“Economic recovery” is a phantom for 98% of the population, experts say
Published by University of Leicester Press Office for University of Leicester in Education and also in Central Government
The 1.9% growth in the British economy announced yesterday has been dismissed as a “phantom for ordinary people” by economic and management experts at the University of Leicester.
Academics in Leicester’s School of Management challenged claims by Danny Alexander, the Chief Secretary to the Treasury, that economic growth in the UK is “well under way” and sustainable.
Professor Martin Parker, the School’s Director of Research, commented: “My question is ‘what has changed?’ All the indications seems to be nothing much.
“We have the superheating of a south east property bubble, a government and opposition that worry about upsetting the city, no substantial changes in banking regulation or reward, routine tax avoidance by wealthy people and firms.
“There’s little in this so-called recovery to help ordinary people - though it means Russian oligarchs can continue to park their money in property in London with returns of something like 8 per cent.”
Professor Parker added that while there is evidence of short-term profit taking, there is little of any long term investment in manufacturing or regional economies.
The Office for National Statistics announced a 0.7% growth in the fourth quarter of 2013, bringing the annual growth rate to 1.9%, the strongest since 2007 before the financial crisis.
But Dr David Harvie, the School of Management’s senior lecturer in finance and political economy, says economic growth as defined by the ONS tends to benefit only the elite, not 98 per cent of the population.
“Far from indicating a sustainable economic recovery these figures are mostly about consumer confidence, the easing of credit and rising house prices in London and the south-east. That’s not very helpful if you live in London and don’t own a house,” he says.
Professor Parker and Dr Harvie have collaborated on a new book The Companion to Alternative Organization, which suggests that conventional capitalist business and economic models are flawed, and there is a need to consider alternatives.