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London is staging a debate on economic growth vs. the real cost of living. Could the capital host a post-growth revolution?
October 27th, 2013
By Louisa Clarence-Smith
David Cameron will be eager to capitalise on statistics released on Friday showing Britain’s economy expanded by 0.8 per cent between July and September.
But emerging voices pointing out unequal distribution of wealth gains across the UK are threatening to rain on the government’s glory parade.
On Monday, the Archbishop of Canterbury became the first high-profile figure to directly scrutinise the economic growth model.
The Most Rev Justin Welby told British newspaper The Telegraph: “Economic growth is not enough to make Britain a healthy society.”
He said more should be done to share wealth with the poorest, reduce unemployment and provide affordable housing.
Meanwhile, in the South London district of Camberwell, a former gang member was also holding the Treasury to account.
Questioning Nick Hurd, Minister for Civil Society, on the government investment in the HS2 high-speed rail network, David asked: “Why is £50 billion being spent on super-fast railways from London?
“Why do we need to get to Manchester in an hour?
“These plans are for people who make £100k a year, cos only them kind of people need to be in two places at once,” The Evening Standard reported.
Amid reports that Londoners are being priced out of their city and announcements of nerve-racking bill hikes by four of the “Big Six” energy companies, Chancellor George Osborne reassures us we are on a “path to prosperity”.
This sounds like the “trickle-down” theory of economics defended by Chief Secretary to the Treasury, Danny Alexander, on The Andrew Marr show today:
“There is only one way to get to a position where living standards are improving. And that is to make sure we have strong and sustainable economic growth,” he said.
Trickle-down economics holds that reducing taxes on the highest income earners fuels economic growth. But this theory depends on the rich sharing their wealth.
Crony capitalism performed by fatcat energy companies monopolising the market and government policies like HS2 designed to benefit the wealthiest defy those premises.
“Britain may be getting better off, but people keep getting poorer, as the costs of essentials continue to grow much more rapidly than incomes.”
Morgan explains that there are two different economies at play in the “richer economy, poorer people” dilemma. One is the “‘real’ economy of energy, resources, labour, goods and services”; the other is the immaterial “‘financial’ economy of money and debt.”
Since money represents a “claim” on the “real economy”, Morgan expands, a policy of perpetual growth is unsustainable because it works on the premise that natural and human resources are infinite.
As once low-cost energy supplies are becoming increasingly difficult to source, it is inevitable that energy costs will increase:
“Once we understand this, the squeeze on household prosperity becomes far less of a mystery,” Morgan concluded.
The rising cost of living is now the big UK political debate; increasingly posing a barrier to government hopes of basking in the glory of having pulled the economy out of the red.
Labour leader Ed Miliband’s call for a freeze on energy prices was laughed out of the Commons by Conservatives who dismiss any interference with corporate interests as “Marxist” revolutionary drivel.
Cameron is missing the mark. Miliband should be praised for offering real solutions to the cost of energy as winter threatens to put record numbers into fuel poverty.
It will take a brave politician to expose the unsustainability of this week’s rosy growth figures.
Miliband has not loudly critiqued the growth model. But a recent speech where he suggested putting growth on hold for six months in order to tackle climate change proves the Labour leader understands the urgent need to invest in natural resources:
As winter draws in and more Brits start wondering when national economic “growth” will help with their fuel payments, an opposition party prepared to expose the crisis of natural resources might be rewarded.
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