The global financial crisis of 2008 has left Britain facing one of the most difficult periods in its economic history, as characterised by falling real wages and deepening poverty amongst the poorest members of our society. The actions taken by the Coalition Government since taking office in 2010 have arguably done little to tackle the social consequences of the economic downturn and have, in fact, exacerbated these problems, casting doubts on the validity of the government’s economic strategy as a whole.
Business groups have expressed a lack of confidence in the Coalition’s shambolic handling of the economy during much of its time in office. In November 2012, the Recruitment and Employment Confederation awarded the government 5 out of 10 points in its record on creating jobs and opportunities, noting that the government’s decision to cut back on work experience in schools and careers advice could reduce the prospects of young people entering the workforce, while a senior Conservative politician in April 2013 accused George Osborne of caution and timidity by not taking bolder measures in restoring the country’s economic health. The Coalition’s economic strategy also came under fire a year ago from the IMF, which drew attention to the country’s lacklustre economic performance, with output 3% less than it was in 2008.
Although in recent times the economy has shown signs of improvement, with higher growth and falling levels of unemployment (achievements that the Liberal Democrats in government can be proud of), earnings remain below the rate of inflation while living standards have, according to one report, “fallen across the board” since 2010. In addition, average real wages have fallen to the point that they are now at the same level that they reached back in 2003.
As a resident of Brighton and Hove, I have seen at first hand the impact that the recession has had on the lives of ordinary people. I see it in the boarded up shops along London Road and Lewes Road, once thriving businesses that catered for the needs of the local community, and I hear it from people who have cut back on their spending as a result of below-inflation pay rises over the past few years. As a result of the Coalition’s social and economic policy decisions, charities and non-profit associations here in Brighton and Hove have come under increasing pressure to provide support to vulnerable members of the community. In 2012, the homeless charity Off The Fence was handing out up to 60% more sleeping bags a month than it did the previous year, while FareShare Brighton and Hove reported that 55% of agencies had an increase in the number of clients using their services, up from 27% in 2011. In February 2013, it was estimated that as a result of welfare cuts, the economic downturn, and the stunted jobs market, an additional 8,000 children in Sussex fell into poverty during the past year. This year, a submission by Brighton & Hove Food Partnership to the national Parliamentary Enquiry into food poverty and hunger suggested that the numbers experiencing food poverty has continued to rise in Brighton and Hove, despite improvements in the economy.
Such findings provide further indictments of the Coalition’s social and economic policies.
Based on the evidence, there is, therefore, a strong case for a new economic strategy.
* Vittorio Trevitt has written for Respublica, Democratic Audit, Catch 21, Fabian Society and Compass. He has also done voluntary work for the Labour Party, including campaigning on behalf of local candidates, carrying out research for speeches, and writing articles to raise awareness of important social issues. He believes in British socialists and liberals working together to achieve progressive ends, united by their commitment to equality, freedom, and justice.
Follow @libdemvoice.org on Bluesky
Like us on Facebook
Subscribe to our feed
Sign-up for our daily email digest
Weekly Road Report - West End Ward #dundeewestend
Care homes under threat after Labour policy change
Three less conventional ways of looking at who supports Reform - The Week in Polls
Layla Moran on Gaza: "Starvation shouldn't be a weapon of war"
Daniel Stylianou
Simon R
John Waller
Mick Taylor
Tristan Ward
44 Comments
Why is LDV publishing articles on how wicked Lib Dems are from a Labour Party member and calling it ‘independent’?
“I write for various British organisations, including the Fabian Society, Compass, and Catch21, and do voluntary work on behalf of the British Labour Party. My involvement has included campaigning on behalf of local candidates,”
http://www.chifley.org.au/author/vittorio-trevitt/
@Simon McGrath
Vittorio Trevitt does not seem to be calling Lib Dems wicked, and he points to something that “Lib Dems in government can be proud of”. And surely Lib Dems would agree that there is “a strong case for a new economic strategy” since the Coalition’s economic strategy is predominantly (and inevitably) a Tory one not a Lib Dem one. Or is it?
