The Artificial Recovery or ‘How I Learned to Stop Worrying and Love the Recovery’

Will Humphries

Last week, I visited canary wharf – my sister wanted to cash a cheque, and the nearest bank was the monolithic HSBC building there. We thought it might be interesting to see inside the bowels of the finance industry, but predictably a security guard turned us away with brusque directions to the nearest high street branch. The trip wasn’t wasted though; I got a chance to appreciate the eerie otherworldliness of London’s banking district, the workplace of those fortunate enough to have benefited from the Tories’ plan for economic recovery. The sense of alien levels of wealth emanating from every luxury car and designer suit was completed by the multi-million pound Crossrail Place, a spacious oasis of topiary, wooden walkways and play-me pianos – all paid for by the treasury. The venue is a celebration of the Crossrail infrastructure project, and implicitly a monument to Tory success. It hosts free opera and ballet in summer, if you’re one of those who gets invited, and was designed by the most fashionable and talented architects. It was delightful, yet against the backdrop of widespread child poverty, tax credit cuts, falling living standards nationwide, and growing inequality it was somewhat obscene. The whole thing reeked of ‘let them eat cake’.

Londoners don’t need free opera on the taxpayer’s money as much as they need affordable housing and rent control. Few scraping a living below the living wage in a high rise will have the time to enjoy the Tories’ government-funded shrine to economic progress, because this ‘progress’ has left them behind. The money spent here would have been welcomed by millions if used to assuage the damage to living standards across the UK, by investment in areas which do not currently enjoy great wealth; but Crossrail Place, and more significantly Crossrail itself, is a perfect example of the programme of artificial recovery pursued by the Conservative government. To clarify, this refers to the prioritisation of areas, geographical, economic and social, which will yield the necessary figures to declare economic growth, at the expense of those areas which desperately need attention and face real human suffering. The artificial recovery is creating an illusion of prosperity, which obscures the reality of what is – at best – an unimproved situation for vast swathes of the country.

The funding of superficial projects, and the focus on already successful areas of the economy such as London and the financial sector, certainly creates both the image of a recovery and an actual positive growth in the GDP of the nation, and it is not at all off-putting for the Conservatives that it also happens to protect their leaders’ vested interests and perpetuate the comfortable lives of the upper level of society. One easily milked economic sector flourishes, lifting GDP; the unfortunate are left in the cold, their income stagnating as their plight is concealed by the figures. The catch is that whilst the government undertake window-dressing of this kind, they apparently intentionally are neglecting to address the genuine problems affecting the majority of UK citizens, and in doing so increasing the danger many face to their livelihoods, prospects and families. If there is an illusion that the public’s problems are being addressed adequately, it can only be called a misdirection of attention, which would inflame these problems by side-lining their victims. This is the effect of the artificial recovery.

Recently the government decided that child poverty should not be defined by income, but by whether the child’s parents are in employment. If a child’s parent is employed, they can’t be classed as living in poverty, which naturally had the effect of decreasing the official extent of child poverty in the UK. This comes at a time when fractionally less than 25% of all UK jobs outside London have been found to pay less than the independently determined living wage, and as such would previously have qualified as below the poverty line. By next year, tax credit cuts that have been implemented will contribute to the affected households being, on average, £1,800 worse off per month. The tax credit cuts, of course, are only applying to the lowest paid employees nationwide. These facts illuminate the reality of the economic situation in Britain. Almost a quarter of working households outside London earn insufficient income to achieve acceptable living standards, and they will be hurting more next year due to tax credit cuts – but the figures won’t show the threat this poses to the safety and wellbeing of children in these households, as their hardships increase, along with the odds stacked against their success in the future. These children will be raised in the very definition of poverty, with a household income that falls short of the cost of living, and worse, will decrease significantly in the near future. But I’m sure they will be as pleased as George Osborne is that they are not officially impoverished.

This is a brutal but apt example of an artificial ‘fix’ to a grave and serious danger facing those on lower financial rungs. The result is nothing but a misrepresentation of the truth, and an exacerbation of the problem in hand by doing so. Child poverty is just one of the areas needing attention which is being subjected to this treatment, and subordinated to areas which yield juicier results. Geographical areas are prioritised with an innate imbalance, London soaking up infrastructural investment and leaving the long-promised, and greatly needed, improvements to Northern rail connections unfunded. Economical areas such as the steel industry urgently need government intervention, as do the thousands of low and middle-earning workers relying on this industry, but the lucrative and exclusive financial sector receives the special treatment and access to tax breaks at the expense of the steel industry and all the rest. Whilst ignoring areas – geographical areas such as the North East, areas of the economy such as the steel industry, and areas of society such as the employed poor – afflicted by the vagaries of the economic downturn, allowing them to wither and their problems to worsen, the government simultaneously destroys or conceals the evidence. So it was in the case of child poverty, a straightforward deletion of the problem from official records. Other instances of government neglect are dealt with superficially with distraction techniques and inadequate fig-leaves; eye-catching prestige projects such as Crossrail, and the wholly insufficient promise to provide £20 more per week in welfare to families affected by working tax credit cuts spring to mind.

Explanations for this strategy do exist; I will (probably needlessly) admit to some personal dislike for the sort of politics that seems not to be based in a desire to achieve what must be the ultimate goal for all politicians: the welfare, quality of life and interests of those who they represent, meaning the majority who voted for them and not the billionaires who finance them. Despite this, even I can see the argument that projects like Crossrail, its crown jewel Crossrail Place, and the in-progress HS2 train connection make economic sense from a Keynesian point of view; an injection of government cash into the free market, providing jobs, moving money from one pocket to another, and giving consumer confidence a boost. It’s the financial equivalent of using jump leads to start a car – you put in a little bit of energy to get it started, until it turns over under its own power. This does apply to Crossrail and HS2, but there are serious qualifications to its relevance here. The most surprising is the decision to auction off the contracts for both to Chinese firms, as opposed to British contractors, purely because this will negate a notable amount of the positive effects of government investment in public works. A substantial amount of the money generated in the private sector will be haemorrhaging out of the UK economy, and going to China; although maybe we should be less surprised at this handout to Xi Jinping and Chinese industry given the recent romance between his regime and the Conservative government.

The least surprising qualification to the Keynesian benefits of these undertakings is the London-centric mind set; the city is the main recipient of investment in these cases, as Crossrail doesn’t even leave its limits, and HS2 is aimed at enabling greater custom for its airports from the Midlands. As is a running theme of government policy, London’s status as a financial haven guarantees it receives all the attention – its ability to produce the right results for the government’s figures tempts the money away from areas crying out for investment. A public works project worth billions such as this in Hull, Liverpool, or Tyneside would unrecognisably change these areas, and rescue the fortunes of thousands overnight – but who cares? The figures are still right, why should we waste the money saved from tax credit cuts on the people who actually have to pay these taxes? They’ll only spend it on fags, probably. Better to put it where everybody can see it. Seeing as the city corporations withhold upwards of £83 billion from the public’s purse in tax per year anyway, it could easily seem futile to deprive them of other favouritisms. Just as long as the needy stay needy, they won’t bother those for whom the recovery is less of a rescue from poverty than a boost into the stratosphere.

Will Humphries

Sharing is caring!