Spring Budget: our strong, yet vulnerable economy

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The words “strong economy” seem pivotal to every sentence that is uttered by a Conservative party representative, and the phrase appears at every Prime Minister’s Questions session: yet Chancellor of the Exchequer, George Osborne has in recent weeks gone out of his way to assert how vulnerable we are economically in wake of a “cocktail of threats” and that further cuts will be required to steer our course.

This highlights perfectly the contempt the Tories have for the people of Britain, as they transfer public assets and wealth into private ownership – they seem to have even stopped caring about pursuing their agenda discreetly.

The best way to grow an economy, and even reduce a deficit, has never been by cutting, but by investment: you can’t cut your way to prosperity. Osborne’s tendency to act in the interests of the short-term have been damaging, as proved in the recent floods in the north of England, who suffered as an effect of the cuts to flood defences: prevention is almost always less expensive than treatment.

We have a strong economy, yet a need for further austerity – oxymoronic and highly implausible. Osborne must decide on his story, he can’t idle between the two. His cruel, fetish-like obsession with austerity to strengthen the position of the elite is ridiculously transparent to anyone with half a brain.

Do we really have a strong economy?

Public sector net debt excluding public sector banks. Illustration: ONS
Public sector net debt excluding public sector banks. Illustration: ONS

In short? No. The deficit has risen to over 80% of GDP (a swell of 16% from 2014 to 2015), that same deficit that the Conservatives claimed was so dangerous, and the antithesis of a strong economy, has actually increased under their rule.

Osborne claims to have been fixing the roof whilst the sun was shining, but he has achieved almost nothing of what he promised in 2010. Yes, there are always outside threats, but he cannot deflect the blame for the vulnerable situation we find ourselves in economically – he has helped create it. A healthy economy has an inflation rate of around 2%, whilst inflation has wavered just above 0%. Under Tory rule, we’ve seen the biggest fall in living standards since WWII – wages have dragged way behind inflation, meaning most have suffered effective pay cuts.

The Tories have maintained the same laissez-faire landscape that was blamed for how hard the financial crisis of 2008 hit and the enquiry into banking culture that aimed to abate this has been scrapped – should another financial crisis hit (which some would argue is a matter of ‘when’ rather than ‘if’) many in this country, already struggling to get by, would not stand a chance and a majority of the country would be at breaking point: another great depression will surely ensue. 

The economy and jobs market is fueled not by big businesses and bankers as the Tories might like to suggest, but by demand. This demand comes from those on the ground, ordinary people like me and you. With less expendable income in most people’s pockets, there is less demand for services and products – hence less expansion of jobs, and a stuttering economy. Give more expendable income to the people, they will spend it (giving the economy a boost), give it to big corporations, hedge funds managers and the already wealthy and they will hide it in tax havens (removing it from the economy) – a penny to those who can guess which way Osborne’s decisions have tipped this?

Expect the poor and vulnerable to bear the brunt of planned cuts announced in the upcoming Spring budget, whilst further tax breaks benefit the super-rich. While we all suffer apparently unavoidable austerity, Britain’s richest 1,000 families have however doubled their wealth in the last 5 years – I hasten to suggest that we are not “all in this together”.

Austerity is a con. It is not an attempt to rescue our once great nation, rather a rebalancing of wealth and public assets to the already wealthy under the façade of the need for austerity to aid stability – classic smoke and mirrors tactics, and we’re letting them get away with it.