I wouldn’t celebrate if I were George

Osborne may gloat on Friday, but three years of stagnation will have to be paid for

On Friday official figures will almost certainly show that the economy has been growing for the third successive quarter. As a consequence, expect more than a degree of triumphalism in the Tory press come the end of the week.

Despite the welcome return of growth, however, most people’s living standards are continuing to worsen. All but one month of David Cameron’s three years in office has seen a fall in real earnings, and close to eighty per cent of the jobs created since June 2010 have been in industries where the average wage is less than £7.95 an hour. Employment among young people has failed to return to its pre-recession peak and the number of unemployed women has remained around the one million mark for more than two years. A record number of people are also working part-time because they can’t get a full-time job.

I wouldn’t celebrate this if I were George.

The other thing to remember come Friday is that, despite the recovery being well underway, real life has continued much as before since May 2010. It won’t be a return to business as usual come Friday because the three wasted years – of savage cuts and a stagnant economy – cannot be erased from the record and will leave a legacy.

A quick historical detour is in order to demonstrate my point.

When Labour came to office in 1997 the economy was growing at an impressive rate. If we look back at things in purely economic terms you might say that, despite the ups and downs of the 1980s and the recession of the early 1990s, the Conservative governments succeeded in turning Britain around.

That would indeed be the economists’ view.

And yet the 1980s and 1990s saw a threefold increase in people reliant on out-of-work benefits and a doubling of social security expenditure as a share of GDP. Go back to 1963 and there were less than half a million people claiming incapacity benefit. By 2009 that figure was 2.6 million. Overwhelmingly today’s claimants were and remain in areas that were rapidly deindustrialised in the 1980s. These were direct consequences of rapid deindustrialisation carried out by the Tory governments, with little concern shown for the long-term social consequences of such radical policies.

Of course, Labour too would have carried out many of the big privatisations had they been in office during the 1980s, just as they would be cutting and ushering in austerity were they in office now. But ‘too far, too fast’ is not just a slightly annoying (and now sidelined) soundbite. Subtleties matter because we are talking about people rather than digits on a balance sheet. Anyone who says ‘it’s the economy stupid’ is themselves stupid, as someone once put it, for there is no such thing as ‘the economy’, but rather lots of people going about their business and trying to improve their lot. Ironically it was Margaret Thatcher who once said she ‘sometimes feels that the political debate in Britain is too much dominated by economic argument’. In other words, decisions taken with purely economic considerations in mind can only ever be half correct.

Indeed, Osborne’s three wasted years are more than a horizontal line on a chart. Rough sleeping in London has increased by 13 per cent in the past year, with six and a half thousand people sleeping rough in the capital in 2012. Fifty thousand council tenants are facing eviction because of the bedroom tax and the number of people using food banks to feed themselves and their families has gone from 40,000 a year under Labour to over 350,000 in the last six months alone.

All policy disasters, I would add, that will generate future social and financial costs just as the supposed economic miracle of the 1980s left a legacy that we are still struggling to get to grips with today.

Should you feel the urge to congratulate George Osborne on Friday by all means do so. Remember, though, that the last three years still happened, and that they too will have to be paid for at some point.