Tory Myth 3- the Scroungers off the State and the Myth of the Self-Made Man (or Woman!)

One of the things that most angers the Daily Mail are the scroungers off the state. They live off government handouts, often claiming fraudulently and not pulling their weight or paying their fair share. They are one of the evils of our society holding us back and ripping us all of us. And do you know what? I agree with them. The only difference is I know that the real scroungers off the state are not benefit claimants but super rich individuals and corporations. They are far more heavily subsidised by the state and by the taxes of ordinary people than anyone else.

The amount of money the state loses through welfare benefit fraud each year  is estimated at £1.3 billion, but this is a tiny fraction of the £34 billion the HMRC estimates is lost through tax evasion. If you add to that the huge sums lost through aggressive tax avoidance schemes we could be looking at perhaps close to £100 billion of revenues the rich are unjustly depriving of the Treasury. And yet five times more people are employed by the DWP investigating benefit fraud by society’s poorest than are employed by The Revenue investigating tax fraud by society’s richest.











The amount of welfare benefits the government pays to the “idle” poor is also massively exaggerated. Welfare spending is a huge part of government expenditure- about £1/4 trillion each year, i.e. 35% of total spending. However, by far the biggest proportion of that goes to the retired through retirement pensions- over £110 billion, nearly half of all welfare spending. By contrast, only a tiny fraction of welfare spending goes to the unemployed- £3.4 billion, that is less than 2%. In fact, the large majority of welfare benefits going to people of working age are to families who are working. This is mostly to subsidise what would otherwise be inadequate earnings to pay for their housing and other necessities. A large proportion of this goes on housing benefit, mainly a cost arising from the country’s failure to invest in affordable public housing. See my previous blog;  http://jeremysblog67.blogspot.co.uk/2017/05/tory-myth-2-right-to-buy-and-gods-of.html

In work poverty has been a growing trend in recent years. A comprehensive study published this month by Cardiff University found that a staggering 60% of households living in poverty are working households. In 2013 it was estimated there were 3 million people in in work poverty (and it would now be even more). That is far more than the number of unemployed or unfit to work. This therefore gives the lie to the simple notion that people can work themselves out of poverty. Millions are working very hard but are still trapped in poverty. And the Tory government’s welfare benefit changes contribute massively to this problem,  including housing benefit caps, benefits cuts, the bedroom tax and benefits sanctions. Shockingly this is even affecting very valued and professional public servants like teachers and nurses, especially in areas of high housing costs like London and Bristol. Incredibly, in work poverty has even forced many teachers and nurses into using food banks or made homeless. If you think this is just an urban myth I suggest reading some of their real life stories, e,g.  https://www.theguardian.com/education/2017/may/23/homeless-teachers-ashamed-housing-crisis-professionals.
Sadly’ it’s not an urban myth but an urban reality that we should be thoroughly ashamed of and determined to put right.

One popular urban myth though is that the rich proportionately pay more tax than the poor. If only that were true. In 2014/15 the poorest fifth lost 47 per cent of their income to the taxman, while the richest fifth of society paid only 34 per cent. Part of that reason is tax evasion/avoidance by the rich, but the main reason is direct taxes, such as VAT. These disproportionately affect the poorest as they are charged at the same rate to all income groups (And note it is been Tory governments that have put up these direct taxes - John Major’s government increased VAT from 15 to 17.5% in 1991 and David Cameron’s from 17.5% to 20% in 2011. More recently Theresa May's government have doubled the rate of IPT paid e.g. on car and home insurance).

Yet over the past three decades, and especially since the recession, the wealth of the richest has grown while most of us have seen our real incomes stagnate or fall. For example, between 2009 and 2015 the UK’s richest 1,000 families saw their assets increase from £258bn to £547bn, a rise of more than 112%. . But Average UK incomes have yet to recover from the worst economic crisis since the Great Depression and over the past 10 years the UK has seen the lowest levels of pay growth of any European country- equal with Greece. Thousands have been flocking to food banks. But this financial elite have emerged not only with their fortunes intact, but holding a larger slice of the cake than ever.

And while our nurses, teachers and other public servants have seen their pay frozen or increases capped below inflation, the bosses running our most successful companies have increasingly felt free to award themselves huge pay rises year after year. This is illustrated by another alarming statistic. In 1980 the average CEO of a UK FTSE 100 company earned 18 times the average worker. Today they earn 180 times- an increase in the pay gap ratio of 1,000%.

Needless to say our top companies’ performance has not matched the 1,000% increase in their CEOs’ pay! And this is kind of the point. If we richly rewarded those at the top for being wealth creators that benefited us all that might start to justify this huge increase in their awards- as the wealth the super-rich generates “trickles down” to us all. The only problem is the facts no longer support this. It used to be true, but for decades now, both nationally and globally, the proportion of the wealth generated by business going to ordinary workers rather than the owners has steadily fallen.

What is also not recognised is that those running successful businesses (including property empires) and who take such large rewards for themselves are only able to do so on the backs of the rest of us. Directly or indirectly their businesses and therefore their income and wealth is heavily subsided by us all. They rely on many, many billions of pounds of state funding to provide them with the essential conditions in which their businesses can operate and thrive:

• an educated and healthy workforce -funded by state education and the NHS;
• the state funded legal infrastructure through the police, courts and security services to ensure the necessary conditions of peace, law and order;
• the state-funded physical infrastructure of our transport systems and energy supplies;
• the state-funded research and development (of about £10 billion per year) which over time has enabled the development of technologies like the internet on which most businesses depend;
• a welfare benefits system which heavily supports and subsidises the incomes of many of their employees or tenants, especially through tax credits and housing benefits. According to a study by the Building and Social Housing Foundation in 2012, more than nine in ten of every new housing-benefit claims in the first two years of the coalition government went not to the unemployed but to working households. Many of these claimants are workers whose pay is so low that they simply cannot afford the often extortionate rents being charged by private landlords. Ironically, a number of rich Conservative politicians who rail against state spending on welfare benefits are indirectly some of the biggest beneficiaries from it! One such private landlord is Conservative MP Richard Benyon, one of Britain's wealthiest parliamentarians. He benefits from £120,000 a year through housing benefit collected from his tenants.

• As highlighted in my previous blog,  many billions of pounds of tax payers’ money are also paid out to private companies running state services, often very badly, and who often pay their owners huge salaries- many more times than our Prime Minister.

Perhaps the starkest illustration of how the rich are so heavily subsidised and supported by the rest of us was the 2008 banking crisis. More than £1tn of public money was poured into the banks following the financial collapse. The emergency package came with few government-imposed conditions and with little calling to account. "The urge to punish all bankers has gone far enough," declared a piece in the Financial Times just six months after the crisis began. But if there was ever such an "urge" on the part of government, it was never acted on. In 2012, 2,714 British bankers were paid more than €1m – 12 times as many as any other EU country. When the EU unveiled proposals in 2012 to limit bonuses to two years' salary with the agreement of shareholders, there was outrage in the City. Luckily, their friends in high office were there to rescue their bonuses: at the British taxpayers' expense, the Treasury went to the European Court to challenge the proposals.

