Osborne: "Turning a Corner" or Turning an Eye on Society??

George Osborne, the Chancellor of the Exchequer, said in a speech today that the economy is “turning a corner”. Now, people who know me, know that I’m not a big supporter of the current Tory government, but the way that Mr Osborne is touting this story really takes the biscuit. In London, this morning, he said that there were “tentative signs of a balanced, broad based and sustainable recovery”. About time...! We’ve now had this Conservative theory of austerity and budget costs for the last three and a half years, and we’re only starting to see signs of recovery!

 

Looking at the GDP growth figures per quarter, during the time that the Conservatives have been in power, there have been six quarters of growth and four quarters in which the economy shrank. Now, admittedly, a lot of the financial trouble that we have been in has been due to the recession in the Eurozone (i.e. the countries who use the Euro as their currency), but other EU countries have weathered the storm better than the UK. Germany, for example, has fared better, as well as other, lesser European nations, such as Estonia.

 

But, and this is my key gripe with economists, many only care about the figures on the page. Whilst growth figures look good in news reports, can anyone really honestly say that living standards are better than they were in 2010, when this Conservative government took power? Food prices are on the increase, energy bills are on the increase and more and more families are struggling to make ends meet. But, I’m sure that come Spring 2015, when the campaigning for the General Election is well under way, that the Conservatives will wheel out the growth statistics, saying that “look at our GDP figures! We’re helping people!”, even though more people may be living in poverty than before.

 

My final problem with George Osborne’s speech this morning was his boasting statement that “those in favour of a Plan B have lost the argument”. This is clearly rubbish. It took three-and-a-half years for any real, sustained improvement in the figures. In the UK, quarterly GDP growth has not been above 1% since Q3 2007 (July-September 2007), showing that whilst the UK economy has “turned a corner”, it’s hardly a fantastic recovery. Whose is it to say that if Ed Balls was running the economy, we would have favoured any better (or indeed worse)? No-one - we will never know. So Mr Osborne cannot, and should not, state that his plan was better than any other plan, because there is no way of knowing. All that should matter is the question of whether living standards (because that’s all that important) are better or worse than they were in 2010 with the Coalition came together. If it is better, then it has been a success, if not, then they have been a failure.

 

We can all stand up at the front of the class (or a press conference) and read out a list of figures, saying, “look, everything is better now!”, but the real people who know whether the Coalition have made living easier and better for them, or worse for them. And they hold the key at the next general election in 2015.