Join the Socialist Party Join us today!

Printable version Printable version

Facebook   Twitter

Link to this page:

From The Socialist newspaper, 11 March 2015

Economy: Reality doesn't match Tory rhetoric

photo Paul Mattsson

photo Paul Mattsson   (Click to enlarge)

Austerity works - unemployment is falling and wages are rising: that is the pre-election mantra of the Tory Party. Of course, if it were true, millions of workers would be breathing a sigh of relief that seven years of misery are finally drawing to a close. Reality - however - does not match the hype.

For the majority there is no sign of wages increasing. Yes, average wages were 2.1% higher in the last three months of 2014 than a year earlier. But that was only as a result of including the bonuses of the bankers and the few others who receive them! In reality average incomes have still not recovered from the effects of the 'Great Recession' and are 2% below their previous peak.

The picture is much worse for young people, whose wages today are around 8% lower than they would have been in 2007. Over the last six years, workers have suffered endless austerity. Poverty, hunger and destitution have returned on a level not seen since the 1930s.

And while the number of jobs may have increased, these are overwhelmingly 'McJobs'. Britain now has 4.5 million self-employed workers, more than any other country in western Europe. Most are self-employed because it is the only option available. The future facing the next generation is low-paid, insecure work. Even these jobs are centred in London and the South East - where the wages paid aren't enough to rent a cupboard, never mind a flat. Buying a home is totally ruled out for the majority - the average age of a first-time buyer in London is now 52!

Nor has austerity lowered the deficit as the Tory-Lib Dem coalition claimed it would. Osborne predicted it would be 37 billion in 2015; instead it is well over 80 billion! Of course, this will not prevent the next government continuing with austerity, whoever wins the general election. The Tories are planning to annihilate much of the public services that have survived the last five years, but Labour has also repeatedly made it clear that it too would continue with cuts.


What lies behind the drive for austerity is not simply deficit reduction, but British capitalism's aim to increase its own profits. Under the cover of the economic crisis an attempt is being made to dramatically lower the share taken by the working class - if they can get away with it, down to pre-war levels. This is not only about holding down wages, but also decimating the 'social wage' - public services. At the same time, the capitalists hope that the privatisation of public services, particularly the NHS and education, will provide new investment opportunities.

A section of big business recognises the dangers of offering only endless poverty pay for workers in Britain, and has even been toying with an increase in the minimum wage. This partially reflects awareness that an increase in incomes would increase the market and therefore improve prospects for economic growth. But it also reflects a fear that the working class - seeing the vast wealth at the top of society - will rise up to demand a living wage.

They are right to fear this. We can already see the first signs of such a revolt, for example, in the tremendous battle of London's bus drivers to demand that their wages are 'levelled up'. Only by getting organised - both in the trade unions and politically - will it be possible to win significant wage increases from big business. It is one thing for some capitalists to recognise the general economic benefit of an increase in wages, quite another for individual employers to cut across their own profits by raising their workers' wages.

Beyond the general election the central struggles facing the working class will be the battles to increase pay and to stop public sector cuts. Maximising support for the Trade Unionist and Socialist Coalition's election challenge can play an important role in preparing for those crucial struggles.


Osborne's claim that Britain's economy is returning to healthy growth is laughable. He can only make the claim at all because of the fall in world oil prices. This has multiple causes not the least capitalists' fear of a further slowdown in the world economy. In the short term, however, the fall in oil prices can slightly ease the strain on the bank balances of workers in Britain. But even in the short term this is only one side of the story. The jobs of many of the 450,000 workers in the oil industry in Britain are now at risk.

Despite the vast sum - 375 billion - that has been pumped into the British economy via Quantitative Easing, levels of investment remain at a historical low. Far from the promised 'march of the makers', British manufacturing remains exceptionally weak. The productivity gap with other major economic powers continues to widen - output per hour is 16% lower than if the pre-crisis trend had continued.

What growth has taken place in the UK economy is based overwhelmingly on increasing the exploitation of the working class, and re-inflating the credit and housing bubbles. In November, consumers took on the highest level of new debt in seven years. To a far greater degree than before 2008, borrowing is being used not just for new purchases but as a means to make ends meet.

Whoever wins the election, a new phase of the economic crisis will be on the agenda at a certain stage. This could be triggered by international events, such as the crisis in the Eurozone, but also by a new financial crisis in Britain.

The increasing inability of capitalism to meet the most basic needs of the majority - a home and a reasonably paid job - is beginning to raise the need for a different kind of society. The ideas of socialism will be put on the agenda.