Contrast this with the fate of those at the bottom of our society, who have suffered at their expense. In the Tory government austerity programme that followed the financial crisis and the bankers’ bail out, state support for those at the bottom has been eroded. The support that remains is given with stringent conditions- "Benefit sanctions" are imposed often for the most spurious or arbitrary reasons. 
https://www.theguardian.com/society/2016/may/11/benefit-sanctions-hurting-low-paid-vulnerable-people
According to government figures, 860,000 benefit claimants were sanctioned between June 2012 and June 2013, a jump of 360,000 from a year earlier. According to the Trussell Trust, more than half of food bank recipients had to rely on their handouts due to cuts or sanctions to their benefits. These have very often been imposed erroneously (and nearly always disproportionately), such as claimants being sanctioned for missing a signing on day because of a welfare-to-work training or a job interview! (See for example,  http://stupidsanctions.tumblr.com/ ).

The lack of understanding and compassion shown, especially to benefit claimants suffering mental health problems, has been truly disturbing . Some of those sanctioned have even been PTSD-suffering soldiers. They have put their lives on the line for their country only to be badly let them down by having  removing their benefits for wholly inadequate reasons. In some cases these has even led to their deaths. See e.g. http://www.independent.co.uk/news/uk/benefits-sanction-resulted-in-my-brother-david-clapson-s-death-says-gill-thompson-as-she-pleads-for-a6911386.html

Likewise, there have been huge numbers of the sick and disabled who have been wrongly assessed as fit for work and had their benefits withdrawn, following incompetent assessments by the likes of Atos. As a result there have been hundreds of thousands of appeals against fit-for-work decisions in recent years, about four in 10 of which have succeeded. However, in the meantime the appeals process took too long for some- nearly 90 people a month died after being declared fit for work during 2011-14.

As a Christian I try to follow the biblical principles of Micah 6 v 8;  “He has shown you, O mortal, what is good. And what does the Lord require of you? To act justly and to love mercy and to walk humbly with your God.” I am appalled by the lack of justice and mercy shown towards the most needy and vulnerable in our society through the austerity-driven benefits cuts and sanctions. I am equally appalled at the apparent mercy shown to rich bailed out bankers (see above) and the tax cuts given to the very richest individuals and corporation provided by this government- the large reductions in corporation tax, higher rate income tax and inheritance tax. What system of values can say that we don’t have the money to provide for the basic food and housing needs of society’s poorest and yet can offer such handouts to the very richest? It is certainly not a set of Christian values, as the bible  highlights compassion and justice for the poor as the number one social issue (mentioned 148 times) and also highlights the greed of the rich as the number one social evil.Among many other verses that could be cited:

“Speak up for those who cannot speak for themselves, for the rights of all who are destitute. Speak up and judge fairly; defend the rights of the poor and needy”— Proverbs 31:8-9  

"Is not this the kind of fasting I have chosen: to loose the chains of injustice and untie the cords of the yoke, to set the oppressed free and break every yoke? Is it not to share your food with the hungry and to provide the poor wanderer with shelter…” — Isaiah 58:6

“Woe to those who make unjust laws, to those who issue oppressive decrees, to deprive the poor of their rights and withhold justice from the oppressed of my people... What will you do on the day of reckoning, when disaster comes from afar? To whom will you run for help? Where will you leave your riches?”— Isaiah 10:1-3

“There need be no poor people among you, for in the land the Lord your God is giving you to possess as your inheritance, he will richly bless you...” — Deuteronomy 15:4-5

The Tory arguments I have heard put to justify this injustice simply do not stand up to the evidence.

If you allow the rich to prosper and keep more of their money the wealth will trickle down to us all including the poorest
- It is not simply their wealth- ultimately it is the Lord’s and they could not earn their wealth without the direct or indirect support they receive from the state (see above);
-Generally they have horded their wealth and have allowed themselves to get richer and the poor and ordinary folk to get poorer so the wealth has not trickled down.

We can’t afford to be so generous in our “hand outs” to the poor
-We remain a rich country and if we can afford to be so generous with e.g. our tax cuts to the rich we could choose instead to be more generous to the poor. (Deuteronomy 15:4-5)
-It would actually benefit our economy and therefore most of us far more if we gave more in benefits to the poorest in our society than tax cuts to the rich. The poor actually will put that money back into our economy by buying the basic things they need. The rich will often horde their wealth, often spending it or hiding it abroad and beyond the tax man’s reach.
-The austerity agenda that this slashing of benefits is part of has not worked to bring down the state debt and has been  been economically self-defeating. See my earlier blog
http://jeremysblog67.blogspot.co.uk/2017/05/tory-myth-1-labour-crashed-economy-and.html )

It's work which is the way out of poverty not benefit hand outs
-If only that were true. 60% of households in poverty are now working households. One of the main causes for that is the lack of affordable housing in so many parts of this country which means that many working people simply can’t earn enough to pay their rent and put food on the table without state benefits.

The advocates of state interventionism are dismissed as relics from the 1970s. (See my response to that in my earlier blog;  http://jeremysblog67.blogspot.co.uk/2017/05/tory-myth-2-right-to-buy-and-gods-of.html ).Yet state interventionism is still alive and well in modern Britain, but it now  exists primarily to benefit the rich rather than the poor. Ultimately it is not just unjust, it is inefficient and unsustainable and it is certainly contrary to biblical Christian values.

I don’t believe in the self-made man. As a Christian, I believe in the God-made man. Everything we have is ultimately God’s and what we acquire in this life we do so mainly because of what we have been given. I think of my own situation. I have a very good, well-paid job as a lawyer. I earn about three times the national average wage (despite my pay falling over the last 5 years). I would therefore still (just about) slip into that top 5% of earners who Labour would tax more. I could argue that I deserve that level of pay and shouldn’t be taxed a penny more as I have got where I am “through my own efforts”. After all, I have always worked very hard at school and at work, and therefore achieved top O/A level and degree grades. At work on average I have probably billed more fees than anyone else in my firm and yet there are people in my firm who are rather better paid (especially the owners of the business). But then I think of many at my firm who just earn about the national average wage. I do work longer hours than most of them and directly bring in rather more fees, but do I deserve to be paid three times as much and to enjoy the standard of living I do? I certainly don’t work three times as hard and if I am good at what I do and bring in a lot of money for the firm that is not just because of hard work but because I have been lucky- or blessed as we Christians would say. Blessed to be born with certain abilities (including a tendency for hard work), blessed to be born into a middle-class family with two bright, supportive parents, blessed to have been helped in my studies by some excellent teachers. I am also blessed to have been able to buy our house at a time when property was rather more affordable than it is now. Without such blessings I could not enjoy the standard of living that I enjoy today, however hard I might try.

Those of us who do earn rather more than most can only do so because of blessings we receive from others (and ultimately God). It is therefore only right and fair that we with the larger pockets should be ready to pay more in taxes to help support those who are less fortunate and to contribute more to the public services upon which we will depend, however rich we are. This is why I, like many others who are more fortunate, wholeheartedly endorse Labour’s proposals to tax us richer few a bit more to help the many.

