CROYDON COMMENTARY: For ANDREW FISHER, the notion of a national economic recovery based on debt or a borough-wide regeneration based on retailing are equally flawed
“We inherited an economy reliant on banking, immigration and debt,” Croydon Conservatives told us at the Croydon North by-election in 2012. What the Conservative candidates standing in Croydon constituencies – Fairfield councillor Mohan Vidhi in North, Gavin Barwell in Central and Chris Philp in South -won’t be telling you during next year’s General Election campaign is that under their Tory Chancellor the economy is just as reliant on banking, immigration and debt.
Earlier this month I looked at the rise in net migration, despite the Tory pledge to reduce it – and how migrant workers are actually helping to balance the books, but even their efforts can’t counteract Chancellor Osborne’s damaging economic policies.
We have an economic recovery which is unique. This is the only economic “recovery” in history in which living standards are falling for most people, and tax revenues aren’t rising.
Without tax revenues increasing, the deficit won’t close and Osborne is borrowing more – resulting in government debt rising by more and for longer than he pledged. An economy based on debt.
Tony Blair once boasted that Britain has “the most flexible labour market in Europe”, meaning that we have the weakest employment and trade union rights in Europe. Since the recession, only 1 in 40 of the net new jobs has been a full-time employee, while many are part-time or self-employed. And average wages have collapsed, down 10 per cent since this government was elected.
This is why tax revenues are stagnant, despite the alleged “recovery” and rising employment. For households, this means more people are having to look elsewhere to make ends meet.
So while the government is not getting as much income from tax as it needs, the cost of tax credits and housing benefit is rising because people’s wages no longer pay the bills and the rent. So low pay is costing us all, as the taxpayer subsidises falling wages. Despite Osborne’s aim to slash around 10 per cent from the welfare bill, he’s only saved 2.5 per cent – largely because he hasn’t tackled low pay or high rents.
But more damagingly, many families are also having to rely on food banks. Low wages were given as the primary reason by 22 per cent of people using food banks. With bills and rents rising faster than wages, in 2014 – during an economic “recovery” – hundreds of thousands of workers are having to be given free food.
And even more damaging than that is rising personal debt. Unsecured debts are currently rising by £1 billion a month and Osborne’s “recovery” is based upon ever more consumer spending funded by debt. This is projected to rise above the level of personal debt that was a major component of the global financial crash of 2007-2008 that got us here in the first place.
If this seems a bit abstract, it affects Croydon’s future intensely.
The shared vision between both Tories and Labour for Croydon to become the retail capital of south London and its Surrey hinterland. The plans for a £1 billion redeveloped shopping centre are accompanied by grand proclamations about job creation and regeneration.
It is an outdated vision in which people shop in physical shops, whereas retail is increasingly moving online. It is a vision of a future in which shops employ lots of people, whereas increasingly they install self-service tills, in placed of paid staff, to drive down costs and compete with online retail.
The Croydon retail revolution is also dependent upon people having money to spend. With workers’ wages increasingly driven downwards, and unsustainable debt levels making another crash ever more likely, where will this extra spending come from?
Despite Croydon Tories’ election spin, George Osborne is determined to return us to the pre-crash economy. Yes, the one “reliant on banking, immigration and debt” as Croydon Conservatives put it.
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Coming to Croydon
- Croydon Philharmonic Christmas concert, St Matthew’s, Dec 16
- Spread Eagle’s Christmas Improv show, Dec 17
- David Lean Cinema, Northern Soul, Dec 18
- David Lean Cinema, Hitchcock’s To Catch A Thief, Dec 29
- David Lean Cinema, The Beat Beneath My Feet, Dec 30
- David Lean Cinema, The Hundred-Foot Journey, Jan 3
- David Lean Cinema, Mr Turner, Jan 8
- David Lean Cinema, Leviathan, Jan 13
- Norwood Society talk: Penge, the making of a suburb, Jan 15
- David Lean Cinema, The 78 Project Movie, Jan 15
- David Lean Cinema, Hannah Arendt, Jan 20
- David Lean Cinema, The Imitation Game, Jan 22
- South Croydon business breakfast, Jan 24
- David Lean Cinema, Night Will Fall, Jan 27 (Holocaust Memorial Day)
- David Lean Cinema, Kon-Tiki, Jan 29
- Norwood Society talk: Crystal Palace and Dulwich, Feb 19
- Norwood Society talk: Charlies Dickens in Norwood, Mar 19
- Norwood Society: Balloons and airships at Crystal Palace, Apr 16
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