The International Monitory Fund (IMF) have adjusted estimates for economic growth. Whilst growth worldwide is projected to fall, the IMF now predict UK growth to rise faster than its previous forecast.
The IMF says it expects the world’s economy to grow by 2.9 percent this year—below the 3.2 percent recorded last year. Growth is likely to be driven by advanced economies, while the performance of emerging markets will be weaker than expected.
Osborne has seized on these new projections as further evidence that the UK is on the right track, and as a justification of the governments austerity programme. But is 'growth' the best measure of social and economic well being? Isn't it time we learnt the lesson that the answer to that question is that it is not?
Economic growth is 'good' because it leads to increased jobs and wealth. But distorted growth can lead to greater economic inequality and increased social injustice.
There is an argument that if the wealthiest get richer then the poor benefit from some kind of trickle down effect. It was an argument deployed in Thatcher's time. Look after the rich and somehow the poor will benefit. It doesn't work. The poor simply get relatively poorer.
In a sense this is obvious. Consider housing. There is more to be had from building houses for the richer middle classes than providing decent housing at low cost for the poor. As the middle get richer, house prices rise and push homes out of reach of the poorest. This is why we need more social housing.
I should make it clear that I am not advocating an equality of poverty; that we should all be equally poor. But the wealth of the few based on the poverty of the many should not be justified. The headline figure for economic growth will be good for the coalition in the UK, but their austerity programme has been divisive and ethically questionable. The poorest and most vulnerable have been made to pay the most for the sins of the banking crisis.
Lessons not learned
There is little in the economic statistics to suggest the lessons of the banking crisis have been learned and acted on by the government. We seem once again to be on course for a boom and bust approach. Little has been done to readjust the economy. As before, growth will be predicated on increased demand fostered by increased personal debt.
Social Justice as an economic goal
We need a strategy for growth that puts social justice as its prime objective. This is signally lacking in a government approach that seeks to drive the poorest from their homes with a 'bedroom tax'. The austerity approach has been indiscriminate and hits the poorest and most vulnerable.
Growth in employment has been achieved largely with more people working part time for wages that are often below the minimum. This is what drives 'welfare dependency', not a feckless work shy culture as the government would have us believe.
Growth must also be sustainable environmentally. The government's message on the environment is mixed at best with the apparent abandonment of 'green' targets for energy. And this leads me to the greatest warning about 'growth'.
Good growth has to be sustainable and environmentally sound. Yet forecasts suggest a looming energy crisis with the energy supply regulator Ofgem predicting energy shortages by the middle of the decade. This is not the stuff of sustainable growth.
As energy prices are set to rise, the government will have difficulty persuading consumers of the benefits of forecasts for growth.
Figures issued by Ofgem (see diagram) show the increasing gap between wholesale energy prices and the price to the consumer. The energy companies are ripping off their customers. Since 2010 fuel bills have risen disproportionately to the wholesale costs. So much for the benefits of growth for hard pressed families!