Tory Myth 3- Stopping the Scroungers off the State and the Myth of the Self-Made Man (or Woman!)

One of the things that most angers the Daily Mail are the scroungers off the state. They live off government handouts, often claiming fraudulently and not pulling their weight or paying their fair share. They are one of the evils of our society holding us back and ripping us all of us. And do you know what? I agree with them. The only difference is I know that the real scroungers off the state are not benefit claimants but super rich individuals and corporations. They are far more heavily subsidised by the state and by the taxes of ordinary people than anyone else.

The amount of money the state loses through welfare benefit fraud each year  is estimated at £1.3 billion, but this is a tiny fraction of the £34 billion the HMRC estimates is lost through tax evasion. If you add to that the huge sums lost through aggressive tax avoidance schemes we could be looking at perhaps close to £100 billion of revenues the rich are unjustly depriving of the Treasury. And yet five times more people are employed by the DWP investigating benefit fraud by society’s poorest than are employed by The Revenue investigating tax fraud by society’s richest.











The amount of welfare benefits the government pays to the “idle” poor is also massively exaggerated. Welfare spending is a huge part of government expenditure- about £1/4 trillion each year, i.e. 35% of total spending. However, by far the biggest proportion of that goes to the retired through retirement pensions- over £110 billion, nearly half of all welfare spending. By contrast, only a tiny fraction of welfare spending goes to the unemployed- £3.4 billion, that is less than 2%. In fact, the large majority of welfare benefits going to people of working age are to families who are working. This is mostly to subsidise what would otherwise be inadequate earnings to pay for their housing and other necessities. A large proportion of this goes on housing benefit, mainly a cost arising from the country’s failure to invest in affordable public housing. See my previous blog;  http://jeremysblog67.blogspot.co.uk/2017/05/tory-myth-2-right-to-buy-and-gods-of.html

In work poverty has been a growing trend in recent years. A comprehensive study published this month by Cardiff University found that a staggering 60% of households living in poverty are working households. In 2013 it was estimated there were 3 million people in in work poverty (and it would now be even more). That is far more than the number of unemployed or unfit to work. This therefore gives the lie to the simple notion that people can work themselves out of poverty. Millions are working very hard but are still trapped in poverty. And the Tory government’s welfare benefit changes contribute massively to this problem,  including housing benefit caps, benefits cuts, the bedroom tax and benefits sanctions. Shockingly this is even affecting very valued and professional public servants like teachers and nurses, especially in areas of high housing costs like London and Bristol. Incredibly, in work poverty has even forced many teachers and nurses into using food banks or made homeless. If you think this is just an urban myth I suggest reading some of their real life stories, e,g.  https://www.theguardian.com/education/2017/may/23/homeless-teachers-ashamed-housing-crisis-professionals.
Sadly’ it’s not an urban myth but an urban reality that we should be thoroughly ashamed of and determined to put right.

One popular urban myth though is that the rich proportionately pay more tax than the poor. If only that were true. In 2014/15 the poorest fifth lost 47 per cent of their income to the taxman, while the richest fifth of society paid only 34 per cent. Part of that reason is tax evasion/avoidance by the rich, but the main reason is direct taxes, such as VAT. These disproportionately affect the poorest as they are charged at the same rate to all income groups (And note it is been Tory governments that have put up these direct taxes - John Major’s government increased VAT from 15 to 17.5% in 1991 and David Cameron’s from 17.5% to 20% in 2011. More recently Theresa May's government have doubled the rate of IPT paid e.g. on car and home insurance).

Yet over the past three decades, and especially since the recession, the wealth of the richest has grown while most of us have seen our real incomes stagnate or fall. For example, between 2009 and 2015 the UK’s richest 1,000 families saw their assets increase from £258bn to £547bn, a rise of more than 112%. . But Average UK incomes have yet to recover from the worst economic crisis since the Great Depression and over the past 10 years the UK has seen the lowest levels of pay growth of any European country- equal with Greece. Thousands have been flocking to food banks. But this financial elite have emerged not only with their fortunes intact, but holding a larger slice of the cake than ever.

And while our nurses, teachers and other public servants have seen their pay frozen or increases capped below inflation, the bosses running our most successful companies have increasingly felt free to award themselves huge pay rises year after year. This is illustrated by another alarming statistic. In 1980 the average CEO of a UK FTSE 100 company earned 18 times the average worker. Today they earn 180 times- an increase in the pay gap ratio of 1,000%.

Needless to say our top companies’ performance has not matched the 1,000% increase in their CEOs’ pay! And this is kind of the point. If we richly rewarded those at the top for being wealth creators that benefited us all that might start to justify this huge increase in their awards- as the wealth the super-rich generates “trickles down” to us all. The only problem is the facts no longer support this. It used to be true, but for decades now, both nationally and globally, the proportion of the wealth generated by business going to ordinary workers rather than the owners has steadily fallen.

What is also not recognised is that those running successful businesses (including property empires) and who take such large rewards for themselves are only able to do so on the backs of the rest of us. Directly or indirectly their businesses and therefore their income and wealth is heavily subsided by us all. They rely on many, many billions of pounds of state funding to provide them with the essential conditions in which their businesses can operate and thrive:

• an educated and healthy workforce -funded by state education and the NHS;
• the state funded legal infrastructure through the police, courts and security services to ensure the necessary conditions of peace, law and order;
• the state-funded physical infrastructure of our transport systems and energy supplies;
• the state-funded research and development (of about £10 billion per year) which over time has enabled the development of technologies like the internet on which most businesses depend;
• a welfare benefits system which heavily supports and subsidises the incomes of many of their employees or tenants, especially through tax credits and housing benefits. According to a study by the Building and Social Housing Foundation in 2012, more than nine in ten of every new housing-benefit claims in the first two years of the coalition government went not to the unemployed but to working households. Many of these claimants are workers whose pay is so low that they simply cannot afford the often extortionate rents being charged by private landlords. Ironically, a number of rich Conservative politicians who rail against state spending on welfare benefits are indirectly some of the biggest beneficiaries from it! One such private landlord is Conservative MP Richard Benyon, one of Britain's wealthiest parliamentarians. He benefits from £120,000 a year through housing benefit collected from his tenants.

• As highlighted in my previous blog,  many billions of pounds of tax payers’ money are also paid out to private companies running state services, often very badly, and who often pay their owners huge salaries- many more times than our Prime Minister.

Perhaps the starkest illustration of how the rich are so heavily subsidised and supported by the rest of us was the 2008 banking crisis. More than £1tn of public money was poured into the banks following the financial collapse. The emergency package came with few government-imposed conditions and with little calling to account. "The urge to punish all bankers has gone far enough," declared a piece in the Financial Times just six months after the crisis began. But if there was ever such an "urge" on the part of government, it was never acted on. In 2012, 2,714 British bankers were paid more than €1m – 12 times as many as any other EU country. When the EU unveiled proposals in 2012 to limit bonuses to two years' salary with the agreement of shareholders, there was outrage in the City. Luckily, their friends in high office were there to rescue their bonuses: at the British taxpayers' expense, the Treasury went to the European Court to challenge the proposals.

