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Tories making us all poorer

Osborne would have us believe annual growth of 1.9 per cent in 2013 constitutes a 'brighter economic future'

George Osborne would have us believe after modest annual growth of 1.9 per cent in 2013 that people in Britain can contemplate a "brighter economic future."

His Cabinet colleague Vince Cable is not convinced, suggesting that the Chancellor has presided over the wrong kind of recovery, one based on consumer spending and an overheated housing market, especially in London and south-east England.

Osborne's big business friends are also less than enthusiastic despite their willingness to praise him publicly.

Corporate insistence on retaining tens of billions of pounds on their balance sheets rather than investing these cash assets to generate growth is a far more eloquent commentary on the current economic juncture.

Labour's refusal to join in the praise singing for Osborne's policies, pointing out that Britain's economy has still not achieved pre-2008-crisis output levels, appears to have knocked the petulant Chancellor off his equilibrium.

There can be no other explanation for his hysterical response of labelling Labour frontbenchers as "anti-business ... anti-recovery, anti-jobs, anti-investment, anti-the British people."

Whatever the weaknesses implicit in Labour's austerity-lite programme, Ed Miliband and Ed Balls are correct to bang on about economic recovery not reaching working people.

This is not simply about the effective squeeze on workers' salaries in both public and private sectors, with pay increases barely half the official - understated - rate of inflation.

It is also about the areas of major expansion, chiefly the services sector.

No less than 86 per cent of the 0.7 per cent growth generated in the last quarter of 2013 came from this sector, while construction dipped by 0.3 per cent as a direct result of government-imposed cuts in infrastructure spending.

Services are an important area of economic activity, but pay levels do not compare with those in the building industry.

Holding back employment in traditionally better-paid areas while expanding areas with pay levels nearer the minimum wage may look good on a jobs count basis, but they contribute to a reduction in working people's collective purchasing power.

Aberavon MP Hywel Francis spoke earlier this week of 570 people applying for just 15 posts at a new supermarket in Briton Ferry.

It is good news for the fortunate 15 to be able to escape from the depression of being unemployed, but the disappointment experienced by the unlucky 555 exemplifies the desperation of jobless workers in many parts of Britain.

The announcement by Lloyds Bank that it will dump another 1,080 staff, while outsourcing a further 310, speaks further of the collective impoverishment of the working class.

Many people supported the last Labour government's bailout of the private finance industry on the grounds that it provided a breathing space to put the banks on a sounder footing and save jobs.

In reality the banking bosses are as acquisitive and self-regarding as ever and are building fortunes on the wreckage of blameless workers' careers.

This doesn't bother the Chancellor and his fellow free-market, slimmed-down-state zealots for whom the bottom line is all that counts.

If Labour attempts to contest the next election on ground chosen by the City and its favoured political representatives - neoliberal orthodoxy, supposed economic efficiency and reduced public spending - it will lose.

The only way to enthuse Labour's traditional base - and the millions of people who no longer see the point in voting - is by posing a real alternative that puts working-class priorities before those of the City.

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