Right so according to the latest growth forecasts from the IMF, the International Monetary Fund, who keep an eye on global productivity and economic advancement, as you do, every G7 country and more besides, are forecast to see economic growth…except the UK. Where other countries are now expected to not only grow but do so exceeding the IMF’s previous forecasts, the UK’s economy is going to shrink instead. After 13 years in power, there’s no chance of blaming the last Labour government any more, this is all on the Tories, so who are they going to blame for this one?
Putin? Russia? Well Russia is currently engaged in a war with Ukraine as we know, it’s costing them the Earth, there’s mumblings of mutiny amongst the ranks, protests in the streets, they are getting their collective arses handed to them by Ukraine and yet Russia is still expected to see economic growth! That’s despite economic sanctions put upon them as well! They might only be growing by 0.3% according to these most recent IMF forecasts, but we’re contracting by twice that amount, a growth forecast of -0.6% and we aren’t under the same sanctions they are, we’re supposed to be the 6th biggest economy on the planet, Russia is 9th! Perhaps all that Caterpillar equipment the Tories new senior treasurer is selling to Putin’s oil and gas industry has helped in their productivity, what a pity the Tories aren’t as focused on helping UK productivity instead! Now Russia very much has been blamed by the IMF for poor growth before now that has been seen globally, but now that everyone else is actually recovering, why aren’t we? How have the Tories stuffed up our economy so badly that we aren’t seeing any sign of recovery still, and in fact we’re in recession instead?
Let’s start with energy. Our energy bills are still sky high, despite wholesale energy prices having collapsed well below what they were prior to Russia’s invasion of Ukraine which the government has blamed obsessively for the price rises. Our energy prices are dictated by the wholesale gas market, regardless of whether you use gas or not, whether your electric is from renewable sources or not. Wholesale gas peaked at a price of over 700 pence per therm, a therm being the measurement used, the old money British equivalent of about 29kWh in case you wondered, back in August, but those prices have now dropped in recent days to just 124 pence per therm, yet our bills are still enormous. Why? That’s due to our energy suppliers buying energy from energy producers and distributors at a high price for months in advance, so those higher wholesale prices are still being passed onto us. The con, is that many of these energy suppliers are also producers and distributors, have bought at inflated prices from themselves and have been raking in those record breaking billion pound profits as a result. They could drop the prices immediately, they could take the hit, they could put customers first, our government could legislate to force them to do so, but greed is their God, so we get screwed, the energy barons make a mint and the Tory ideology of rob the poor to feed the rich continues unabated. Making matters worse is that it’d have been cheaper to purchase wholesale gas if we could buy more in bulk, store it for later, but of course most of our gas storage facilities got sold off to developers – by this same Tory regime. Eventually the energy suppliers will buy at this cheaper rate, our bills will go down, but it isn’t going to happen yet and that hits us in the pocket, we don’t spend and when ordinary people don’t spend, the economy doesn’t grow. If we renationalised it of course the government could act to bring these prices down overnight, but socialism for the proles by this bunch of rich kid shysters in power? Fat chance.
Another reason stems from the Bank of England and it raising interest rates repeatedly as it has done over the last several months. They did this initially to keep inflation down in order to preserve some of the value of the pound sterling as the government was forced to print money to help us with those energy bills, the cost of living crisis more widely, our currency being valued more than actual people who suffered from those rising interest rates and the rising price of everything that came with it. Then of course Liz Truss came in and screwed it up even more with her mad uncosted spending to pay for tax breaks for the rich which they absolutely did not need, and the Bank of England hiked interest rates again to compensate for that inflation shock, causing anarchy amongst those with mortgages as all of a sudden they were paying vastly more for their own homes. Oh won’t you think of the rental market some wailed. No, people need one home, not a portfolio of them. Just ask Nadhim Zahawi’s wife, I can’t imagine what the interest on her £30m worth of property loans was, unsecured as they were, but hey, we still have no idea who the lender even was. Anyway, I’ve digressed.
What the Bank of England did was compensatory for inflation, but inflation is a complex picture caused by so many different things that it is difficult to predict and the Bank of England functionally has no control over it. It can only offer sticking plaster solutions and when those solutions again hit ordinary people in the wallet, so they tighten their belts and stop spending, the economy again suffers for it. The Bank is also keeping those interest rates up for far longer than other countries other areas that have taken similar measures, the entire Eurozone for example and when you figure that the Bank of England is basically just a quango for the Treasury, that the Chancellor of the Exchequer, Jeremy Hunt could step in and do something about that, you can see this as being yet another economic problem being hindered by the Tories and not helped.
I’ve made reference to spending more, people having cash in their pockets twice now, but it’s not just ordinary people having cash to spend on the high street that would help, but also the government spending too. It could be investing better in our public services, it could be giving more money to local government to meet the needs regionally, it could embark on a big housebuilding scheme to tackle that crisis if it liked, all would get more cash into the economy and get it growing and flowing, good investment promotes economic prosperity after all. But instead they are still cutting everything, still saying they’re investing more even as the figures show every investment is below inflation and therefore a real terms cut. Austerity has never ended, they might no longer say the word but they’re still carrying on their ideological pursuit to shrink the state, to serve the public less and it’s costing us because economically it’s the same madness it was when it was first introduced.
The last reason for the UK’s economic woes is the most pernicious too. For people to spend more, they need more money. We’ve got strike action happening across the country in all manner of services and industries, from nurses, doctors, bus drivers, rail workers, firefighters, Amazon workers, gig economy workers the list just keeps climbing and will this Tory government listen and negotiate and meet with people meaningfully with a desire to resolve these conflicts? Absolutely not. They expect people to take below inflation pay rises by saying if they gave them any more that would stoke inflation, it is counterintuitive nonsense right now, when it’s clearly a wise investment to ensure people can actually afford to live and feed themselves! The Tories would rather draw things out, wage war on its own people, legislate to ban strike action, or criminalise those taking it if they might be a bit noisy, or ensure you can be sacked for doing so if they’re rostered on to work. Their war on workers might as well be called a war on the economy because the end result is the same thing. Disposable income is gone, heck, enough to feed and clothe yourself is gone for too many, as the queues at foodbanks prove. For all of these reasons above this government has baked in a recession no other major economy is suffering from right now, not even one with sanctions on it for starting a flaming war. But then we can quite easily argue this Tory government started a war too, they’re waging it against us and if you support them, if you vote for them, you’re on their side of this economic conflict, not that of ordinary British people or our nations economic success.