Simon – Maybe we should spend more time debating the articles themselves rather than criticising someone simply because they may be a member of another party? I think the point about earnings is something the coalition has really failed to face up to.
This is the first economic analysis on Lib Dem Voice that I have completely agreed with. But I’m a member of the Labour Party!
“Maybe we should spend more time debating the articles themselves”
How much time has any of us got? It would take all day to tease apart all the multiple reasons why this piece is in many ways misguided, inaccurate and distorted. In fact, other than simply slamming government policy it offers no real alternatives or ideas as to how they would be funded, funnily enough just like the Labour party itself.
@ Mack (a member of the Labour party)
Why do you spend so much time making hostile posts on the site of another party, then? There’s a term for that kind of behaviour, but I’m not going to use it out of politeness.
I love it! ‘Based on the evidence, there is, therefore, a strong case for a new economic strategy.’
Any suggestions what this new economic strategy would be? We are economically literate in the Lib Dems.
@ Simon McGrath
Nevertheless – the issues raised in the article do effect all political parties operating in the UK.
The advent of a free global market was bound to suppress wages for those with the most common skills – shifting jobs that can be done in poorer nations from the richer countries where pay rates are higher. This is a continuing process that cannot be checked by national governments and will be made worse if The Transatlantic Trade and Investment Partnership (TTIP) is agreed to – as looks to be the case.
Osborne declared that more austerity measures will be implemented if the Tories win the GE in his conference speech today. He said these will be needed for two years and, as a result, will bring the nation into surplus from deficit – so that our huge national debt [which is costing £1 bn a week to service] can start to be paid off.
It seems to me that – because of the free global market – Osborne’s promise to reduce the deficit to zero within two years is as likely to happen as his promise to achieve this by the time of the 2015 election made at the beginning of his tenure of the post of Chancellor of the Exchequer.
Unless there are some fundamental changes to the structure for global trade – I am afraid the rich are going to continue to get far richer and the poor far poorer. This will of course be compounded as artificial intelligence [AI] is developed to its full potential.
I’m looking forward to writing a piece on LabourList about how it’s time Labour came up with some of its own ideas on the economy rather than simply trying to steal Lib Dem ones. Plus another about all the damage the economy suffered under its years of economic mismanagement.
I think that would go down really well, don’t you?
@Simon McGrath: “Why is LDV publishing articles on how wicked Lib Dems are from a Labour Party member and calling it ‘independent’?”
I thought the article was quite reasonable. I didn’t see anything “wicked” about the Liberal Democrats in the article. Besides, I thought one of the selling points of your party was that they were open to listening to and working with members of other parties – or does that only apply to the Tories these days?
Then again, your party has become increasingly hostile to anyone who is not in your party or not in the Tory party for the past 4 or so years. Between people such as yourself and @RC, I get the feeling you’d prefer a closed echo chamber where you can all agree with one another without those pesky people from other non right-wing parties with differing views.
I know let’s swing to the left as they did in France, now look at their situation. Nothing in this world is ever 100% right, in any overall policy there will be mistakes and anomalies and this has probably happened over the past four years as it has with previous Labour governments and if heaven forbid they win the next election, will happen again. What is important is the overall direction and level of progress, the macro against the micro. I can winge about this and winge about that, yeah but overall things are now BETTER than they were 4 years ago, when we only have to remember those magic words, “There is no money left”
Judging from their conference Labour really do not know which way to go, they make some right economic noises but many more not so right. I am afraid the Labour party still has not got real, not akin to many Liberal Democrats who refuse to face the reality, the electoral mess, our party is in.
@Stephen Campbell
The point is, he didn’t say what any alternative policies might be and how they might be funded. He simply slammed the Coalition’s record in power in an artless and hackneyed party-political diatribe.
That is not the kind of “contribution” worth engaging with, is it?
The fallout from the Asian financial crisis in 1997 left many impoverised in Thailand. It took time for a full economic recovery. Expectations changed .
Is Brighton a basket case? That’s not the impression I got on my visits.It’s more vibrant than Hastings.
Vittorio does not put any alternative policies forwards but by implication he is suggesting that it would be better to have higher pay for those in work and consequently higher unemployment.
