In our media it is mainstream thought that the Tories have run our economy with care, and that they are a much safer pair of hands than Corbyn and McDonnell. In polls regarding the running of the economy, Theresa May & Philip Hammond poll at 36% whilst Jeremy Corbyn & John McDonnell poll at 28%. This is a baffling statistic. In economic circles it is common knowledge that Austerity is a terrible economic policy, yet that information has not been distributed among the people.
GDP per capita growth
Gross Domestic Product per capita is slightly crude way of looking at the wealth of the nation, it is simply GDP divided by population. However examining this can track the growth of an economy. And whilst the Tories have resided over economic growth it is not impressive. The graph below tracks GDP per capita growth scaled in the first 7 year of their administration. To compare the two parties handling of the economy, I have scaled the GDP per capita they received in their first year in office to one and tracked the growth from that figure. We can see a distinct difference between a government that invests, and a government that does not.
This is the true measure of growth in the economy; how the everyday man and woman has done. The policy of austerity has been terrible for the every day Brit. In the graph below is real wage growth, so inflation has been taken into account. We can clearly see the drop due to the economic crash in 2008, but after that we can see a 2nd drop: the impact of austerity. The drop in investment and pay freezes cause the slow and gradual decline in wages. The 2nd drop we can see in 2017 is the impact that Brexit has had on the economy, not helped by tory policy which is causing wages to decline. If, and this is a very big if, the economic forecasts hold true we will finally recover from the financial crash in 2025.
The real hard hitting point of all this is that we are alone in suffering. We are the only country that has seen economic growth yet real wages decline. When you actually think about what that means it’s sickening. All of us in this country are working harder, causing the growth, but taking home less money. Talk about a stitch up. We have the 2nd worst economic performance in Europe, only Greece has outdone us in economic failure. Again we can see the difference between investment and austerity.
However the main Tory promise was debt reduction, a task that they have not only failed at but failed monumentally. This Tory government has borrowed more than every single previous Labour government combined. This government has increased the debt, as austerity has depressed wages and with that revenue from taxes.
The global economic crisis increased our debt not the Labour government. The Conservative government are increasing the debt now more than Labour did in economic good times. Labour did not overspend, even George Osbourne admitted he would have done similar to Labour in the wake of the economic crisis. Conveniently, for the tories, most of the press have neglected to inform the public about this. It was borrow, or watch the financial sector crumble and as much as I am not a fan of bankers, if that sector went down it would lead to chaos.
The long term economic plan that Cameron’s Tory party often talked about is not going to produce a bright future for the many. We can see what austerity has done for our growth forecasts. We now face the worse economic forecast since 1983.
In the first half of 2017 we had the worst growth in the EU. Our economy only managed a measly 0.5%. Germany and France had growth at 1.2% and 1% respectively. Both Brexit and Austerity is killing our economic growth. This is the future we face.
Our economic performance has been terrible, the 2nd worst in Europe since the Great Recession. We are meant to be a global powerhouse but we can’t even feed our own people. And the Tories are partly, if not mostly, to blame.