The Tory election campaign has been built on one premise and one premise alone – that it was their government who was responsible for an economy now bouncing back, and that it was their austerity programme that fixed it all.
But new figures released just yesterday have shown that the Tories’ entire campaign – their sole reason any voter might be convinced to support them – was built on a house of cards.
And that house has now come tumbling down, as the Office of National Statistics showed on Tuesday (April 28) that economic growth in the first quarter has all but ground to a halt, halving from the previous quarter to a meagre 0.3 per cent.
When faced with an unexpected disaster, many people will react with a pathologically extreme case of denial, and that’s just what chancellor George Osborne did today.
“Good news, economy continues to grow,” he tweeted in response to the ONS figures.
Prime minster David Cameron joined him in a similar panic.
“Our economy is growing; growing at a rate that many other European countries frankly would give their eye teeth for,” he said in a speech yesterday in north London yesterday.
That 0.3 per cent growth is virtually no growth at all – and that it’s sharply declined since late last year – escaped the Tory leaders scrambling to come up with an answer.
Dig a little deeper into the latest figures and an even starker picture emerges.
The so-called 0.3 per cent growth is a house of cards in its own right, propped up by zero inflation—an anomaly not seen since the beginning of last century—which is in turn propped up by slumped oil prices, a phenomenon that’s not likely to last very long.
Take away this underlying fact, and everything else about the economy is faltering, hanging by a thread – construction output has plummeted by 1.6 per cent, industrial production shrunk by 0.1 per cent and agricultural output likewise nosedived by 0.2 per cent.
The services sector – which includes bars, restaurants and hotels – is the only major part of the UK economy that’s exceeded pre-crisis levels of growth, although even this sector has cooled from the previous quarter.
Relying on a sector built on low-wage labour for continued economic growth shows just what a sham the definition of Tory “economic growth” is.
Back in 2012, chancellor George Osborne pledged an export and manufacturing-led recovery, setting a target of doubling UK exports to £1tn by the end of 2020.
The British Chambers of Commerce (BCC), however, believes that this target is now a faraway dream. And the BCC’s direct-general John Longworth laid the blame squarely on the government’s shoulders, criticising the coalition for not supporting British exporters in order to rebalance the economy.
“We’ve got a government that is not putting its money where its mouth is,” he said.
All this unequivocally points to a hollow economic recovery, one that’s not felt by the majority of working people simply because it’s not really a recovery at all.
Even the completely apolitical Howard Archer, chief UK economist of IHS Global Insight, noted that the latest news on the stalling economy can only spell doom for the Tory party in its bid for re-election.
“Given that the Conservatives and Liberal Democrats are hoping that many undecided voters will ultimately decide to vote for them due to their management of the economy, this marked slowdown in growth is particularly unwelcome news coming just over a week before the general election,” he said.
Unite political director Jennie Formby argued that as the Tories’ case for re-election continues to wither away, the choice faced by the electorate next week becomes increasingly clear.
“These latest figures have given us indisputable evidence that the Tory campaign is built on cynical lies,” she said. “Even the miniscule economic growth we’re experiencing now is based entirely on the short-term coincidence of zero inflation. The measures by which we will see sustainable growth – healthy manufacturing and construction sectors with a meaningful rise in wages – are all in the gutter now.”
“Osborne’s so-called “long term economic plan”—tax cuts for the rich and austerity for the rest of us – is a short-term roadmap to disaster for the vast majority of working people,” Formby added.
“Austerity does not work – no credible economist anywhere in the world supports this ideology that has been proven wrong time and again, both here in this country and abroad. We are on the precipice of another recession if we get five more years of Tory economics based on their relentless austerity dogma.
“The only way out is ensuring a Labour government that will secure a healthy and genuine economic recovery that’s felt by all, not only those at the top.”