Note: The IMF subsequently had to admit that its criticisms of the UK economic strategy were wrong.
As a result of globalisation, trade is much more free across the world and the UK has to compete with China, India, Brazil, and Indonesia amongst others. As a result we can expect the living standards of those countries to improve as they take business from us because they are better educated and demand lower pay.
Of course the corollary is that we should not expect that our standard of living in the Uk will grow the way it has in the past – which has been partly at the expense of the people in other countries. Overall this is to the benefit of the greatest number of poor people in the world, which I would expect Vittorio to welcome.
So which part of the article do you disagree with or dispute, @RC? Do you dispute the statistics about homelessness and poverty in Brighton and Hove? Do you not agree with the statistics about real wages being stagnant and living standards (especially for the poorest) falling? Do you disagree with the Recruitment and Employment Confederation? And if it was such a horrible anti-LD diatribe why does the author give you credit for falling unemployment by saying “achievements that the Liberal Democrats in government can be proud of”? There is plenty to debate in this article without rushing to attack the messenger and his political persuasion.
I still maintain my position that this party through deed and word is hostile to people on the left of the political spectrum (and actually reacts with paranoia to people from the ex-Liberal Democrat voting left, such as myself post here). People such as myself used to be your largest source of votes. Your attitudes are doing nothing to win us back. And, no, I’m not a Labour Party member.
David Evershed
In those countries you mention they certainly get less pay whether they are better educated is another question.
Ten years ago the points raised in this article would almost certainly have been supported by most LibDems. Now we have people saying it shouldn’t even be published or discussed on LDV.
“YouGov poll for the Sunday Times has toplines of CON 31%, LAB 36%, LDEM 6%, UKIP 15%, GRN 6%.”
I think the polls are giving a fair indication of what the voters think of this change in attitude.
This is toy town economics.
Under Labour our national output fell by six to seven per cent and the government was borrowing far more than it spent.
For take home wages to start rising again two things have to happen. First the damage to the economy has to be fixed. Secondly the gap between spending and taxes has to be drastically reduced. The coalition government has achieved the first of these but the second of these is still work in progress. Sadly only when the public finances have been fixed can we expect take home wages to grow.
For Labour’s contribution to all this first see Ed Miliband’s speech to conference. The deficit was not mentioned. Second see Jo Otten’s (LDV) analysis of Ed Ball’s [absence of] plans to fix the deficit.
“So which part of the article do you disagree with or dispute, @RC? ”
1) The attempt to whitewash Labour’s role in mismanaging the UK economy which left us in the mess from which we have painstakingly been trying to extract ourselves for the last four years against all the odds. This is the fundamental context for the whole economic situation the UK faces today. Yet he just whitewashes everything with a general reference to the 2008 global financial crisis, failing to mention why the UK was at the heart of that and why it was left so laden with household debt, with a massive deficit of 11% of GDP and an economy distorted towards finance and away from manufacturing.
2) The reliance on old and outdated evidence from years ago.
3) The lack of any context about why real wages have fallen, which is everything to do with increasing supply in the labour market and rising world commodity prices and virtually nothing to do with government policy for the 80% of us who work in the private sector.
4) The lack of any suggestions about how to tackle the problems he identifies or where the cash might be found to fund them.
I’m bewildered that any of our former supporters can fail to see the massive holes in the arguments presented in this piece.
Certainly there are big problems, but the lack of any credit or mention for all the things we’ve done from increasing the personal allowance, to the pupil premium, free school lunches, increasing apprenticeships, 3% rise in the minimum wage and funding for childcare for poorer families shows how biased this article is.
In short, we’ve done loads of things to try to help poorer people, under very difficult financial circumstances and neither he (nor you) seem to be giving the Lib Dems any credit at all.
There is another article I have written for LDV (which is awaiting publication) that puts forward what that alternative economic strategy I refer to in this article could be.
Its nice to read the various comments people have made. Thank you everyone.
@ Malc
“Now we have people saying it shouldn’t even be published or discussed on LDV.”
No. It’s fine to discuss these issues. Poverty and how to solve it is one of the key questions any political party should be confronting with urgency, particularly the Lib Dems.
