It’s good to know that the latest figures show that industrial production (which includes North Sea output and domestic energy) rose 0.6% in the second quarter of this year. What is not broadcast quite so loudly is that manufacturing is still more than 10% below its pre-crash peak, and likewise GDP is still 3.3% below the previous peak. More worrying still, exports are largely unchanged, even to faster-growing non-EU countries, despite a whopping 25% devaluation. Company investment has also plummeted by 34%. Real wages are now 9% below their peak – a remarkable collapse (for which we must thank George Osborne) when in all other post-war recessions they have risen – and are expected to fall further. This is the flattest, , slowest, longest-drawn-out, feeblest ‘recovery’ for over 100 years, so it’s good that industrial production has edged up marginally because otherwise there would have been nothing positive to say about the economy at all.
But none of this econometric data really gets to the heart of what is happening. There are now 2.52 million people unemployed, and even the CBI is admitting it would have exceeded 3 million had it not been for the million ’employed’ (if that’s the word) on zero hours contracts. Zero hours are the modern version of the hated casualised labour schemes used in the pre-war docks, and the practice is growing fast not least among young people, of whom 76,000 were subjected to it last year. Wages and salaries which collectively amounted to 65% of GDP in 1976 now stand at barely 53%, whilst profits are at an all-time high. The figures for ordinary people facing wage freezes and pay cuts would be lower still if they were not inflated by the huge self-allotted enrichment at the top where chief executives of FTSE-100 companies are now paid £4.25 million a year, that is £81,730 a week. In 1998 their pay was 47 times the average earnings of an employee, but by last year this had tripled to 133 times as much!
Those forced to rely on emergency food handouts has trebled to a third of a million. The payday loans industry, Wongaland, is making a mint out of charging a staggering 5800%, enmeshing their victims in perpetual poverty. Some 13.5 million people, more than a fifth of the entire population, including 2.5 million children and 1.8 million pensioners, are now estimated to be living below the poverty line defined as 60% of the average wage. At the same time the corporation tax rate has been halved from 83% in 1979 to 45% now, but there have been no tax cuts for ordinary people. By last year the poorest fifth of households was paying 38.2% of their income in direc and indirect taxes, yet the richest fifth were only paying 33.6%. The richest 1% now hold 23% of total UK wealth and the richest 20% hold no less than 62%, while the poorest 20% have virtually nothing.
If this is a recovery, God help us if there’s a downturn.