Figures released last week appeared to show that chancellor Philip Hammond could deliver his promise of “a falling deficit and shrinking debt”.
The Office for National Statistics (ONS) announced a £2 billion budget surplus—where the government is receiving more than it spent.
It’s the largest for 18 years and comes as government borrowing between April and July of this year was at the lowest level since 2002.
This is often presented by politicians and sections of the press as a good news story. And it’s sometimes implied the money will trickle down into the pockets of ordinary people.
While it is true that Hammond has been able to force the deficit down, government debt is actually rising. Government debt currently stands at 85 percent of gross domestic product—up from 38 percent in 2005.
Hammond seemed emboldened by the news, and tweeted, “We can’t be complacent, we must keep debt falling to build a #StrongerEconomy and secure a brighter future for the next generation.”
Alongside boasting about the budget surplus, the government was also crowing about a low unemployment rate of just 4 percent. But real wage growth is at only 0.1 percent—that’s due to the increase in poorly-paid, part-time and often insecure work.
The announcement from the ONS came just one day after research from the Child Poverty Action Group shone a light on the reality of life for many in Britain.
Their Cost of a Child study shows that couples working full-time and earning the living wage don’t earn enough to provide a “basic, no-frills” lifestyle for two children.
It showed an 11 percent weekly shortfall—for lone parents the amount shoots up to 20 percent.
The rising cost of living, alongside wage freezes and changes to benefits, all contribute to driving millions of people into poverty and misery.
Although it sounds like a lot, £2 billion is not nearly enough to heal the deep cuts of almost two decades of brutal Tory austerity.
The Tories can boast about their budget surplus, but the economy has not recovered from the 2008 global financial crash.
From the outset in 2008, ordinary people have been made to pay for the financial crash.
Billions of pounds were spent keeping the banks running and allowing banking bosses to continue to collect their huge bonus cheques.
And now a decade later, any small uptick in the Tories’ figures won’t be spent reversing any punishing austerity measures.
The solution is to organise. Working conditions, jobs and wages will improve when workers take on the bosses and collectively fight.
But ultimately we won’t get an economy that works for us until it’s planned for human need, in a socialist society.