IF Sajid Javid thinks the UK economy is “strong and resilient” – his stated view after official figures showed a fall in output in the second quarter amid Brexit fears – he should frankly take a good look around.
After all, he is the new Chancellor of the Exchequer and it is crucial that the person who holds this office is quickly on top of his or her brief. This process could start with an objective assessment of the state of the UK economy, as opposed to the type of red, white and blue-tinted view espoused by the Brexit brigade.
Often, it is good to look not just at the official figures and myriad surveys, which currently paint a woeful economic picture, but also at what is happening in the real world.
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Tories are not always known for an astute awareness of real-life issues, particularly, it has seemed over the years and decades, when it comes to the challenges faced by those on low incomes. However, it is never too late to learn. Just to be clear, we are not talking here about relatively unimportant matters such as when one senior Tory or another sampled a meat-filled pastry in the context of value-added tax. This is about the grinding everyday misery faced by millions of people, after nearly a decade of Conservative austerity, and its economic consequences.
Mr Javid could start his odyssey of discovery with something that would not take too much time out of his no-doubt-Brexit-filled schedule – with a quick glance at the myriad collection points for food banks in supermarkets. Food banks, while those who run them are doing a crucial job, are not the sign of a healthy economy or society.
Hopefully, contemplation of the reasons for food banks might even help inform his welfare spending or at least mitigate the carnage we have seen over nearly a decade now on this front. Given the scary mix of the Cabinet, and Mr Javid’s seemingly hard-line approach on welfare, we should not hold our breath.
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The Conservatives might continue to regard themselves as good stewards of the economy, even as millions of households and increasing numbers of businesses despair. But this has consistently been a misplaced self-confidence on the part of the Tories. Remember the Lawson boom and bust? And the last nine years have made the notion that the Conservatives know what to do with the economy laughable, even before we get to the unbelievably damaging Brexit foolishness.
Yet Mr Javid and the Tories refuse to take responsibility for the Conservatives’ mess.
Last Friday’s gross domestic product data, revealing the UK economy shrank by 0.2 per cent in the second quarter, its first contraction since 2012, fuelled fears of recession. Things have not been looking much, if any, better in the current quarter so it is not surprising that people fear we will get the two straight quarters of decline which would constitute technical recession.
Yet Mr Javid seemed unperturbed by last Friday’s figures, choosing instead to bang the political drum.
He declared on Twitter: “Despite global economic challenges, the UK economy remains strong & resilient.”
Global growth may be slowing but it is clear from a slew of official data and a welter of surveys that the UK’s economic mess is for the most part made in Britain, by the Tories.
One wonders what Mr Javid might have said about Friday’s GDP figures if he were shadow chancellor, and Labour had been presiding over the economic shambles we have had for nearly a decade from the Tories.
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The Chancellor’s deflection of responsibility is also particularly interesting given the Tories’ long-running and misguided blaming of Labour for the global financial crisis that ushered in the 2008/09 recession. The clue for the Tories should be in the word “global”.
In terms of their own record, the Conservatives went for utterly savage welfare cuts, taking the money out of the pockets of those people who have to spend all they have to live and thus hitting the economy as well as causing untold misery.
At the same time, the Tories slashed a UK corporation tax rate which was already extremely competitive on the global stage to levels that even the business lobby could surely hardly have imagined. Especially seeing as we were, the Conservatives told us, “all in this together”.
In March 2011, former chancellor George Osborne heralded “a Britain carried aloft by the march of the makers”. This march, it appears, was cancelled. Rather, the makers have been laid low by the economic weakness and in recent years also by the Conservatives’ grave Brexit error.
This error has its roots in former Tory prime minister David Cameron seemingly feeling the need to try to sort his party’s tiresome infighting over Europe once and for all with a vote. As is sometimes the case after prolonged economic woe, various right-wing actors emerged to turn the debate into an anti-immigration campaign. The rest, sadly, is history.
Mr Javid, responding to the dismal economic statistics on Friday, chose to focus on record employment.
He might also, as part of an odyssey of discovery which could help him avoid making the same mistakes as his predecessors, want to take a really good look at the composition of employment.
You would imagine some Tories, hopefully not most, might love the gig economy. The notion of an insecure, low-paid workforce, willing to be as flexible as required to keep a roof over their heads, would seem to be something that might appeal to some of the Conservatives who appear to yearn intensely for Victorian times.
If Mr Javid thinks the UK economy is so strong, he should take a look at figures last week showing mortgage lenders’ claims for home repossession in England and Wales leapt to the highest since late-2014 in the second quarter. The Ministry of Justice recorded 6,179 claims in county courts for repossession in the three months to June, up 39% on the same period of last year. This was the biggest year-on-year increase since the financial crisis.
This is even before we get to Brexit, which Mr Javid and many of his Cabinet colleagues appear determined to have at any cost. They seem unperturbed about a no-deal Brexit, which would surely turn the discussion over whether or not the UK can avoid recession into talk about whether the downturn will be as deep and painful as that triggered by the global financial crisis.
The Chancellor and his Cabinet colleagues need to realise, before it is too late, that the UK economy is, currently, neither strong nor resilient.
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