But this article isn’t a worthwhile starting point. It is not constructive and it is totally biased against the Liberal Democrats, ignoring virtually all the good things we’ve done in government. On that basis, it deserves a hostile reaction, because it is a biased and ill-conceived piece.
Manfarang
Is Brighton a basket case? That’s not the impression I got on my visits.It’s more vibrant than Hastings.
Yes, loads of rich trendies move there, push house prices up and pretend they are “Brighton”. It has the highest ratio of house prices to wages of any part of the country. Most outsiders haven’t a clue what the REAL south is like, they just have this stereotypical image, where the southern working class are invisible.
@Matthew Huntback “Yes, loads of rich trendies move there, push house prices up and pretend they are “Brighton”
Perhaps we should have a system of internal passports to stop people moving to nice parts of the country?
Anyway, even questions like homelessness in the Brighton area are a lot more nuanced than “Oh, it’s all the nasty Coalition’s fault”, as this piece from the Argus makes clear. Other factors like migration and population mobility are also at play.
http://www.theargus.co.uk/news/10428363.Time_for_a_new_approach_to_Brighton_and_Hove_homelessness/
A lot of the poor today are in poverty because they lack the life skills and education needed to obtain and keep decently paid jobs. Most of them were educated under Labour. Yet no mention is made of this in Vittorio’s article.
Simon McGrath 29th Sep ’14 – 4:18pm
Why is LDV publishing articles on how wicked Lib Dems are from a Labour Party member and calling it ‘independent’?
Well Simon, maybe for the same reason that LDV recently published an article on housing from a rightwing fundamentalist graduate of the Cato Institute.
I don’t think you objected to her US based Libertarian ideas appearing in LDV, did you?
@Vittorio “There is another article I have written for LDV (which is awaiting publication) that puts forward what that alternative economic strategy I refer to in this article could be.”
Rather than start a parallel thread, perhaps you could post your proposal in this thread.
Also, from what I can tell, on LDV there is a wordcount limit on articles that does not apply to responses in the threads below, so you might have a bit more flexibility.
Regarding the reference I made to the Recruitment and Employment Confederation awarding the government 5 out of 10 points in its record on creating jobs and opportunities, this is where I found out that information:
https://www.rec.uk.com/news-and-policy/press-releases/archived-press-releases/rec-awards-coalition-government-510-in-half-term-report
Thanks, Vittorio, for the post. I actually think it is important for the Lib Dems to listen to what members from the other parties are saying.
@RC
“Why do you spend so much time making hostile posts on the site of another party, then? There’s a term for that kind of behaviour, but I’m not going to use it out of politeness.”
Why? I don’t think I can do better than cite John Stuart Mill
“the peculiar evil of silencing the expression of an opinion is, that it is robbing the human race; posterity as well as the existing generation; those who dissent from the opinion, still more than those who hold it. If the opinion is right, they are deprived of the opportunity of exchanging error for truth: if wrong, they lose, what is almost as great a benefit, the clearer perception and livelier impression of truth, produced by its collision with error.” (With gratitude to Project Gutenberg) Fortunately, the excellent Lib Dem Voice exemplifies Mill’s principle: you obviously do not. I quote: “That is not the kind of “contribution” worth engaging with, is it?”
“I’m looking forward to writing a piece on LabourList about how it’s time Labour came up with some of its own ideas on the economy rather than simply trying to steal Lib Dem ones. Plus another about all the damage the economy suffered under its years of economic mismanagement.”
As a democratic member of the Labour Party and In adherence to Mill’s principle adumbrated above I urge you to do so.
“This is the first economic analysis on Lib Dem Voice that I have completely agreed with. But I’m a member of the Labour Party!”
Luckily for you, Labour is almost certain to win the next election.
Unluckily for the country your party will do what is always does. Spend what is doesn’t have, increase taxes, and increase the national debt so we pay more in interest than on national education.. Leaving our nation in an utter shambles YET AGAIN..
Cows moo, dog’s bark, Labour can’t run the economy. What a roll call of great Labour Chancellors: Philip Snowden, Stafford Cripps, Jim Callaghan, Denis Healey, Gordon Brown, Alistair Darling….
