

    1. Mike Sivier Post author

      Thanks – although I can’t take any credit for that. It’s the sound basis provided by Mainly Macro‘s information that swings it, I think.

  2. Jim Round

    Labour is wrong to have an obsession with cutting the deficit, it needs to come out in favour of real investment, not “our cuts will be less than Tory cuts”
    How about no cuts?
    They seem scared stiff of coming out saying “we will borrow whilst rates are low to benefit this country”
    How much more cuts can departments not exempt like the Home Office, DEFRA, borders agency and local government take?
    This country needs infrastructure investment badly, quality jobs and apprenticeships can be created of the back of it, I commented about it previously, I’m not convinced by the Infrastructure body that is meant to be set up.
    Genuine question for you Mike, if I remember correctly, Labour promised some sort of reform of the House of Lords in it’s 1997 manifesto, what happened about that?
    They missed a trick there, should’ve abolished it.

    1. Mike Sivier Post author

      Labour is the only party that has stated it will make real investments in building the economy.
      Rates are low at the moment, and the Tories have been borrowing like there’s no tomorrow; Labour is offering something different.
      You are aware that Labour’s cuts total £7 billion – max – in four-year spending totalling £1.2 trillion?
      Labour intends to reform the House of Lords in the next Parliament. I’d have to look up the reason it didn’t happen between 1997 and 2010.

  3. Jim Round

    Labour’s cuts shouldn’t total anything, there is little, if anything left to cut, and as I said, I am not convinced on the infrastructure spending, if they fulfil their pledge, then fair enough, the point on the House of Lords proves my point.
    I’ve said it before, Labour are scared of the right-wing press (wrongly) they think it will lose them votes.

    1. Mike Sivier Post author

      The Tories think there is plenty left to cut. The UK budget totals more than £300 billion each year and removing desperately-needed public services from the poor won’t bother them at all if it means the rich can have a tax cut. Once those services are gone, it will be extremely expensive to bring them back, so the tax cut stays and the poor suffer. It’s a win-win for them.
      Labour’s approach will not only ensure the survival of those services, but it will save the UK’s dying industries as well.
      I tend to agree about Labour’s attitude to the right-wing press.

      1. Jim Round

        It was expensive to rebuild the country after WW2, but they had a go.
        Little comfort to the elderly, disabled and families who have lost meals on wheels, sure start and day centres etc…
        Never understood why Labour are so scared of the right-wing press, do you think the Tories are scared of The Mirror and The Guardian?

      2. Mike Sivier Post author

        The right-wing press managed to convince most of the UK that Ed Miliband was a weirdo, until they had a chance to see him on television and judge for themselves. His approval rating has rocketed by 20 percentage points within a month as a result.
        That should demonstrate the stranglehold the Tory media has over public opinion.

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