Contrast this with the fate of those at the bottom of our society, who have suffered at their expense. In the Tory government austerity programme that followed the financial crisis and the bankers’ bail out, state support for those at the bottom has been eroded. The support that remains is given with stringent conditions- "Benefit sanctions" are imposed often for the most spurious or arbitrary reasons. 
https://www.theguardian.com/society/2016/may/11/benefit-sanctions-hurting-low-paid-vulnerable-people
According to government figures, 860,000 benefit claimants were sanctioned between June 2012 and June 2013, a jump of 360,000 from a year earlier. According to the Trussell Trust, more than half of food bank recipients had to rely on their handouts due to cuts or sanctions to their benefits. These have very often been imposed erroneously (and nearly always disproportionately), such as claimants being sanctioned for missing a signing on day because of a welfare-to-work training or a job interview! (See for example,  http://stupidsanctions.tumblr.com/ ).

The lack of understanding and compassion shown, especially to benefit claimants suffering mental health problems, has been truly disturbing . Some of those sanctioned have even been PTSD-suffering soldiers. They have put their lives on the line for their country only to be badly let them down by having  removing their benefits for wholly inadequate reasons. In some cases these has even led to their deaths. See e.g. http://www.independent.co.uk/news/uk/benefits-sanction-resulted-in-my-brother-david-clapson-s-death-says-gill-thompson-as-she-pleads-for-a6911386.html

Likewise, there have been huge numbers of the sick and disabled who have been wrongly assessed as fit for work and had their benefits withdrawn, following incompetent assessments by the likes of Atos. As a result there have been hundreds of thousands of appeals against fit-for-work decisions in recent years, about four in 10 of which have succeeded. However, in the meantime the appeals process took too long for some- nearly 90 people a month died after being declared fit for work during 2011-14.

As a Christian I try to follow the biblical principles of Micah 6 v 8;  “He has shown you, O mortal, what is good. And what does the Lord require of you? To act justly and to love mercy and to walk humbly with your God.” I am appalled by the lack of justice and mercy shown towards the most needy and vulnerable in our society through the austerity-driven benefits cuts and sanctions. I am equally appalled at the apparent mercy shown to rich bailed out bankers (see above) and the tax cuts given to the very richest individuals and corporation provided by this government- the large reductions in corporation tax, higher rate income tax and inheritance tax. What system of values can say that we don’t have the money to provide for the basic food and housing needs of society’s poorest and yet can offer such handouts to the very richest? It is certainly not a set of Christian values, as the bible  highlights compassion and justice for the poor as the number one social issue (mentioned 148 times) and also highlights the greed of the rich as the number one social evil.Among many other verses that could be cited:

“Speak up for those who cannot speak for themselves, for the rights of all who are destitute. Speak up and judge fairly; defend the rights of the poor and needy”— Proverbs 31:8-9  

"Is not this the kind of fasting I have chosen: to loose the chains of injustice and untie the cords of the yoke, to set the oppressed free and break every yoke? Is it not to share your food with the hungry and to provide the poor wanderer with shelter…” — Isaiah 58:6

“Woe to those who make unjust laws, to those who issue oppressive decrees, to deprive the poor of their rights and withhold justice from the oppressed of my people... What will you do on the day of reckoning, when disaster comes from afar? To whom will you run for help? Where will you leave your riches?”— Isaiah 10:1-3

“There need be no poor people among you, for in the land the Lord your God is giving you to possess as your inheritance, he will richly bless you...” — Deuteronomy 15:4-5

The Tory arguments I have heard put to justify this injustice simply do not stand up to the evidence.

If you allow the rich to prosper and keep more of their money the wealth will trickle down to us all including the poorest
- It is not simply their wealth- ultimately it is the Lord’s and they could not earn their wealth without the direct or indirect support they receive from the state (see above);
-Generally they have horded their wealth and have allowed themselves to get richer and the poor and ordinary folk to get poorer so the wealth has not trickled down.

We can’t afford to be so generous in our “hand outs” to the poor
-We remain a rich country and if we can afford to be so generous with e.g. our tax cuts to the rich we could choose instead to be more generous to the poor. (Deuteronomy 15:4-5)
-It would actually benefit our economy and therefore most of us far more if we gave more in benefits to the poorest in our society than tax cuts to the rich. The poor actually will put that money back into our economy by buying the basic things they need. The rich will often horde their wealth, often spending it or hiding it abroad and beyond the tax man’s reach.
-The austerity agenda that this slashing of benefits is part of has not worked to bring down the state debt and has been  been economically self-defeating. See my earlier blog
http://jeremysblog67.blogspot.co.uk/2017/05/tory-myth-1-labour-crashed-economy-and.html )

It's work which is the way out of poverty not benefit hand outs
-If only that were true. 60% of households in poverty are now working households. One of the main causes for that is the lack of affordable housing in so many parts of this country which means that many working people simply can’t earn enough to pay their rent and put food on the table without state benefits.

The advocates of state interventionism are dismissed as relics from the 1970s. (See my response to that in my earlier blog;  http://jeremysblog67.blogspot.co.uk/2017/05/tory-myth-2-right-to-buy-and-gods-of.html ).Yet state interventionism is still alive and well in modern Britain, but it now  exists primarily to benefit the rich rather than the poor. Ultimately it is not just unjust, it is inefficient and unsustainable and it is certainly contrary to biblical Christian values.

I don’t believe in the self-made man. As a Christian, I believe in the God-made man. Everything we have is ultimately God’s and what we acquire in this life we do so mainly because of what we have been given. I think of my own situation. I have a very good, well-paid job as a lawyer. I earn about three times the national average wage (despite my pay falling over the last 5 years). I would therefore still (just about) slip into that top 5% of earners who Labour would tax more. I could argue that I deserve that level of pay and shouldn’t be taxed a penny more as I have got where I am “through my own efforts”. After all, I have always worked very hard at school and at work, and therefore achieved top O/A level and degree grades. At work on average I have probably billed more fees than anyone else in my firm and yet there are people in my firm who are rather better paid (especially the owners of the business). But then I think of many at my firm who just earn about the national average wage. I do work longer hours than most of them and directly bring in rather more fees, but do I deserve to be paid three times as much and to enjoy the standard of living I do? I certainly don’t work three times as hard and if I am good at what I do and bring in a lot of money for the firm that is not just because of hard work but because I have been lucky- or blessed as we Christians would say. Blessed to be born with certain abilities, blessed to be born into a middle-class family with two bright, supportive parents, blessed to have been helped in my studies by some excellent teachers. I am also blessed to have been able to buy our house at a time when property was rather more affordable than it is now. Without such blessings I could not enjoy the standard of living that I enjoy today, however hard I might try.

Those of us who do earn rather more than most can only do so because of blessings we receive from others (and ultimately God). It is therefore only right and fair that we with the larger pockets should be ready to pay more in taxes to help support those who are less fortunate and to contribute more to the public services upon which we will depend, however rich we are. This is why I, like many others who are more fortunate, wholeheartedly endorse Labour’s proposals to tax us richer few a bit more to help the many.

