I’m fed up with being lectured on the economy. And by people who either dont know the truth, or dont care. I agree that Labour didnt tell the truth at the last election. We didnt tell people what a great job we had done on the economy in 13 years.
I’m going to giveyou the truth about our economy. All my figures are from the Office for National Statistics, so are totally unbiased. But what would you say if I told you that people were over 30% better off in real terms in 2010 compared to 1997? Well, if you use the figures on GDP here at ONS, then in the 1st quarter of 2010, the GDP per capita (the techie term for per person) for the UK was £20,934. What that means is that if all the market value of all final goods and services made within the UK last year were shared out equally amongst every man, woman and child, then everyone would get just under £21,000.
But we’ve just had the biggest recession since the war, right? Well, yes, we have. The second quarter of 2008 was the highpoint. The magic number there was £22,451. Yes, the biggest recession since the 1930’s has only lost us £1500 a year, after allowing for inflation. Suddenly doesnt sound so bad, does it?
Yeah, well, Gordon Brown was an appaling chancellor and a worse Prime Minister, wasnt he? I mean their time in Government was full of mismanagement, wasnt it? Well, the figure for the 1st quarter in 1997 (thats the last time the tories were in office for those younger readers), was £15,930. I bet he hasnt allowed for inflation, I hear you ask. Well, actually that is the inflation adjusted value. In 1997 money, it was only£13,630. So in real terms, people were 31.4% better off in May 2010 than they were in May 2007.
Yeah, but I bet those figures are just down to the massive bloated public sector! I read it in the Daily Mail, so it must be true! Well how about we look at the % of that GDP that was made up of public spending.
Back in May 1997, 42.3% of our GDP was produed by the public sector. Thats the vertical line there on the left. By July 2007, just a few months before Northern Rock got rescued by the Government, that number was 35.5%. So all that massive public sector spending had actually reduced the size of the public sector, relative to the private sector. And as we can see, when the recession hit, and GDP shrank, that had an effect on pushing the graph up. And as people lost their jobs, more money was spent on benefits, and money was spent on keeping people in work. So the graph went up. You can even see the vertical jumps when various banks were nationalised. And when the economy grows, and welfare goes down, the graph will go down. So the quicker we grow that economy, the sooner the public sector will get back to its usual level. Which isnt where we found it.