Recent economic reports were a damning indictment of seven years of Tory austerity, writes Ken Livingstone.
Last week’s Office for Budget Responsibility (OBR) forecast evaluation report says it will have to “significantly” lower its estimates for Britain’s productivity, blowing a large hole in Tory plans for the public finances ahead of the government’s November budget.
In particular, the revised figures point to the average rate of productivity growth of 0.2 per cent over the past five years as a more accurate guide for 2017 than the previous forecast of 1.6 per cent.
This was yet another confirmation of falling productivity, which is taking backwards our capacity to raise long-run living standards. Indeed, productivity is a staggering 15.1 per cent below the average for the rest of the G7 (Canada, France, Germany, Italy, Japan, Britain and the US) in 2016.
Additionally, a report from the International Monetary Fund (IMF) was yet another blow not only to the Chancellor’s already crumbling economic credibility, but the Tories’ whole political and economic project.
The IMF’s report confirmed downward revision to Britain’s growth and, with nearly all other advanced economies recovering at a faster rate than Britain, alarm bells should be ringing at the Treasury.
On the same day, the Office for National Statistics (ONS) published figures on construction, which were widely interpreted as further warning signs for the economy.
Philip Hammond’s plans to continue the policies of his predecessor are failing as the Budget approaches, and surely we need no more proof that the Tories’ ideologically-driven austerity approach has failed to boost living standards or improve the long-term potential of the British economy?
Yet neither in their speeches to the recent Conservative Party conference, or in other announcements since, have either Theresa May or Hammond shown they grasp the challenges the economy faces.
If May’s conference speech was supposed to be when she launched her increasingly faltering premiership, it was anything but.
In particular, there was not one significant announcement to deal with the fact that working people’s wages have flat-lined under the Tories and that millions of people are going to face a deepening cost-of-living crisis.
Furthermore, as John McDonnell commented, the Chancellor’s conference speech saw “40 wasted minutes speaking,” to only confirm that “after a year in the job he is continuing down the path of his predecessor and clinging to an old economic model that fails the many.”
At such a vital point in British history, with concerns about the economy and the government’s approach to Brexit growing by the day, it was a speech light on substance and high on anti-Labour smears.
From the Tories as a whole there is also little in the way of policies to tackle the increasing human misery caused by their failed approach to the economy.
They simply cannot tackle the heightening housing crisis, address the funding shortfall in our NHS and social care system, or stop spiralling poverty and inequality.
Seven years of Tory failure has left our economy fundamentally weakened but we have a government that has buried its head in the sand and refuses to change course.
As I’ve written in this column previously, more and more evidence by the day supports Labour’s argument that weak investment is at the centre of our economy’s problems and has damaged productivity growth.
This is why it is not enough for May or Hammond to go, but in fact we need an end to Tory government and the end of the failed austerity project.
The fact that, when they should be negotiating for people’s jobs and the future of economy when it comes to the Brexit talks, instead they are just negotiating among themselves is yet another reason why they need to go.
Unlike the increasingly discredited Tories, who used their conference to rehash old policies and present watered down version of Labour’s policy ideas, the last few weeks have again seen Jeremy Corbyn, John McDonnell and the Labour leadership team outline how the next Labour government will provide the proper investment our country needs.
With a proper industrial strategy, a National Transformation Fund to drive investment and measures such as a £10 per hour real living wage to improve living standards, Labour is both ready for a government and equipped with the policies that the British economy desperately needs.
The contrast to the Tories’ inactivity could not be more stark and the stakes couldn’t be higher. As McDonnell said this week, only Labour will “build a high wage, high skill economy for the many not the few.”
First published by the Morning Star