Unmasking the Myths- Tory Myth 2- “The Right to Buy” and the gods of the Free Market

On the issue of public versus private ownership, I stand with those great bastions of socialism; Winston Churchill, Harold Macmillan and Ted Heath. I believe in a mixed economy… Hang on a minute, weren’t they Conservative Prime Ministers? Yes, they were, but they were leaders of the Conservative party before Margaret Thatcher. You see on this she really does have so much to answer for.

When Margaret Thatcher became leader of the Conservative party over forty years ago this heralded a huge shift in British politics. It wasn’t so much that she was the first woman leader of a major UK political party. It was that she brought with her a whole new system of political values. For the thirty years since the second world war there had been a consensus in political and economic thinking between the Labour and Conservative parties. There was a belief in an economy that mixed private enterprise across most industries with genuinely public services and privately owned/rented housing alongside a generous supply of affordable council housing. In fact, it’s Harold MacMillan’s Conservative government of the mid 1950s that still holds the record for the most council houses built in a year of ¼ million.  

However, Margaret Thatcher and her early supporters like Keith Joseph were, if you like, the “New Conservatives”. They were zealous converts to the monetarist, liberal economic/political philosophy of Hayeck and Friedman. They had an unswerving faith in “the free market” that almost bordered on idolatry. If we left as much as possible to be run by the markets, as free as possible from state interference, everything would work much more efficiently. This would encourage entrepreneurship which would drive forward our economy and our society. Although this would reward the best entrepreneurs with great wealth, this wealth would naturally trickle down to the rest of us, so that overall we would all be better off. It was the ultimate form of capitalism, but one from which we would all benefit supposedly. Unfortunately forty years of this ultra free market experiment has shown that overwhelmingly this has been very much to the detriment of most of us and to the benefit of a rich few. And it is this ultra free market right to buy philosophy which partly explains away the other two key Tory myths- competent management of the economy (see my earlier blog) and stopping the scroungers off the state (see my next blog).

The flagship policy of this popular capitalism was Mrs Thatcher’s “right to buy” your council house. Ordinary men and women were given the right to buy their own council house for a knock down price, so that they could become little capitalist themselves (and hence presumably voters for Mrs Thatcher’s New Conservatives- the party of the capitalists!).

I would suggest that in itself there was nothing wrong with giving ordinary council tenants the right to buy their own council house. After all, the bible sets a pattern of every Israelite having their own direct stake in their new promised land. Unfortunately, the “right to buy” over a period of 40 years has ultimately been allowed to become the “right to rip off”.
The problem was that as the council houses were sold off there was no real effort to replace the council house sold with new council houses. In fact, Conservative government rules prevented councils doing so. (And sadly the failure to build affordable housing was continued under New Labour governments). It was like chopping down most of the trees in a forest without planting new trees to replace them. In 1979 42% of the UK lived in council houses. This has now fallen to less than 8%.

And what happened to those ex-council homes? Research from 2015 found that about 40% of those properties were no longer owner-occupied but were in the hands of private landlords, charging up to seven times the average social rents.

Over time this “deforestation” of affordable public housing has been a major factor behind the following unhealthy trends:

•             a large increase in property prices relative to income. Over the last 20 years this has increased from 2x to 5x average annual salary and in London 3.7 x to 9x!
•             a significant reduction in young adults able to own their own home. This has fallen from 55% to 20% over the last 20 years
•             a large increase in the average rents or property prices relative to income. Over the last 30 years average rents have shot up from 10 to 25% of income and  about 35% in London. This in itself has been a major factor in increasing “in work poverty”.
•             a significant increase in young adults forced to live with their parents- now up to 1 in 4.
•             a significant increase in homelessness. This has doubled in the last 7 years alone. If you speak to some of the homeless in your own town you will find the lack of council housing is now one of the key reasons why many end up on the streets.

The right to buy did bring short term benefits to the tenants who originally bought their own properties at reduced prices. However, it came at a cost to their children and grandchildren due to the massive reduction in the stock of affordable public housing. The longer term beneficiaries have been a small group of individuals and corporations who have made themselves very rich at the expense of others through expanding buy to let property empires.

And it’s been much the same with the other public assets that have been sold off to the private sector; gas, electricity, water and rail. Like our public housing they were all part of our national infrastructure built at great expense with our money (from our taxes) for the benefit of the common good. Privatising these services (usually at an undervalue) was, to quote the former Conservative Prime Minister Harold MacMillan, like “selling off the family silver.” It brought a short term gain for the government but at a long term loss of annual profits which were diverted for the benefit of the shareholders rather than the greater good of the country. Instead of using the profits to reduce prices for the ordinary consumer or invest more to improve the service, many billions of pounds have been leached from the public purse into the hands of their shareholders; (mostly) rich individuals and corporations. This has happened whilst those same individuals and companies often avoid paying very much in tax. In a typical year for example the water companies declare profits totalling about £2 billion whilst paying taxes of only about £75 million, that is less than 4%!

But the sell off of our public services to the market didn’t end with the big national utilities. Our councils were required to let out most of their services to be run by private companies. And the same is happening now with so many of our central government functions. Our NHS, many of our state schools and key functions of the Department for Work & Pensions and even our prison service have sold or rented out many of their services to the private sector. This might all be fine if by privatising these services they became better and more efficient through being subject to the rigours of the market. However, the evidence points to no such benefits. It is a different matter where an industry is privatised that is genuinely in competition with others, e.g. the car and steel industry or the telecommunications service that became BT.  However, where local or national service monopolies have been privatised overall they have operated no better or more efficiently than the nationalised service. In fact, often they have performed worse. A couple of examples illustrate this; the East coast main line rail service and the DWP’s work capability assessments.

In 2009, the private operator of the East coast main line rail service, National Express, walked away from the franchise with a record of declining service. The service was returned to public ownership through the Directly Operated Railways. After 5 years of public ownership it had turned the service around so that it now delivered record levels of punctuality and passenger satisfaction. It had also run at a profit so as to earn the Treasury £1 billion over that period. Yet instead of using this as a blueprint for how to better run our railways in 2015 the Coalition government went for the quick buck and sold it off again- this time to Virgin.

Huge sums have been wasted by the DWP on private contractors like Atos incompetently carrying out disability assessments. Nearly hald of their assessments were overturned on appeal. Atos were sacked. Yet in 2016 the National Audit Office estimated that the DWP would pay over £1.6 billion to other private contractors like Capita to carry out health and disability assessments. And yet over the same period they were expected to only to save £1 billion in benefits. In other words these private contractors were literally costing the government over £1/2 billion more than they were saving! Do we never learn?

