One year ago, a basket of 22 budget goods from Aldi would have cost £30.97p. Today that same basket of goods would cost £34.11p. A rise of 10.14%. Inflation, so we are told, is currently 3.9%. For comparison both France and Germany are currently at 3.7%, having never reached the levels the UK did. Japan is at 2.9%, and even the USA, which has an economy on the brink of recession, is managing inflation at 3.4%.
According to the OECD, UK inflation is expected to remain at around 3% but also to remain above inflation in the USA, Japan, France and Germany. Our economic miracle looks less impressive when you realise that most so-called developed economies are doing so much better.
The OECD also notes that growth projections remain low. This is worth noting since the Labour Party’s manifesto is predicated upon achieving the highest growth in the G7. Amongst the G7 countries only Germany and Italy are predicted to have lower growth than the UK over the next two years. Growth is likely to be highest in India, Indonesia and China.
The OECD is pessimistic, citing “Tighter financial conditions, weak trade growth and lower business and consumer confidence”. The only means they identify of changing this is “if households spend more of the excess savings accumulated during the pandemic”. In other words, they see no economic mechanism other than the forlorn hope that consumers will get them out of the mess they have created. When Orwell wrote “All hope lies with the proles”, I’m not sure this is what he had in mind.
Gas and electric prices have just risen. Again. Mortgages are increasing as a result of historically high interest rates.
Everything is going up. Except your income. Junior doctors are on strike for a living wage. Nurses are still having to use food banks. For those on benefits the only real question for the coming general election is: which party will treat them most harshly?
There is, in all this, some better news. Prices are not rising at the rate they were this time last year. They are still going up but not as fast. Though that will be scant comfort to those on low incomes who can barely afford to survive now.
Yet the UK remains one of the richest countries in the world. How can it be that in the 5th richest country in the world 300,000 people are homeless? Or that more than 4 million children go hungry each day?
We are in an election year, so inevitably the Tories will manipulate the figures as much as possible to pretend that the economy is booming and ‘we’ve never had it so good’. How many times have we been told that we’ve never had it so good only to find that we’ve never had it so bad? How many more times will we fall for the same tired rhetoric?
In the run up to the election the millionaire Prime Minister will tell us that we are all in it together. We need to tighten our belts for the sake of the country. Starmer will echo those words, reminding us that there is no magic money tree, in an attempt to dampen our expectations before we get carried away and think that a change of government will mean a change in our fortunes.
The timidity of Labour on the spending front can be seen in their attitude to overseas development. The Cameron government put into law a commitment to 0.7% of national income on overseas development, used to support some of the most poverty-stricken areas of the globe. That is less than one penny in every pound. But Sunak has suspended that amount and committed to just 0.5%. Whilst initially Starmer pledged to increase the amount to 0.7% (but no higher), David Lammy, the Shadow Foreign Secretary, has since said that this amount would only be restored when finances allowed it. In other words, no time soon.
On the other hand supporting wars seems to be under no constraints at all. The Tories, with the support of Labour, recently pledged a further £2.5 billion to Ukraine and launched yet another military escapade against the Houthis in Yemen. The total gifted to Ukraine since the Russian invasion now stands at £7 billion, which would bring quite a lot of people in the UK out of poverty and more elsewhere, if used for genuine overseas development rather than simply being spent on buying arms from British arms dealers. It is arguable that aid to Ukraine is actually just a massive subsidy for the arms manufacturers, whose profits are increasing exponentially as the world becomes a more unstable and less peaceful environment for the rest of us.
What has all this to do with the cost of living? You don’t need me to tell you that your income seems to be worth less and less each month. If the price of an item, let’s say biscuits, rises by 10p in a week, that can mean the difference between buying and not buying. In fact, over the past year, a pack of Belmonts Digestives in Aldi has risen by 12.24%, that is four times the current rate of inflation. A pack of toilet tissue has risen by 23.8%. A massive increase in the price of something we all consider to be an essential.
The reality of an economy with no plan to improve and no mechanism by which it can improve is not felt by millionaire PMs but by ordinary people with ordinary lives, whose opportunities in life are not simply restricted but are virtually non-existent.
What kind of society are we that, come the election in May or possibly October, the choice offered to us is austerity or austerity? Where politicians so devoid of any moral responsibility will justify cutting back on help to the most needy (in this country and abroad) whilst they can stand in parliament and spew out their lies about every military adventure they engage in as in the interests of ‘self-defence’. Whilst they bomb children in Gaza and let children in this country go hungry, their own families continue to live a life of relative luxury.
Surely at some point people will wake up to the reality? Global capitalism is a failing system, and the only way to remedy complete failure is to start all over again. Never has the need for socialism been more apparent, and never has the likelihood of socialism seemed more distant. How do we turn this around? How do we secure the future for the next generation? There are no simple answers to those questions, but this much I know: It won’t be through the election of yet another career politician for whom truth is just a rhetorical device on their way to power.
Socialist of many years. Former Labour member. Currently presenter of The Socialist Hour.