Ed Miliband and Ed Balls following the great tradition, huh? God help us all when you win. 🙁
This isn’t analysis, it’s an impotent gossip text. The Author criticises and complains, selects evidence that suits and avoids evidence that doesn’t, and doesn’t end up making any positive suggestions at all.
For an analysis of what has been happening, one could do worse than read “The Cost of Inequality” by Stewart Lansley. Not necessarily definitive, but shakes a few bones.
@ Simon
It would be tedious of me to erect a defence of all the Labour chancellors you cite. However, even you must surely accept that if Gordon Brown was such an execrable chancellor, it is curious that the normally discerning British public allowed him the opportunity of three successive terms in office with huge majorities in which to wreck the British economy. They must have thought he was doing something right. Could it be that they approved of Gordon’s staunch refusal to take this country into the Euro despite the exhortations of the Liberal Democrats? Can you imagine the destruction your party’s economic policy would have wrought upon this country if it had had those three terms in power? Particularly if entry into the Euro had been combined with the financial meltdown occasioned by the reckless activities of the bankers and City of London interests that are the principal supporters and donors of the Liberal Democrats’ coalition partners? And from which Gordon Brown and Alistair Darling thankfully rescued us by acting so decisively to bail out the banks.
If the Liberal Democrats actually believe that the massive deficit caused by the greed fuelled gambling of the financial and banking sector was brought about by Labour and are happy to continue reciting the tired old Tory mantra that it was all Labour’s mess then it is little wonder that they are languishing at seven per cent in the polls, and have lost so many by-election deposits as well as hundreds of council seats, and MEPs. They have clearly lost touch with reality: This explains why so many of them here have vilified Vittorio’s really quite anodyne suggestion that in view of the poverty and economic hardship they have created their economic policies need some drastic rethinking. It also explains , why they even quite illiberally reject Vittorio’s right to advance his opinions on Lib Dem Voice.
By the way, criticise labour all you wish, but that won’t conceal the fact that, despite all of the hardship and misery inflicted upon the public, the Coalition’s attempts to address the deficit has failed and they are borrowing more than ever: http://www.telegraph.co.uk/finance/economics/10982357/George-Osbornes-deficit-reduction-plan-under-pressure-as-borrowing-rises.html
Let’s not mince words. Anyone who argues for reduction in benefits for the working poor, and argue for lower wages, are in fact arguing for the economic ruin of the majority of people in the UK. Fancy words and statistics won’t retract from that wish. 😉
The greatest expansion of wealth and property in the world took place between the 1930s and the 1970s, and that was the era of Bevan and taxing wealth to kingdom come. Since we embarked on neo-liberalism, we have seen the most massive concentration of wealth since the days of the French aristocracy.
Congratulations, your liberalism would be applauded by Marie Antoinette. Aren’t you all going to tell the poor that they can eat cake if they don’t have bread? Maybe that’s why my party, the greens, are now neck-and-neck with yours in the latest YouGov poll. 😉
Our solution is, of course, to have a living wage because, to echo what that most archetypal of far-left demagogues, Henry Ford, said a 100 years ago: “The owner, the employees, and the buying public are all one and the same, and unless an industry can so manage itself as to keep wages high and prices low it destroys itself, for otherwise it limits the number of its customers. One’s own employees ought to be one’s own best customers.”
http://www.saturdayeveningpost.com/2014/01/03/history/post-perspective/ford-doubles-minimum-wage.html
Matthew Huntbach
COR BLIMEY.LOR’ LOVE A DUCK. My relatives in Brighton are impeccable working class folk. In fact I have a good southern British accent .None of that Received Pronunciation nonsense and I am not invisiable. Like some in that part of the world I am sick of all the English class nonsense which is why I would never support Labour or the Tories.
I welcome the Chinese to Brighton.It’s nice to get some good vegetarian Chinese nosh and buy Chinese groceries, especially the cans of mock duck from Taiwan and the young and not so young Chinese ladies are lovely.The Chinese blokes are friendly too.( a bit of trouble at mill In Hong Kong at the moment- Will someone from the Chinese Lib Dems please post something on the LDV)
Cheers Mate
Colin
The industrial decline in Britain started after WW2 and accerated during the 1970s.
