A look at the state of the UK economy under Tory rule

Since the Tories came to power in 2010, they have resided over one of the most bleak periods in UK economic history. With austerity, wage stagnation and 13 years of spending and investment cuts, below are five ways the Tories have wrecked the economy and the devastating effects they have had.

UK inflation highest in Europe 

“Inflation is the enemy, inflation is what makes people poorer.” These were the words of Rishi Sunak himself when he told Britons to “hold their nerve” as he said interest rates had to go up to deal with spiralling inflation.

In November 2022 food inflation in the UK hit a 45-year high, while in April 2023 the UK recorded the highest inflation rate in western Europe, the only country with double-digit inflation.  

Britain’s inflation remained above the US and much of Europe, falling since but at a much slower rate than other countries. Reasons have included a heavy reliance on imports for food and natural gas while exiting the EU has brought additional delays and higher costs to imports and exports.

Liz Truss’s mini-budget was calculated to have cost the country a staggering £30 billion and was said to have increased inflation, whilst also responsible for tax rises and spending cuts.

Shameful record on poverty

Recently a shocking chart revealed the extreme levels of poverty in the UK, with a report by the Joseph Rowntree Foundation revealing how there are 1.5 million more people in deep poverty than 20 years ago. 

It paints a bleak picture of modern day Britain, with recent warnings of increased levels of health inequality for pensioners who face poverty and a recent shameful UNICEF report revealing a 20% increase in child poverty in the UK since 2014. 

The government’s inability to provide adequate support to struggling households and address in-work poverty has left people and economy to suffer.

Growing wealth inequality

Inequality is on the rise in the UK, research by the Equality Trust found that by 2023 the richest 50 families in the UK held more wealth than half of the population.  

Compared to other developed countries the UK has a very unequal distribution of income, with one of the highest levels of income inequality in Europe. 

 Under the Tories, the gap between the richest and the rest of the population has widened since 2010, with the income share of the richest 1% increasing from 7% to 8.2%. Resolution Foundation found the wealth gap between a household in the top decile and the fifth decile increased by 50% from 2006/08 – 2016-18. 

Desperate wage stagnation

Waves of strike action have spread across different sectors in the last two years demonstrating a growing discontent about the condition of workers across the country. 

Occurring in the wider context of the rising cost of living, UK workers were reported to be £11,000 worse off after 15-years of “almost completely unprecedented” wage stagnation, the Resolution Foundation found, lagging behind similar economies like Germany. 

The real value of salaries has fallen over the decade due to “historically poor” wage growth which the TUC stressed has left workers across the country “brutally exposed” to the cost of living crisis. 

Households worse off

Analysis by the Resolution Foundation predicts that the average household will be £1,900 poorer by January 2025 then they were in 2019.

Families in Britain will therefore have been left generally worse off under the Tories due to sluggish economic growth, persistent inflation and higher taxes, the leading think tank said. 

In terms of housing, Shelter found the cost of a home in 2000 was four times the average salary, while in 2021 it has doubled to eight times more. 

Chancellor Jeremy Hunt will no doubt avoid mentioning any of the above when he announces the Spring Budget on 6 March and with it the latest outlook for the economy.

(Image credit: HM Treasury / Creative Commons)

Hannah Davenport is news reporter at Left Foot Forward, focusing on trade unions and environmental issues

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