The Chancellor can’t take credit for all of the recoveryby Bronwen Maddox / March 21, 2014 / Leave a comment
With just over a year until the general election, and some kind of recovery under way, one question hangs over the Chancellor’s performance: was he right in the course he set four years ago, or just lucky that the economic tide has turned? “Mainly right—but could have been much more so,” is the best answer to the first. Certainly lucky, should be the answer to the second.
But he is a long way from reaping political rewards for either. YouGov polls show the Conservatives trailing Labour by four to eight points, and only 38 per cent give the government credit for the recovery. The government still lacks a good response to the economic puzzles of the past six years: the stubbornly unchanging level of productivity, the consequent failure of wages to rise, and in turn, the squeeze on living standards. It has also failed to answer the bigger questions confronting Britain and other developed economies: how to tell the country that it cannot afford pensions as generous as in the past, how to boost savings, and what it should or could do about inequality.
Looking back over four years, the Chancellor has been less austere than his rhetoric or public image. Figures released at the autumn statement showed that public sector spending (before inflation) has actually risen, and is projected to rise further, from £717.8bn in 2013-14 to £730.5bn in 2014-15, reaching £778.7 in 2018-19, although many of the cuts, such as…