Lies, damned lies and MP Barwell’s economic statistics

Tory Poster

The Tories’ election poster with false claims about the economy on a private road to nowhere

ANDREW FISHER highlights factual inexactitudes in the spin of a local MP

According to Croydon Central MP Gavin Barwell, we should all be worshipping at the altar of George Osborne: the economy is on the up.

With spin straight out of Conservative Central Office, Gavin no doubt gets a gold star for peddling the party line, but any honest analysis would cover his work on his MP’s blog with red ink.

Gavin starts on dodgy ground by claiming that the UK is “currently the fastest-growing [sic] major economy in the world”. This is untrue.

The UK economy grew at an estimated 2.6 per cent in 2014. The world’s second-largest economy, China, grew at 7.5 per cent and India (not far behind the UK now) grew at 5.4 per cent. The United States (the world’s largest economy) grew at twice the rate of Britain in the last quarter, and has outpaced the UK over the last year, too.

While honesty matters for most voters, international comparisons of economic growth matter little. If the UK is doing OK, then it doesn’t much matter if somewhere else is doing marginally better, and if Britain is doing badly, it doesn’t much matter if somewhere else is doing marginally worse.

So what is really happening to the UK economy? We do have a recovery, but its underpinnings are very insecure. Like the man who built his house on sand, if the rain comes, Osborne’s recovery will be washed away.

According to Bank of England figures, unsecured consumer credit is growing at its fastest rate since 2005. This is recognised by the independent Office for Budget Responsibility which predicts personal debt levels will rise beyond those that existed just prior to the crash.

MP Gavin Barwell: has been caught out telling porkies about the economy

MP Barwell (lef): caught telling porkies about the economy

If more people are in work, as Osborne and Barwell claim, then surely they’re better off and don’t need to go into debt?

But more people are going further into debt because average household incomes have fallen by 10 per cent under this Government, once you allow for inflation.

The new jobs that have been created have been overwhelmingly low-paid, many are self-employed, or zero hours or temporary. The jobs market now has a lower proportion of full-time employees than before the crash (something I analysed in April and again last month).

In household terms, the recovery is in fact only for the richest 20per cent, whose disposable incomes rose by £940 in the last year. For the rest of us, our disposable income fell by an average of £250, with a fall of £381 for the poorest 20 per cent.

Many of the full-time jobs that have been created do not give people enough hours or pay to provide the security to build solid financial foundations – worsened by coinciding with a period when energy costs, housing costs and rail fares have shot up without any government intervention. For example, the TfL fare rise introduced on commuter routes out of Croydon yesterday mean that fares have risen 20 per cent since 2010.

So when Gavin says more people are able to provide for themselves and their families, he is wrong: in-work poverty is at a record high, meaning a larger number of working people have to receive tax credits and housing benefit to make ends meet. We are all subsidising low-paying employers.

Some of the false claims made by MP Gavin Barwell on his publicly funded website

Some of the false claims made by MP Gavin Barwell on his website

George Osborne promised to slash welfare spending by 10 per cent, but according to the Institute for Fiscal Studies, he has only managed to cut 2.5 per cent – mainly due to subsidising low-paying employers with tax credits and paying rising housing benefit to overcharging landlords.

Gavin also wants to take credit for low inflation – and a recent drop will certainly ease the strain on workers missing out on decent wage rises. However, falling inflation is due to the falling oil price, which is because, under instruction from the United States, the Saudis are keeping the oil price (as part of the new geopolitical Cold War against oil revenue-reliant Russia). So if living standards do improve in 2015, it’s no thanks to George Osborne.

The government is in the middle of a superficial upturn – a period which economists call a “dead cat bounce”. With apologies to my fellow animal lovers; the analogy reflects that after a sustained drop, even a dead cat will bounce. A bit.

The UK economy’s fundamentals remain very weak: economic growth is slowing, the trade deficit is the worst for 30 years, business investment is falling, manufacturing is sliding, and GDP per head remains below pre-crash levels.

