You can’t trust the Tories on the Economy

This Tory-led government has created a broken economy. Osborne has failed his own tests as Chancellor.  After four years the record shows Tories and LibDems can’t be trusted with the economy.

It is only fair to judge the government on its record. After more than four years, we can see how they have failed the country, and failed to deliver their promises.

The Tory-LibDem Cameron-Clegg love affair of 2010 in the rose-garden was based around one shared obsession of balancing the books by 2015. Remember that cast-iron pledge, that a Tory Chancellor would pay down the deficit and balance the books by the end of one parliament? Trust me, George said, I’m a Tory.

We now anticipate that Chancellor Osborne will tell the country today that the deficit is £60bn more than the £37bn he forecast in June 2010. The over-riding aim of the breakneck Tory austerity drive which has slowed economic recovery and punished the squeezed middle in the UK has been missed. It has been missed by a country mile.

Trust me said George. The austerity will be worth it, because I’ll balance the books over one parliament, he promised. It’s a necessary evil, he said. I feel your pain, he said, but it’ll be worth it to balance the books.

His promise was worthless. He and the Tories and LibDems have failed on their primary economic goal.

Trust me, said George. Trust us, said the Tories and the LibDems. Well, anyone who trusted them to run the economy has just been badly let down. You can’t trust the word of the Chancellor on this, or on anything else frankly.

Why has this happened? Well, as Labour and many others told them, if you strangle a fragile economy too early, don’t expect it to thank you by having a burst of balanced growth later on.

Back in 2010, after the mega-shock of the global economic meltdown, the new “Trust Me” Tory-LibDem alliance decided to rein the UK economy in with shock-and-awe austerity. The slow progress out of deep recession of the post-2008 years, showing slight but encouraging signs through late 2009, was immediately lost. The economy stuttered, stalled, and we entered the coalition austerity years.

As a direct result the subsequent gradual recovery has been greatly delayed. But to make it worse, the recovery we have is partial and imbalanced. Having first strangled the economy, having failed to drive down the deficit as promised, having put the burden of the painful austerity measures on the squeezed middle instead of the mega-wealthy, the economic recovery is the wrong type of recovery.

The Tories cheer the drop in unemployment figures. Who wouldn’t? Except when those “new” jobs are in poverty-pay, part-time where people want to work full-time, zero-hours contracts and agency-work when people want the terms and conditions of permanent contracts. Want to know why the in-work benefits bill is going up, under a government which said that the bills would be coming down? It’s because the coalition government failed to understand the basic economics which says if you force people into poverty pay and also tell them that they have to accept declining wages year after year then a) the taxpayer bill goes up to support them and b) the tax-take goes down as those same under-employed and under-paid people pay less in taxes.

Here are the facts: this Tory-led Government is now set to spend £25 billion more on social security than planned in 2010, including £1.4 billion more than it budgeted for on housing benefit for people in work. And because working families on low pay are relying on tax credits to make ends meet the Government is now set to spend £5 billion more than it planned on tax credits over the course of this Parliament.

So, benefits up, borrowing up and deficit not paid down. Tory-LibDem promises broken. I wonder if the Chancellor can see the link between these factors?

So, Britain under this government is becoming a low-wage economy, and also a low productivity economy. The gap between the extremely wealthy and the others in the squeezed middle and working poor is growing. It is a direct result of the policies of Cameron, Clegg and Osborn.

And the economic recovery is structurally imbalanced, with the Chancellor failing to learn from the errors of previous recessions and recoveries. The Tory economy is now characterised by housing price inflation mainly in London, and stagnation elsewhere; the recovery is mainly driven by the sectors of business services, finance and government – focussed unsurprisingly on London and the South East again – rather than other sectors which would spread the benefits across the wider economy and to other parts of the UK.

To add salt to the wounds, while most people continue to suffer bruising austerity, those at the very top seem to have a different set of rules. Osborne fights in Brussels to stop caps on bankers’ bonuses, and gives millionaires and multi-millionaires a windfall tax break. Meanwhile, the government he is part of tells working people to put up with stagnating earnings and rising cost of living.

The biggest coalition lie of all was that “We’re all in it together”.

One final point: when the Chancellor tells us (again!) that he will boost spending on housing, flood defences, and roads in the run-up to the next election, we have good cause to doubt him.

This government has had over four years to boost infrastructure spending and has failed, and these are mainly re-announcements of re-announcements. Most of these spending commitments have been talked about more often than sightings of Elvis. Most of them won’t kick in until well into the next parliament, or even the parliament after that.

This government has shown that it can’t be trusted to deliver its promises, it can’t be trusted to deal with the deficit, and it can’t be trusted on the economy to build a balanced recovery.

Cameron and Clegg and Osborne have failed us. They don’t deserve another chance.