Politicians in government, of all political persuasions, have long lived by the following rules:
- Whenever there is good news, claim the credit for it;
- Whenever there is bad news, blame someone else!
Chancellors of the Exchequer are particularly prone to this about the state of the economy.
Today, George Osborne tried to pull off this same old trick yet again. Just 6 weeks ago, at the time of his autumn statement, the Office for Budget Responsibility found £27bn down the back of the sofa. Osborne was upbeat, claiming the credit. He announced the “cancellation” of cuts to tax credits (but still introduced by stealth through cuts to universal credit). Now it’s all doom and gloom again. And, of course, it’s now everybody else’s fault:
- the oil price (previously cited as good news)
- the Chinese
- Middle East tensions
… and so on.
So, let’s just remind ourselves of a few facts:
- Osborne’s false comparison with Greece in 2010 of Britain’s debt killed off a nascent recovery inherited from Labour
- His target to clear the deficit by the 2015 election failed spectacularly
- This has been the slowest economic recovery ever
- Household average incomes are still below 2008 levels
- The UK has a record balance of payments deficit
- Our economy is wildly unbalanced towards financial services (1% of global population, 2½% of global GDP, 37% of global financial transactions)
- No serious attempt to rebalance the economy with over half of Tory Party donation cash coming from the City.
(Sources: IFS, Daily Telegraph, Economics Help.org, The Guardian, my blog post The City, Paragon or Parasite)
All this makes Britain uniquely vulnerable to the next economic turbulence. The Financial Times isn’t fooled. It’s another of George’s political, rather than economic, statements. It’s used as yet another reason for continuing debt reduction as number one priority, with the burden falling disproportionately on the poor. It perpetrates the myth that the government is sticking to a “long-term plan”.
Is there any sane person left in the country who believes this? Come off it, George! Pull the other one!
