Today, our Salisbury MP John Glen, used valuable parliamentary time to deliver a planted question to puff up David Cameron during PMQs. He did this by cherry picking data to invent a fictional alternative universe in which “we are on a clear path for improving living standards for all”. So here is an attempt to look at the broader picture:
- Real earnings fell by 1.6% over the past year. That continues the longest drop, of seven consecutive years, since records began in Victorian times.
- The poorest suffer the highest inflation and so have been the worst affected
- In April 2014 the bottom 10% of full-time employees earned less than £288 per week.
- 236,000 jobs – 0.9% of employee jobs – were paid less than the national minimum wage in April 2014.
- Business investment as a share of national income and productivity is still declining – there has been no re-balancing of the economy
- The majority of the new jobs are not permanent.
- The number of people in enforced part-time work has doubled to 1.3 million.
- There has been an explosion in artificial self-employment.
- David Cameron’s PMQs reply included a comment on exclusivity in zero hours contracts but there was clearly no intention to restrict the explosion in the number or impact of zero hours contracts.
- Our debt fueled housing market is overvalued and running out of steam and only benefited better off house buyers and buy for rent landlords.
- After four years in office, the budget deficit and national debt are growing, in fact the structural deficit is now the largest in the EU – this is a core failure of Osborne’s economic strategy
- Cuts in real pay and growing low-wage employment have meant lower tax receipts and greater demand for benefits hence the rising deficit. Almost all the pain of benefit cuts for the most vulnerable has come to nothing, causing a lot of hardship for little gain as far as cutting the deficit is concerned.
- David Cameron’s “red lights are flashing” is clearly an attempt to preemptively blame the world economy for the certainty that his government will fail to meet its fiscal targets for 2014-15
- Finally, the financial crisis was not caused by the cost of the welfare state or by disabled people, or by EU benefits tourism, or by immigrants or by health tourism or Polish plumbers. The crisis wasn’t even caused by the Labour party. The crisis was caused by banks mainly in the US but also the UK who sold mortgages to people who could not afford them. They then repackaged the dodgy mortgages, disguised them, and sold them onto other banks throughout the world. They did this on an industrial scale. This was dishonest and motivated by the ‘greed is good’ ethos. When they were found out the banks started to collapse – Lehman Brothers in the US and Northern Rock here in UK. To prevent a whole scale financial disaster the tax payer had to fork out billions of pounds to save the rest of the banks.
- It is deplorable that the Tories will go to any length to blame anyone other than the banks for the financial crisis but it is shameful that the main thrust of their rhetoric and spin has been to try and shift the blame and the consequences on to those least able to defend themselves.
“Austerity means punishing the poor for the mistakes and greed of the rich”
Annual Survey of Hours and Earnings, 2014 Provisional Results (Office for National Statistics): http://www.ons.gov.uk/ons/rel/ashe/annual-survey-of-hours-and-earnings/2014-provisional-results/stb-ashe-statistical-bulletin-2014.html
Poor lose, and rich gain from direct tax and benefit changes since May 2010 – without cutting the deficit: (London School of Economics 16th Nov 2014) http://www.lse.ac.uk/newsAndMedia/news/archives/2014/11/Poorlose_richgain.aspx
Working for Poverty: The scale of the problem of low pay and working poverty in the UK (The interim report from the Living Wage Commission): http://livingwagecommission.org.uk/wp-content/uploads/2014/02/Living-Wage-Commission-Report-v2_f-1.pdf
What is happening to spending on social security? (Institute for Fiscal Studies, Nov 2014): http://www.ifs.org.uk/publications/7447
Austerity has clearly failed. So why don’t they ditch it? Falling incomes are fuelling the deficit and costing votes. But Cameron is looking after other interests. (Guardian 19th Nov 20914): http://www.theguardian.com/commentisfree/2014/nov/19/austerity-failed-incomes-deficit-votes-cameron?CMP=twt_gu
Five reasons to sell sterling (Enonomist Nov 2014): http://www.economist.com/blogs/buttonwood/2014/11/currencies