We’re supposed to think that the Conservative party
are good with the economy. Sure, they might be cartoonishly evil
“It is to end the free movement of people, once and for all”
- but ultimately rich people are good with money,
That’s why they’re rich!
There’s just one problem with that theory however
It’s not remotely true.
The Tories are better on the economy - so says political common sense.
And, while they might be ...challenged...when it comes to compassion and social justice,
in a market economy - where taxes from growth pay for public services
they're usually considered to be the safest pair of hands
“People who think they’re right to take benefit and do nothing for it, those days are over.
I ought to club them and eat their bones!”
“hehe”
Except when you look at their record since they came to power,
first with the Liberal Democrats in 2010, then by themselves,
and then since 2017 with the DUP, they’re a bigger disaster than Prince Andrew
on the television giving an alibi to the BBC’s Emily MattLiss.
“You were there with her that night…”
When judging economic success you want to look at three things:
the first is growth - the value of everything being produced
(like making a car) and consumed (like buying a car) over the course of a year.
This is called GDP, or Gross Domestic Product, but GDP in isolation can be misleading.
Indonesia’s GDP is bigger than Switzerland’s
but nobody would say it is outperforming the home of cuckoo clocks and Roger Federer.
So a better measure is GDP per capita, that’s the size of the economy divided by the number of people
The second measure is productivity. Productivity means how much you get out for how much you put in.
Measuring this for the economy is actually pretty straightforward:
you get the GDP per person figure and divide it by hours worked.
This gives you an average of the value - you, me, your friends, family, neighbours
and so on - produce in a single hour of work.
Then there are wages. For much of the 20th century rising productivity
meant rising wages, meaning a virtuous cycle which - in effect
- made everyone better off. The economy was more productive meaning workers
benefitted more from a larger expanding pie.
Ride with the young adults who are buying 70% of all homes sold.
Except over the last ten years - specifically since 2010 -
that’s not been happening.
On GDP per capita Britain is now poorer now than it was in 2007
- the year before the financial crisis. In fact it’s around $7000 poorer per person
- and this is from 13 years ago!
Now in fairness we can’t blame the Tories for the financial crisis.
And it’s also important to say we can’t blame Labour either
- what they did was a bail out so big that it in effect it saved capitalism.
Don’t take my word for it, here's congressman Paul Kanjorski speaking on American television in early 2009.
“Would have collapsed the entire economy of the United States
And within 24 hours the world economy would have collapsed.
It would have been the end of our economic system and our political system as we know it."
So given all that let’s start from 2011 - one year into the coalition government.
As you can see, GDP per person is only slightly higher now - 8 years later - than it was then
and it is in fact lower than 2013.
Put this in historic perspective and you see the problem is pretty significant:
This is a level of economic stagnation has never happened before.
During the 1970s, so often used as an example of economic calamity, GDP per capita tripled.
Labour taking us back to the decade of flares and fishfingers with...pineapple?
*70s music*
We should be so lucky.
The reason for that is productivity - output per person, per hour worked.
This is related to GDP per capita, because without rising productivity you can’t get rising economic growth.
Here as well we’ve seen stagnation for a decade.
That means an average hour’s work today,
despite improving technology, isn’t producing more value than ten years ago
Indeed Britain’s productivity now is more or less the same as it was in 2005 - that’s 14 years ago!
Again it’s important to be clear about this: this has never happened before, it's unprecedented
since the lightbulb, the Napoleonic wars, the invention to capitalism,
even the first season of Friends.
In 2018 the average hour of work in Britain produced 52 dollars;
in Germany it was 60 dollars; in Denmark, 62 dollars; and in the Netherlands, 65 dollars;
In Ireland it was - wait for it - 84 dollars.
“I’d like to take this chance to apologise
To absolutely nobody! *distorted*
In concrete terms that means the average British worker
is producing in an hour what takes 45 minutes for someone in the Netherlands.
What’s more that divergence is getting worse:
by 2025 the UK will be nearly a third less productive per hour than Germany.
You guys are so pathetic!
That matters because, as I noted at the start, you can’t have pay increases unless you have rising productivity
Which brings us to the final part of the Tories economic record: wages.
Rising wages matter - because if inflation is higher than
wage increases in real terms you are getting poorer.
It’s a bit like being on a really slow treadmill
- if you standstill you’re actually going backwards and eventually you fall on your face.
Real wages remain 5-10% lower today than they were in 2008.
Like GDP per capita and productivity, that has no precedent.
But of course the Tories came into power in 2010
- so let’s start there… as you can see real pay is the same now as it was then.
And of course the measure of inflation used here
doesn’t include what is the biggest expense of all, namely housing.
Given what’s happened to house prices over the same period,
its inarguable that the average person is poorer today
than when the Tories came to power in 2010.
Even that figure doesn’t tell the whole story because it doesn’t include the self-employed
who are around 15% of the labour force. They’ve been hit worse than anyone else
seeing incomes fall by 20% between 2008 and 2016, from £34,200 to £27,400.
Self-employment was Margaret Thatcher’s answer to the future of Britain’s economy
- but rather than creating prosperity it’s making people poorer.
And this is the ultimate measure of Conservative failure on the economy.
Until 2010 poverty was generally something limited to the unemployed,
the sick and pensioners - people who didn’t work.
Increasingly, however, its something which impacts working households more than anyone else.
Work, it turns out, often doesn’t pay.
20 years ago only 37% of those in poverty lived in a working household.
Today that figure is 60% meaning you're more likely to be in a working household and poor
than in one that doesn’t work.
For all the talk of the Tories creating jobs, which they have, these jobs are poorly paid
with the taxpayer subsidising corporations exploiting cheap labour
through corporate subsidies like housing benefit.
The growth of these jobs also explains why we are so unproductive as a country
- we need more people installing wind turbines and caring for the elderly
rather than shelf stacking in Poundland or working as a security guard for G4S.
“Not allowed!” “Why?”
“Because you’re not” “Who says?”
“It’s a security vehicle”
Those hit hardest by the growth of in-work poverty are children.
According to the IFS there are 4.1 million children living in poverty.
And things are predicted to get work with that figure expected to rise to 5.2 million children by 2022.
In Peterborough, Luton and Manchester child poverty is above 35%,
in Blackburn it goes above 40%, and in Newham in London it exceeds 50%.
Now those kinds of figures aren’t what you’d associate with economic success
- but with complete and utter failure.
Because 1 in 3 UK billionaires back the Conservative party,
who also enjoy the support of the billionaire-owned press,
you probably know someone who’ll say the Tories are better on the economy
- but whether its economic growth, productivity or wages
the last decade shows they couldn’t be more wrong.
Trusting the Tories on the economy is like expecting the Liberal Democrats to not lie on their leaflets
or Nicky Morgan to be decent with basic mathematics
“50,000 more nurses, if you look in 10 years time, than there are today”
"I know you keep saying that."
More than 2 million people using foodbanks since 2010
and 700 homeless people dying on our streets every year
Is an accurate reflection of what is actually happening
- and its being overseen by the most economically incompetent government in British history.
“The hospital’s generator is about to give out, lives will be lost!”
“Lives, lost… go on.”
The PR and big money donations of the billionaire classcan’t conceal that forever.
Because reality, somehow always finds a way of catching up.