Wage increases halved, and working houses in poverty more than doubled.
The growth of the GDP and living standards were significantly slower in countries with austerity-driven policies than those without following the financial crisis according to a new report by the Trades Union Congress (TUC).
Lessons from a decade of failed austerity reviewed how the UK and other countries impaired growth following the recession, and implored the government to learn from the mistakes as another potential recession looms alongside Brexit.
According to the report, wage growth has halved since the crash, and UK workers were most affected with annual real pay growth averaging less than 1 percent.
The number of working households living in poverty in Britain also increased from 5 million to 8 million, the report stated.
So what needs to happen?
TUC insisted that to get back on track the UK but conduct a review of how the Office for Budget Responsibility and Bank of England judge the impact of government spending on the economy.
They also called for a Fast-track increase to UK public infrastructure spending, which should be financed by borrowing rather than increased taxation in order to strengthen the economy.
TUC General Secretary Frances O’Grady said of the report:
“Austerity was always a political choice. It’s now clear how much harm it caused, holding down economic growth and living standards.
“We can’t afford to make the same mistake again. If there’s another crisis, the government’s response must be to focus on public investment to make our economy stronger.
“But we shouldn’t wait for the worst to happen. The best way to deal with a recession is to prevent it. There are already warning signs, so the government should act now by boosting public sector pay and spending on public services.”
Meka Beresford is a freelance journalist. Follow her on Twitter.
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7 Responses to “Austerity policies slowed growth after recession, report says”
Patrick Newman
Mr Carey for the sake of completeness just where did you get that figure from. Austerity (i.e. Osborne’s long term economic plan) began in the year 2011 – 2012 local government was handed a 40% reduction in revenue support grant. If correct it is worth asking where the money went because it clearly did not go to health, education, social services, police, prisons, road maintenance. There is the possibility that cuts were counterproductive – budgets can be cut but not always expenditure! Austerity was a political endeavour – not a beancounting exercise!
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