Is Britain booming thanks to the Chancellor's austerity economics? In a word, no.
John Weeks from the University of London has helpfully debunked George Osborne's claims using four charts. These show that the recovery actually began in mid-2009 and continued unabated until coalition policies killed it off in the second half of 2010. In other words it would have been a fairly normal economic cycle, with a reasonable recovery, until the Chancellor intervened.
The charts, taken from ONS data make this point very well.
The ConDem's often claim that however weak our growth is, it’s better than other countries. Again this is mince. One country suffered a recession deeper than the UK (Japan), and another almost as deep (Germany). Japanese GDP is now more than 2% above the beginning of 2008, and Germany’s is 3% above. America’s economy has recovered to 4% above 2008. Britain is still below 2008, even with anaemic growth of 0.8% last quarter.
Weeks' concludes, "Osborne’s achievements are quite different. Draconian expenditure cuts achieved an initial reduction in borrowing, which killed a nascent recovery and mired the economy in stagnation for three years."
Headlines that we are achieving the 'highest employment level ever', can also mislead people into believing that we have a robust recovery. Stephen Boyd at the STUC sets out why this claim isn’t very significant at the Better Way blog. Brian Ashcroft covers Scotland's relative position at his blog.
Stephen highlights concerns over the increase in self-employment - working less hours, earning less money and as a consequence paying less tax. The headline figures also tell us very little about the quality of new jobs being created. For example, around 120,000 zero-hour contract jobs in Scotland. And of course the unprecedented decline in real wages since 2009. He concludes, "it's good that employment is rising and unemployment falling in Scotland, but the labour market is nowhere near a state that would justify the grand political claims."
There is a meaningful recovery for some. As Paul Johnson at IFS shows, the richest 1% of the population are becoming increasingly removed from everybody else. The share of post-tax income captured by the richest 1% leapt from 8.2% to 9.8% in 2013/14. The total post-tax income increased by about £37 billion last year. Of this, £16 billion went to the richest 1%, with just £11 billion shared across the poorest 50 per cent. This doesn’t seem the most sensible or efficient kind of ‘recovery’ possible.
Austerity is only for the workers in Osborne's Britain.