One of the damaging effects of the franchising off so many public services is the loss of control we need to ensure sensible and efficient planning of the services we need. One very clear and recent example of this is the last government’s extremely misconceived “free schools” policy. This policy virtually removes “free schools” from any local authority control. It allows individuals, charities or companies to set up their own “free school” almost anywhere they wish rather where new schools are most needed. Not surprisingly this has led to a widespread waste of badly needed resources. Public funds are diverted directly from central government (bypassing the local authorities altogether) to pay for new free schools to be set up in areas where there is often no need for a new school- usually more prosperous and academically successful /middle class areas. Meanwhile in poorer areas where teaching is more challenging schools are left oversubscribed and crying out for more resources. It’s not just unfair it’s a shocking waste of resources and a recipe for chaos. These services need strategic planning which can only sensibly by done by local (not central) government who can best judge what local services are needed. I would add that overall the free schools this policy has spawned actually achieve lower standards than established state schools- again another waste of resources.

Shockingly, despite often performing such a poor service, many individuals in charge of these privateering companies have been able to pay themselves extortionate earnings at the public’s expense. Just one example is Emma Harrison, boss of A4e, a “welfare to work” company favoured by New Labour who in 2010 paid herself a dividend of £8.6 million- all earned from public contracts. (Nice work if you can get it- shame they had such an “abysmal” record of getting the unemployed into work!)

Worse than that, the privatisation of many of our public services also provides a very large opportunity for defrauding the public purse. Witness, for example the fiascos over the tagging of offenders in the community and the Perry Beaches Academy Trust . Serco and G4S between them overcharged the taxpayer nearly £200 million for electronically monitoring offenders who were either back in prison, overseas or even dead. Meanwhile the Perry Beeches academy trust chain, previously praised by David Cameron, last year had to be stripped of all its schools, following “financial shortcomings”. This included substantial “third-party payments” for contracts it gave to businesses belonging to their own chief executive.

Perhaps the starkest illustration of how nationalised services can often do a better more efficient job came from the Olympics security fracas. In 2011 G4S won a contract worth many tens of millions as the official security provider for London 2012. However due to its incompetence it was unable to provide enough security staff to do the job. As a result, a nationalised service- the British Army- had to step in with thousands of troops to plug the security gap.

Incredibly, whilst our government has flogged off its own stake in much of our public services, it has been perfectly happy to see foreign governments buying into and controlling many of them. For example, three quarters of our private rail companies are now partly or fully owned by foreign governments! It is a similar story with many of our energy and water companies.

What is even more shocking is the identity of some of those benefiting from the privateering of our public services. Many Conservative and New Labour politicians have acquired financial interests in these companies. This is especially the case with the growing market in private health companies running NHS service contracts now worth billions each year. For example, the former Conservative Health Secretary Andrew Lansley now earns many £10,000s each year from acting as a consultant for several such private companies.

It was the supposed loss of control of our country to the EU that was decisive in the Brexit vote.  Yet the biggest loss of control we’ve suffered over last nearly 40 years is noyt to the EU, but the huge sell off of our state assets to the rich individuals and corporations and even foreign governments. And the evidence suggests in many cases they run them less efficiently than a public provider. At the same time they leach off billions of pounds of our money in profits from which they reward themselves handsomely (even while often providing often poor levels of service). If we don’t like the way a government or council runs public services we can kick them out but there is nothing we can do when they are owned and run privately.

Very few now would suggest that the state should run everything. That argument was lost by the 1980s as we saw the disastrous failed experiment of communism, epitomised in the collapse of the Berlin wall. For the state to try to control everything just doesn’t work. It leads to terrible inefficiencies, abuses of power from those in charge of the state levers that causes its own unfair inequalities and suppression of freedom.  However, to leave the “market” to run everything without proper state control leads to an equal and opposite failure. To follow the free market in all things is to worship a false blind god who cannot see where it takes us. The free market therefore needs to be managed and regulated to ensure it doesn’t lead us into ditches or off cliffs- as was illustrated so clearly in the banking crisis just over 10 years ago. And there are some areas of life where we do actually need state ownership and control to ensure that basic services and resources are properly planned, fairly shared fairly and efficiently managed. To leave everything to the market is a recipe for chaos, an inefficient use of resources and the accumulation of too much power and wealth in the hands of a few at the expense of the many. However, this is very much the direction this country has been heading in for the past nearly 40 years. We need to change course to take us back to a more mixed economy, which our country enjoyed in the 1950s and 60s, a path followed still by many other successful Northern European countries. The threat of enslavement by Communism fell with the Berlin wall. However, since then we have allowed too much of this country to be enslaved by another false god- the “free market”- a religion that has too often served the interests of the rich few rather than the many. It’s time to tear down the temples of that false religion and build something better, that works in the interests of everyone and better serves Jesus’s Kingdom values of looking after each other and ensuring everyone has enough.

Unmasking the myths- Tory myth 1- Labour crashed the economy and it's only safe in our hands

One of the most successful political myths ever is that the previous Labour government's incompetence caused our economy to crash in 2008 . Typical Labour just couldn’t help themselves. They just spent and borrowed too much so that they “maxed out the credit card", leading to the credit crunch. This is what millions still believe. However, it’s simply untrue. A lie is a lie no matter how many people genuinely believe it. It was excessive private debt not public debt which caused the crash. As Sir Nicholas Macpherson, the chief civil servant in the Treasury said in 2015, Labour spending and borrowing had nothing to do with the cause of the crash. Instead “The 2008 crisis was a banking crisis pure and simple. Excessive risk had built up in the system; the regulators had failed to appreciate the scale of the risk or address it.”


This article examines the actual evidence behind the economic reputations of Labour and Conservatives in government. This evidence would shock many, because the truth is so far from what most of us have been led to believe. For those without the time to read the whole article, I'll sum up here what the actual evidence shows:

• The economic crisis was caused by excessive risk-taking by (mainly) US banks. It had nothing at all to do with the Labour’s government borrowing.                              
• The last Labour government might be criticised forfailing to regulate our banks more. However, at the time the Tories were calling for our banks to be regulated less!
• Labour did what had to be done to rescue our banks and save the country from economic disaster.
• This inevitably increased our national debt (but still well below the debt spikes seen in the world wars).
• The country has always had a national debt since 1692 and it always will.
• However, the last Labour government, like all Labour government before it, borrowed less than Conservative ones, ran up fewer and smaller annual budget deficits and produced more surpluses.
•  Just before the crash in 2007 our national debt was at only 36% of our national income- less than the 40% national debt Labour inherited from the Tories in 1997 and below average debt levels of the last 300 years. The annual deficit was then at a tiny 0.6% of income and falling.
• Labour governments on average, including the last one, have brought about more economic growth and better employment levels than conservative ones.
• Seven years of Conservative-led government have seen our national income per head/productivity and wage growth all falling badly compared to most of our competitors.
• The current Conservative manifesto in contrast to the Labour gives no costings for their spending plans and tax cuts and has no real economic plan to revitalize our stagnating economy. 
• The Conservatives current plans only confirms that as per their record in government that the Tories are actually the ones who cannot be trusted to manage the nation’s money and economy.

The Economic Crash was caused by excessive risk-taking by US banks. It had nothing at all to do with UK government borrowing

If you want to understand what actually led to the economic crash, the banker’s bail out and the recession and austerity that followed I recommend watching the excellent film “The Big Short”. 

