Don’t Be Fooled - The Economy Isn’t Working For Everyone
The economy is doing well, they say. Public spending is finally in control, they gloat. We're doing a good job, they claim. Yes, apparently the chancellor, Philip Hammond, will reveal a healthier than expected economy with a corresponding reduction in borrowing in the Budget on Wednesday. Shouldn't we be happy?
Rarely do the papers reveal such a difference between political rhetoric and everyday reality for the masses. On Saturday tens of thousands marched in London to protect the NHS, which is at crisis point. Local authorities are desperately short on funds to cover social care services. Last week also saw a new report on the impacts of the cuts to police services, and threats of prison riots have been looming for months.
The IFS recently showed us that wage growth was the slowest for 60 years; the Resolution Foundation predict that income inequality will rise considerably; and day by day the number of people on insecure zero hours contracts grows.
Meanwhile, a change in inheritance rules, costing the tax payer £1bn, will increase the threshold to £1m. This will only benefit the very rich, and predominantly those based in the south of England. The chancellor will probably tinker with the tax system on Wednesday, and we’re likely to see a rise in the personal income allowance to help struggling families. However, the backdrop of rising inflation and freezes to public sector pay, tax credits, and benefits mean those on low incomes will continue to feel the squeeze. The rich, who can afford to make use of more larger ISA limits, will again the gain most.
Any illusion that the economy is serving the public is dead. It's exactly the opposite - the reduction in rates of borrowing is on the backs of struggling families, and economic growth is reliant on consumer debt and insecure work. The severing of economic prosperity from societal progress marks the end of an implicit contract between people and the government. Unless the government uses the 'good news' to stop the cuts and announce policies to improve job quality, we should not be joining in their self-congratulatory applause.