Don’t panic – we really have never had it so good!
BRITAIN’S political system is mired in crisis, thanks to a discredited Parliament that wilfully refuses to implement the EU referendum verdict. In this atmosphere of deepening turmoil, the Government is paralysed by impotence and divisions.
Yet, in heroic defiance of the political meltdown, the British economy continues to perform impressively. As the latest economic statistics reveal, what we have is a tale, not of disaster, but of remarkable good health.
Yesterday, official figures showed that, in the three months to July, wages grew at their fastest rate for a decade, up by four per cent compared to the same period in 2018.The long squeeze on pay that started after the 2008 financial crash now seems finally to be easing. With salary growth significantly above inflation, working households have enjoyed a welcome recent boost to their living standards.
At the same time, the recent jobs miracle shows no sign of ending. The unemployment rate fell to just 3.8 per cent, its lowest since 1974, while there are now record numbers of Britons in work. Overall, 76.1 per cent of the population are in work, the highest-ever level.
Despite the shrill Left-wing narrative of doom, more than 3.6 million jobs have been created since the Tories came to power in 2010 – more than one million of them since the Brexit vote alone.
THESE positive stories are backed up by other evidence. Fears that the United Kingdom is sliding into recession were contradicted by a report last week which showed that the economy expanded by 0.3 per cent in July, the strongest monthly growth since January and far higher than City forecasts of just 0.1 per cent. In reaction to this news, sterling rallied to its highest level for six weeks.
The panic-stricken pessimism
of the political class and its media allies is in stark contrast to the optimism of consumers, whose expenditure has helped to maintain the robustness of the economy. Household spending was up 0.5 per cent in the three months to June, while retail sales volumes rose by the same amount. Even department stores, hit badly in recent years, recorded month-onmonth increases this summer.
According to Yael Selfin, an economist at accountancy experts KPMG, “People are just getting on with it. Interest rates are not going up. Credit is plentiful and cheap.” But consumers are not building up perilous amounts of debt, despite the claims of some scaremongers.
“UK households are acting prudently. They’re not borrowing a lot. They are spending out of real income,” says Mark Carney, Governor of the Bank of England. Those words illustrate the huge disconnection between the self-indulgence of our politicians and the restrained common sense of the British public. Predictions of catastrophe have so far proved hollow because too often they are nothing more than political propaganda, as we witnessed in 2016 over the Remainers’ notorious Project Fear, which turned out to be baseless.
Indeed, the pro-Brussels brigade’s entire portrayal of the EU as a vast engine of prosperity has turned out to be far more hollow than their warnings of Brexit calamity.
In the three months to June, the German economy actually shrank and other EU nations struggled, weighed down by massive debts, an excessive bureaucracy and plain lack of enterprise.
There are further lessons from Britain’s strong economic performance. One is our ingrained national resilience, despite the political upheaval. This should hardly be a surprise, given our heritage as a great trading power, free-market innovator and pioneer of the Industrial Revolution.
Another is the lasting impact of the Conservatives’ economic policy, especially the financial plan followed by George Osborne as chancellor.
HIS STRATEGY was ferociously denounced by Labour, but its key features – reducing the fiscal deficit, slashing taxes for the low-paid, and promoting work through welfare reform – were vital in rebooting the economy.
There is, however, no room for complacency. Some sectors certainly are in trouble. New car sales have plummeted. The property market is sluggish. Construction orders and factory output are down.
And there is the prospect of daunting economic challenges ahead, such as a disorderly, No-Deal Brexit, a global downturn, or the arrival in power of a quasi-Marxist government under Jeremy Corbyn. Yet Britain has weathered worse storms before. With resolve, we can do so again.
‘Working households received a welcome boost to living standards’