A crucial step towards solving the economic crisis would be to take into democratic public ownership the 125 or so big corporations that control around 80% of Britain's economy. This would provide the possibility of developing a democratic, socialist plan of production that could very quickly transform the lives of millions.

Why not click here to join the Socialist Party, or click here to donate to the Socialist Party.

In The Socialist 11 March 2015:

Socialist Party news and analysis

Save our schools!

Take the wealth off the 1%

How can Russell Brand's call for revolution be achieved?

Economy: Reality doesn't match Tory rhetoric

Women in the frontline of fighting austerity cuts

Spied on by the state and bosses

Them & Us

Socialist Party workplace news

Camden caterers demand Living Wage

Northern Ireland public sector general strike

NHS workers reluctantly accept 1% pay rise

Dundee hospital strike after 96% 'yes' vote

Oppose tax office's 'company union'

Socialist Party reports and campaigns

Why we're standing for TUSC

Get ready for a revamp of the Socialist!

Socialist Students leads in Leeds

International Women's Day

Socialist Party general election appeal 2015

Socialist Party comments and reviews

"It wasn't easy, but I wanted to beat Thatcher"

TV review: Valleys Rebellion

Defend the right to protest

"I want my voice to be heard"

Leicester: 3 an hour wage slavery scandal


Home   |   The Socialist 11 March 2015   |   Join the Socialist Party

Subscribe   |   Donate   |   PDF  |   ebook

Related links:


triangleLife in the gig economy

triangleChina at the crossroads: 70 years since the declaration of the People's Republic of China

triangleChina after the 1949 revolution: the benefits of the planned economy stifled by bureaucracy

triangleClimate watch

triangleWhat strategy can end the retail jobs massacre?


triangleNews in brief

triangleTrump and Tories are a threat to environment

triangleWest London Socialist Party: Rebellion around the world - Is it coming to Britain?

triangleHackney Socialist Party: Rebellion around the world - is it coming to Britain?


triangleCarlisle Socialist Party: Election analysis, what now? New tasks for the labour movement

triangleHillingdon Socialist Party: Fighting for socialist policies after the election

triangleNorth London Socialist Party: Fighting for socialist policies after the election - what will be needed?


triangleSocial workers lobby Hull City Council

triangleUnite against terrorism, racism, war and austerity

Working class:

trianglePreparing to shape events internationally


triangleDrone attacks on Saudi Arabia: Tensions ratcheted up

Public services:

triangleUnions must fight to make bus drivers and passengers safe


triangleWaltham Forest Socialist Party: The election results and what comes next


triangleTata announces 1,000 job cuts - Steel unions must fight for every job!

Economic crisis:

triangleMassive protests against Lebanon's corrupt elite


trianglePay Deal: ACAS sides with management - a missed opportunity to fight


triangleTV: Crime and Punishment - this brutal watch is a damning indictment of cuts and capitalism


triangleSurrey firefighters to ballot on Christmas industrial action

Big business:

triangleKshama Sawant reelected in Seattle


triangleKnife and gun crime a product of poverty and austerity

News and socialist analysis

News and socialist analysis



End profiteering from health - nationalise big pharma



Prepare now for the struggles after 12 December


The Socialist

Keep up to date with our election coverage



News in brief



Hillsborough justice eluded



Unite against terrorism, racism, war and austerity


Northern Ireland

Northern Ireland: strike action by NHS workers



Resist attacks against free speech on campus



End council cuts now, to end Tory austerity!



Tories launch 'non manifesto'



Labour's manifesto: fight to transform hope into a socialist society



Prince Andrew outrage exposes establishment



Tory election campaign's dirty tricks and lies



Wages flatline, while shareholders profit



Broadband: privatisation has failed to deliver, time for a socialist plan

triangleMore News and socialist analysis articles...

Join the Socialist Party
Subscribe to Socialist Party publications
Donate to the Socialist Party
Socialist Party Facebook page
Socialist Party on Twitter
Visit us on Youtube



Phone our national office on 020 8988 8777


Locate your nearest Socialist Party branch Text your name and postcode to 07761 818 206

Regional Socialist Party organisers:

Eastern: 0798 202 1969

East Mids: 0773 797 8057

London: 020 8988 8786

North East: 0784 114 4890

North West 07954 376 096

South East: 020 8988 8777

South West: 07759 796 478

Southern: 07833 681910

Wales: 07935 391 947

West Mids: 02476 555 620

Yorkshire: 0114 264 6551



Alphabetical listing

December 2019

November 2019

October 2019

September 2019

August 2019

July 2019

June 2019

May 2019

April 2019

March 2019

February 2019

January 2019