What is your answer go back to strip farming?
@ Mack (Labour member)
“criticise labour all you wish, but that won’t conceal the fact that, despite all of the hardship and misery inflicted upon the public, the Coalition’s attempts to address the deficit has failed and they are borrowing more than ever”
Yawn. It’s the old debt versus deficit difference again. The debt (borrowing) will continue to rise until the deficit is down to zero. The latter was the Tory pre-election and pre-2010 sovereign debt crisis target but it wasn’t the Lib Dem target nor Labour’s target (each were aiming to have reduced the deficit by about half).
It’s a bit odd that Labour are now lining up to criticise the Government for not having reduced the DEBT but opposed every Coalition policy to try to move in that direction.
@ Vittorrio
“There is another article I have written for LDV (which is awaiting publication) that puts forward what that alternative economic strategy I refer to in this article could be.”
I look forward to reading that article. I’m genuinely interested in seeing if the deficit could have been reduced in a fairer way or if any other strategy might have worked better. But RC above pretty much says what I think about this article – it’s just so full of holes and cherry-picked factoids to be laughable.
@Julian Tisi
“Yawn. It’s the old debt versus deficit difference again.”
Yes, it’s funny that those dumb economists at the Daily Telegraph don’t appreciate the difference yet still conclude that Osborne has missed his target for trimming the deficit by over two billion. http://www.telegraph.co.uk/finance/economics/10982357/George-Osbornes-deficit-reduction-plan-under-pressure-as-borrowing-rises.html
“earnings remain below the rate of inflation while living standards have, according to one report, “fallen across the board” since 2010.”
Nice sound-bite but doesn’t actually say very much. I would expect earnings growth to be below the level of inflation, because UK wages only form part of the inflation basket, a much bigger part is taken up with having to buy and sell stuff on the world market and hence subject to price fluctuations that have nothing to do with UK wages. A totally logical follow on is if earns are lower than inflation then given the metrics used to assess living standards, these will naturally fall.
As a left-leaning LD, I welcome articles like this. I’m not clever enough to sort out the economy – as none of us on LDV would be proficient to do either. And that is the point, isn’t it? Not one person is – or one group of same-thinking people – is sufficiently proficient to turn an economy round. I don’t see the economy suddenly busting forth under a single political dogma. It needs everyone to work together to form a consensus.
Yes, the Lib Dems will have something to say once we can get beyond Mister Clegg’s era of domination – when we are allowed to think freely again as LDs do – and work with people like the writer who has made good points which need to be addressed by all parties. I suspect that the voters are tired of party political posturing and want to “bash heads together” to achieve consensus which will last – instead of ding-dong political drama stirred by Mister Murdoch et al.
I have no solutions other than imploring politicians to work together instead of dancing a crazy way into the future. If they cannot do that, more people will refuse to vote for the cabal of verbal fighters who, after all, are doing what they do as a job and not because they are more intelligent than the voters.
@ Mack (Labour member)
Once again, the target in question is a Conservative target. The deficit has roughly halved which is in line with what Labour and the Lib Dems were targeting by this time next year. And once again, Labour cannot credibly claim they would have managed to cut the deficit by more when they’ve opposed every policy which has brought the deficit down.
@Julian Tisi
Yes, Labour have opposed the Coalition policy of cutting the deficit on the backs of the poorest. Labour would have halved the deficit with very different policies.
@Julian Tisi
“Once again, the target in question is a Conservative target. ”
But when Osborne promised through austerity to remove the deficit in the lifetime of one parliament everyone assumed that he was speaking on behalf of the Tory/Lib Dem Coalition. You appear to be resiling from this. Or at least asserting that the Lib Dems had a different schedule for deficit reduction to their Coalition partners. You do realise that the Liberal Democrats are in Coalition with the Tories don’t you? Or is that the new Lib Dem election strategy? Pretend we were never in Coalition with the Tories?
The follow up to this article got published later this week:
https://www.libdemvoice.org/the-independent-view-the-need-for-a-new-economic-alternative-42610.html#comments