The origins of the crash weren’t even in this country, but in the USA. It was all caused by casino-esque risk taking by bankers in the sub-prime mortgage fiasco. They lent too much mortgage money to individuals without the means to pay back. They then commoditising those transactions into bundles of loans which were bought and sold. Of course, given the international nature of financial services our own bankers got caught up in the risk. As we had the second largest financial services industry after the USA our banks were more exposed than most. Gordon Brown’s government had to act decisively to prevent our whole financial system falling apart and the untold suffering that would cause to millions of savers and borrowers. They had no option but to bail out the banks- an extremely costly endeavour. It was a huge financial disaster resulting from the banks’ excessive risk-taking that very few had detected and predicted, even within the banking industry (as the film illustrates). If there was any failure of government it was the failure to monitor and regulate more tightly financial services. That was primarily a failure of US government where the problem originated- and note that was a right wing Republican government under George Bush! How far Britain could have insulated itself by tighter regulation is debatable. However, what is not debatable is that the Conservatives would not have done any better. We know that because in 2007 at the very time when the crisis was about to hit rather than suggesting tighter regulation of our financial services they were demanding less regulation! Effectively they were calling for petrol to be poured on the flames of the fire! In a 2007 Conservative party report, endorsed by David Cameron- “Freeing Britain to compete"  said:

“We recommend deregulating venture capital fund raising, and investment for professional investors………A Conservative government should relax banking regulation, allowing a new breed of venture/micro-credit institutions…………….

We see no need to continue to regulate the provision of mortgage finance, as it is the lending institutions rather than the client taking the risk……”

The last Labour government (and the ones before it) borrowed less than Conservative one

And so what about that Labour spending and borrowing? As hard as it may be to believe, the evidence from Treasury figures show that as a proportion of GDP, i.e. national income, during its 13 years the last Labour governments spent and borrowed less than Conservative governments in the previous 18 years. They also ran up fewer current account deficits and more surpluses. And this fiscal prudence wasn’t just unique to New Labour. Overall all Labour governments since the war on average have always borrowed less than Conservative governments and have always repaid debt more often than the Conservative ones. The picture is more mixed when it comes to public spending. Sometimes Conservative governments have spent a greater percentage of GDP and sometimes Labour governments have. However, overall Conservative governments have actually spent slightly more of our income. I know all of this is contrary to what most of us have grown up to believe, but any objective analysis of the facts shows this to be true.

The National Debt

Some people get very worried over the size of our national debt. They really shouldn’t! Above is a graph of the UK’s national debt since 1692. Do you notice anything? Over the past 300 years the country has always been in debt to the tune of at least 20% of our annual income- even when Britain was at the height of its empire. In fact, the empire was built on a funding of national debt. Mostly our national debt has been at or above 50% of our annual income. At real crisis times that debt has shot up to 150, 200 or even 250% of income- like during the Napoleonic wars (the first major peak above), the first and second world wars (the second and third big peaks). After those crisis peaks the debt has then gradually been brought down again, as can be more clearly seen from the graph below.

When people compare our national debt to a credit card it’s a completely false analogy. The best

domestic analogy is a mortgage, but a mortgage to an immortal man. Even now our national debt is less than a year’s worth of our national income- at 89% or 0.9 times our annual income. Few of us would have concerns over paying a mortgage of a lot more than 0.9 x our annual income.Banks commonly lend up to 3 or 4 x a person’s annual income, i.e. 300 or 400%. The thing with a mortgage is that since individually we won’t live forever we do have to pay it off after 25 years. But countries aren’t people so they’re not expected to die. Therefore, it isn’t a problem that as a country we continue to carry a debt, as long as we can keep paying up the interest on the debt. The reality is that in modern times we have always had a national debt and we always will. No one has any intention to ever pay it off. It just isn’t the sort of thing you pay off. It’s public debt that keeps economies moving. It always has and it always will. (In fact the UK is not just a debtor it’s a global creditor to others and is actually owed rather more than it owes.).Of course, if we let the debt get too big that’s not a good thing as this will increase the interest payments on the debt and can cause a loss of confidence in the country’s ability to pay. However, we are a long way from that point. Many developed countries carry a rather higher national debt than we do. Currently Japan’s national debt is at 250% of GDP and the USA’s at 104%. In fact some of the countries with the lowest national debts are some of the poorest eg Afghanistan at 6.6% and Equitorial Guineau at 6.4%.

 In 2007 before the Global Financial Crisis our national debt was at a very moderate 36%- actually below its historic average of the last 300 years, and less than the 40% the Labour had inherited from the Tories. It is therefore simply untrue that Labour had built up an excessive debt before the crisis. And, as we’ve seen, that crisis had nothing to do with our national debt anyway. Of course, once the crisis happened the Labour government had no alternative but to pump into many billions to a rescue fund for our banks to prevent our economy sinking. That is why our national debt surged after the crisis, but it still reached nothing like the peaks following the world wars. Under Labour its post crisis peak in 2010 was about 60%. Under the Coalition/Tory governments however the debt has continued to rise and now stands at 89%. Unfortunately their ham-fisted austerity policies have proved to be self-defeating. It has put a break on economic growth and therefore held back our national income which should have helped us get the debt under control sooner.

The annual deficit

The Tories also got us all very worried about “the deficit” and how Labour can’t be trusted with that either. In 2010 they pledged to eliminate the deficit by 2015, which they failed to. They then moved their goalposts and planned to get rid of it by 2020.. They’ve now admitted they will also fail to do that and have moved their goal posts a second time to 2025! So what is “the deficit”? The current bu dget deficit is the annual difference between the government’s day to day spending and its income (principally from tax receipts). This covers things like running our NHS, police, schools and paying pensions & benefits. It excludes investment in capital projects, e.g. new roads and new schools built. In 2017 the current budget deficit stands at approx. £14 billion. That is just under 1% of GDP and so in itself not a significant problem when the interest rates we must pay on any increase in debt are so low. George Osborne really shouldn’t have got so stressed about it!  Overall it is better to keep the annual current deficit low or in a slight surplus, to avoid unnecessarily adding to the national debt . But can Labour be trusted to manage our deficit? What is their actual record in government like compared to the Tories? Well, have a look at the chart below.

We can see that for 30 years after the war all governments- Labour and Conservative- ran current surpluses as they both strove to bring down the high national debt built up in war. It was the Labour governments of Attlee and Wilson who achieved highest surpluses at 6.3% (1950) and 7.6% (1970). The lowest surplus of 0.9% was under the MacMillan conservative government (1961)

Then for 15 years (1975 to 1989) successive Labour and (mostly) Conservative governments ran fairly small deficits, the highest being at 2.2% under Mrs Thatcher’s Conservative government in 1981. Then in 1989 under Mrs Thatcher we briefly went into surplus again (at 1.9% of GDP). However, under John Major’s conservative governments we soon went into deficit again, particularly after the ERM crisis/recession. Under him the deficit peaked at 5.7% in 1994 before gradually declining. It was then the New Labour government that brought it into surplus in the late 90s/early 00s, maxing out at a 2.3% surplus in 2001. Labour then ran small deficits but at historically fairly low levels of less than 2%. By 2007 they had brought this down to about £10 billion- 0.6% of GDP (lower than currently at just under 1%).

