Thursday 1 June 2017

The Tories have crashed the economy

Since 2010 the Tories have created way more public debt than every single Labour government in history combined.

It doesn't matter which way you measure it (in £billions or as a % of GDP) they've loaded up a fantastical amount of debt, and despite their 2010 election promise to stop adding to the debt mountain by May 2015, the deficit is was still over £50 billion in 2016-17 and their manifesto says they won't be getting rid of it until the mid 2020s!

Given this unprecedented borrowing splurge, you might have thought that the Tories might have invested some of it in infrastructure and innovation to develop the wealth of the future so that the country might be able to one day pay it off, but no!

What they've actually done is slash investment back as part of their ideological austerity drive, so that we have one of the lowest levels of investment anywhere in the developed world at just 1.7% of GDP (around half the average).

They've also exacerbated the situation by creating the worst slump in workers' purchasing power since records began (a wage slump matched only by crisis-stricken Greece anywhere else in the developed world).

The result of course has been almost an entire decade of economic stagnation. 

Between 2012 and 2016 the Tories hid the flatlining economy quite well by overseeing the largest immigration influx in UK history. In 2015 Theresa May set the all-time net immigration record of 336,000 in a single year (equivalent to a city the size of Coventry).

This immigration inflow masked the flatlining economy as the Tories cheerily pointed to increasing GDP figures to brag about what a great job they were doing, without bothering to explain to the public that almost all of the extra economic activity was accounted for by the increasing population.

To those of us who understand how the economy actually works the idea of slashing investment and crushing down economic demand with the worst wage slump in recorded history in order to hand vast tax giveaways to the tiny super-rich minority looks like an absolutely awful idea, but somehow this has been presented as the Tory "long-term economic plan", and somehow millions of people have been conned into believing that there is no alternative to doing things this way.

In the wake of the Brexit vote three things have happened. Firstly the flow of migrants has slowed down significantly, meaning the Tories' fake immigration-backed economic recovery is faltering;secondly an awful lot of businesses have put their expansion plans on hold, or even set about reducing their UK operations in order to focus on the bits of their business that will remain in the EU Single Market; and thirdly workers have seen the value of their wages eroded away as the slump in the value of the pound has lead to increased inflation.

The result of this combination of factors is an anaemic growth rate of just 0.2% (it would surely be negative if the impact of non-EU migration was discounted), the joint worst in the G7.

So next time you hear Tories bragging about their wonderful economic track record, remember how their fake immigration-boosted "recovery" worked, and how the wheels have totally fallen off it since David Cameron lost his astoundingly reckless EU referendum gamble.

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