CROYDON COMMENTARY: Even by the economic criteria laid out by the Tories in Croydon, led by Gavin Barwell, the past five years have been a failure, writes ANDREW FISHER
“We inherited an economy reliant on banking, immigration and debt,” declared Croydon Conservatives during the Croydon North by-election in 2012. Three years on, and after five years in power, let’s take their claim at face value and evaluate how the Tories have they done in changing that.
George Osborne, the Tory Chancellor, heralded his 2012 Budget as “the march of the makers”, saying it would rebalance the economy away from financial services and the service sector more generally.
But while the services sector has recovered that ground, manufacturing, production and construction sectors all remain smaller than in 2008. The manufacturing sector is around 5 per cent smaller than in 2008 – so much for ” the march of the makers”.
The financial services sector recorded its fastest quarter of growth since 1996 in the last three months of 2014, with business volumes and profits increasing, according to the CBI.
House of Commons Library data shows the financial services sector making a larger contribution to the UK economy in 2014 than in 2008. The UK finance sector remains larger than that in the United States, Germany or Japan (all with larger overall economies than the UK).
So there’s been no shift away from the banking sector, and “the march of the makers” has been more of a retreat.
In the words of the Financial Times, “progress towards reinventing Britain as a productive, exporting powerhouse has been scant”.
Meanwhile, the banking scandals – from Libor to currency rigging to mis-selling insurance to small businesses – have continued unabated, alongside the institutionalised tax avoidance, unwarranted bonuses and gratuitous salary hikes.
Croydon Central’s Gavin Barwell – who played a key role in that Croydon North by-election campaign – asserted during that campaign in 2012 that more people in Croydon North would have jobs if it wasn’t for immigration policy under the last Labour government.
How have the Conservatives done on immigration? They pledged to reduce net migration (the number of people immigrating, minus the number emigrating) to tens of thousands. In the year to September 2014, net migration to the UK was 298,000, which represents an increase of more than 50,000 from the last year that Labour was in office.
So if Labour’s economy with 244,000 net migrants was “reliant on immigration”, then surely the Conservative economy with 298,000 must be even more so?
Personally, I was relaxed about the level of immigration under the last Labour government and am likewise about the higher level under this government – but then I don’t need or want to outflank UKIP like the Conservative Party or their Croydon Central representative.
In 2010, the Conservative-led government inherited a debt bloated by the banking crash, but still lower than the G7 average.
Recognising that the debt wouldn’t be dealt with overnight, Chancellor George Osborne promised in his 2010 Budget to reduce the debt to 67.4 per cent of GDP by 2015.
Last month, Osborne’s 2015 Budget revealed that the UK debt today is 80.2 per cent of GDP.
Consumer debt is rising again, with unsecured borrowing increasing by £20 billion, a 9 per cent increase on the year before.
The Office for Budget Responsibility, which is independent of government, forecasts that under the ConDem coalition government’s plans, personal debt will be higher by 2018-2019 than it was at the time of the crash.
And according to debt management firm Payplan, Croydon is the “debt-worry capital of the UK”.
So by their own self-identified criteria, the Conservative-led government’s economy has become more, not less, reliant on banking, immigration and debt.
But if all that seems a bit abstract, just look how the economy is failing people – and starkly so in Croydon. We have the eighth highest level of possession order rate (when landlords are granted right to evict tenants) of all English local authorities (and the second highest by number).
Across the UK, homelessness is up 62 per cent. In London, it’s even worse.
Nearly 3,000 people in Croydon were initially affected by the Bedroom Tax, and hundreds of families fell foul of the benefit cap. Around 1 in 20 of all Croydon residents are on the council housing waiting list. Last year it was found that Croydon had among the highest number of children living in temporary B&B accommodation.
Unemployment in Croydon remains higher than in most other London boroughs, and Croydon is also the borough with the lowest pay in south London. The cost of living crisis endures.
The Conservatives, in Croydon and across the country, have done something worse than fail against their own criteria. They have failed millions of people.
- Croydon resident Andrew Fisher is the co-ordinator of the Left Economics Advisory Panel – a network of left economists and activists. He tweets at @AndrewFisher79.
- Read previous columns by Andrew Fisher here
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