Figures on the deficit from the Office for Budget Responsibility

Figures on the deficit from the Office for Budget Responsibility

And then there’s the deficit.

Osborne’s deficit reduction has ground to a virtual halt this year because the jobs being created are low-paid and not producing the tax revenues necessary to close the deficit.

In 2010, Osborne promised he would have eliminated the deficit by next year. Now he and cheerleaders like Barwell are telling us to rejoice because the deficit has been halved. Yet even that is questionable – most economists, and the editor of the Tory-supporting Spectator magazine, suggest that Osborne is presiding over two-thirds of the deficit he inherited.

As shown in the OBR table re-produced above, by the end of this financial year (2014-2015), the deficit should have been £71 billion, a little less than half of the £155billion Osborne inherited in 2010-2011. Far from eliminating the deficit, Osborne’s austerity programme has succeeded only in driving down living standards and racking-up ever higher debt (both government and personal debt).

The Conservatives began their election campaign yesterday with a much-derided poster claiming that we are on the road to recovery. The road pictured looks like the driveway of a stately home. Others have commented that it is a “road to nowhere”.

With a weak economy built on rising debt, rather than rising incomes, whoever enters No11 Downing Street after the General Election will do well to avoid a another recession within the next couple of years. One can only hope that the likes of fawning courtier Gavin, admiring emperor George’s new clothes, will no longer have any influence after May.

Coming to Croydon

  • Inside Croydon: Croydon’s only independent news source, based in the heart of the borough: 729,297 page views in 2014. If you have a news story about life in or around Croydon, a residents’ or business association or local event, please email us with full details at

About insidecroydon

News, views and analysis about the people of Croydon, their lives and political times in the diverse and most-populated borough in London. Based in Croydon and edited by Steven Downes. To contact us, please email
This entry was posted in 2015 General Election, Croydon Central, Gavin Barwell and tagged , , , , , . Bookmark the permalink.

2 Responses to Lies, damned lies and MP Barwell’s economic statistics

  1. Oh, come on now, be a little kinder to Gav.

    He is going to lose his seat and no one thinks he actually wrote any of this stuff himself or that he actually even read it.

    He is simply parroting and repeating the Central Office guff, the typical pre-election puff and spin of which we are going to hear nauseatingly more and more in the next five months. Its George Osborne who should be the focus of our ire and Andrew Fisher is 100% right to target the terminological inexactitude and insulting simplifications which underlie Tory presentation of the awful state in which this country actually finds itself today.

  2. It is too easy to get lost in all the numbers and the data. For Croydon we need to focus on the real basics, such as:
    1. What is happening to the key indicators of (a) education outcomes (b) investment in technology and capital. Those are the factors that are ultimately going to make our community better off.
    2. What is happening to the factors that maximise social welfare so that we can: (a) maximise our working days; (b) minimise ill-health/homelessness etc that undermines productivity and increases the cost caring for young and old dependents.

    On those factors Croydon does not look good:
    a. our education outcomes are far too low for a modern economy, we need to produce far more people with higher skill levels;
    b. investment is happening, but it needs to be much higher level particularly in industries that add real value, such as technology; and have the potential to create high value exports.
    c. Health care and housing in Croydon seem to be in crisis at worst or under extreme stress at best.

    Social welfare at street level feels horribly fragile, various factors have conspired to create economic and social insecurity for a large proportion of the population. Basic psychology tells us that if people are focused on surviving day to day they cannot maximise their learning or their productivity.
    We need to create a fairer society, not because it is a lovely sweet socialist ideal; but because it is a key element in increasing the wealth of our whole community.
    A properly functioning health service and decent housing for all are essential to a properly functioning economy; the idea that we have to cut basic front line services is dangerous. So I call on both political parties to focus on key factors that are going to make Croydon a fairer, healthier society where people have the skills and resources to support themselves.

Leave a Reply