Following the Global Financial Crisis of 2008 and the unavoidable bankers’ bailout the deficit temporarily ballooned again in 2009. In 2010 it peaking at 6.9% (£50 billion). Since then it has been gradually reduced to £14 billion/just under 1% of GDP. However, it is still higher than it was under New Labour before the Crisis.

So can Labour be trusted to manage the nation’s money?Based on their record-yes!

Yes absolutely- based on the historic record. The overall record shows that, contrary to public misperception, Labour governments, including the last Labour governments, have actually borrowed less and run lower current account deficits and more surpluses than Conservative governments. Furthermore, before the bankers caused the GFC and recession public debt was at historically relatively low figures and we had an unremarkably modest and declining small current account deficit. The Labour party would actually have a very strong case for libel for being falsely accused of having been financially reckless so as to have caused or contributed to the crash. It is so very far from the truth that you have to say it’s not merely misleading spin but a bare-faced lie.

The more important economic issues are employment and economic activity. Here too Labour have a better record

Whilst Labour’s record on managing the nation’s debt is actually better than the Conservative, there are in fact rather more important indications of economic performance. As the great economist Maynard Keynes said, it’s the state of employment and the growth or decline in national income (economic growth) that really matter. Look after employment and improve national income and the budget should look after itself.

During the last labour governments up to the Crisis the UK enjoyed a period of 10 years of steady economic growth- the longest uninterrupted period of growth in 200 years. The UK’s growth of GDP per capita – 1.42% a year between 1997 and 2010 – was better than in any of the other “G6” countries: Germany (1.26%), the US (1.22%), France (1.04%), Japan (0.52%) and Italy (0.22%).  Under New Labour UK’s strong productivity performance relative to other countries was a continuation of the trends during the period of Conservative governments from 1979. By 2007, the UK still lagged behind the US , but the gap had closed to 33%. In fact, the UK had a faster catch-up of GDP per head with the US under Labour than under the Conservatives.

Since 2010 our GDP per head (the only way to sensibly measure real income) has flatlined or fallen below most of our competitors and relative to them. Our economic productivity has plummeted, well below the likes of France and Germany. In terms of their economic output average French and German workers do more in four days than we do in five. Incredibly, despite her anti-immigration rhetoric, the only thing that stops our gross GDP from looking too bad is our net immigration. Immigrant workers have usually been more productive and their numbers have increased the population so that our gross total income has increased even as our income per head has fallen in real terms. Their numbers make the fact that our economic growth has flatlined and productivity fallen (see eg Angry Voice “How The Tories used mass migration to fake a recovery”)

In depth research by the likes of the London School of Economics has found that many of the last Labour governments’ policies were beneficial for economic growth, and that this growth was not all an unsustainable ‘bubble’, (as some suggest) but was based on some real productivity increases fed by growth in new skills and technology. Where they did fall down is where the Tories (according to their own stated policies) would have done even worse- financial regulation.

As for unemployment, since 1970, the best average annual unemployment rate was achieved by the Heath Conservative government of 1970/4 with 3.4%, and by far the worst under the 1979/97 Conservative governments, with an average annual rate of 9.3%, and exceeding 10% for 6 full years.  The 1974/9 Labour government had an average rate of 4.9%, and the 1997-2010 government 5.6%.  The 2010-15 Coalition government’s average rate was 7.6%. Overall, therefore Labour governments have had a better record on employment than Conservative governments.

However, when considering the state of employment today we need to look not just at the number of unemployed/employed but the nature of that employment and what it pays. Since 2010 especially we are now in an age of casualised, fragmented and often partial employment. Of course earnings took a a hammering following the crash, but under Conservative led governments since 2010 in real terms they have continued to fall.  We have seen real wages decline by about 8% in real terms since the crisis, briefly mending and now in fact declining again. This contrasts with most of our competitors who have actually turned things around to produce real wage growth. Between 2007 and 2015 our UK wage growth declined by 10% in real terms, putting us right at the bottom of the league for pay growth of developed nations, equal with Greece. On average OECD countries experienced wage growth of 6.7%, with Germany 14% and France at 11%.

The Future- an economic plan to revitalize the economy- Labour have one. The Tories don’t

Interest rates are currently at a historic low point. Meanwhile the country’s infrastructure is crying out for investment and our economic growth is flatling. At such a time it makes far more economic sense to increase the debt to invest The economic growth resulting from such investment potentially should earn us a lot more than the extra interest we will pay. (This after all was how Britain grew its empire). This is why most economists welcome Labour’s £250 billion national transformation fund. And if we get the bad Brexit deal many fear such an economic shot in the arm will be essential to prevent a severe economic recession. The Conservatives present no such plan in their own manifesto.

Conclusion- it’s the Tories not Labour who can’t be trusted with our economy

The myth is that Labour are financially reckless, overspent beyond our means which led to the 2008 crash and the austerity and low wage economy we are all suffering from. Meanwhile only the Conservatives know how to manage prudently the nations’ finances to bring about the economic growth that will benefit us all. The truth is very different. As the above analysis shows, Labour governments, including the New Labour governments, have actually more carefully managed the nation’s finances than Conservative governments, borrowing less than them. Recent labour governments have also overall achieved better real economic growth and employment rates than recent Conservative governments. The Global Financial Crisis which led to recession and increased national debt was not in any way caused by the Labour government’s management of the nations’ money. If there was any fault by them it was in failing to more tightly regulate our banks. However, the Conservatives would only have regulated them less!

The austerity economics of the recent Conservative governments have been largely self-defeating and have not helped prevent our national debt rising further. They have led to the Conservatives twice failing their own targets for wiping out the annual budget deficit. Their approach initially took the economy into recession and then led to only weak growth and the longest period of decline in real wages for over 50 years.

The reality is the Conservatives’ reputation for economic competence is completely unjustified. And their current manifesto certainly does nothing to change that:

•       Unlike Labour they give no detailed costings to explain how they would pay for any of their manifesto spending and tax cutting commitment. This of course is just what you’d expect from a Conservative party which has always been less careful with our money than Labour
•       Most economists agree that their stated approach to Brexit if followed would be economically disastrous as there will be no free trade deal without accepting freedom of movement which they have made their red line.
•       Most economists also agree that their stated approach to immigration to bring it down to 10,000s would be similarly economically disastrous as national demographics mean we need net migration of at least 200,000 for the foreseeable future.
•       Unlike Labour they have no plan to reinvest and revitalize our economy which it will badly need after Brexit.

For further details of the research behind the above analysis see e.g. LSE’s “Labour’s Social Policy Record: Policy, Spending and Outcomes 1997-2010”, Tax Research UK website e.g. the article “The Conservatives Have been the biggest borrowers after the last 70 years” and www.ukpublicspending.co.uk, Global Future Report on UK immigration needs Feb 2017 and "Angry Voice".