Chancellor George Osborne’s assertion that British economic recovery has reached a ‘major milestone’ is naive, according to a Oldham MP.
Statistics released by the Institute for Fiscal Studies (IFS) yesterday suggest that average household incomes have returned to their pre-crash levels for the first time.
However, Oldham East and Saddleworth, Debbie Abrahams says this one-dimensional view of economic growth does not take into account the impact of inflation for the period between 2007 and 2015.
Mrs Abrahams said: “It’s a bit too simplistic for George Osborne to say the IFS findings, mark ‘a major milestone in our recovery’ when, actually, incomes for working age people are still below their 2007-08 level allowing for inflation.
“This is set to be the first time since the 1920s that people are worse off at the end of a parliament than at the start.
“We need a recovery that improves people’s earnings across Britain, not one which has left working people worse off.
“Boosting the UK’s productivity is key to improving our living standards which is why the APPG/FSB report is so important to this process.”
The All Party Parliamentary Small Business Group (APPG) and the Federation of Small Businesses (FSB), the UK’s leading business organisation, released a document identifying drivers to boost productivity.
The seven areas highlighted include: incentivising business investment, providing universal access to high quality and affordable broadband as well as investing in regional growth.
It also recommends supporting innovative businesses, addressing skills and training shortfalls, implementing an ambitious public procurement policy and increasing the number of businesses exporting.
Labour MP Abrahams, who recently won an FSB Business Buddy award, insists that despite recent improvements there is a lot of work yet to be done.
“FSB research shows that small firms’ productivity levels finally began to turn a corner at the end of 2014, but there is still a long way to go,” she added.
“We keep telling small businesses they are the backbone of the UK’s economy and as MPs we must continue to work together to find ways to help them.”
On the cross-party report, the FSB National Policy Chairman, Mike Cherry, said that improving productivity was not just a private sector concern.
“The next Government has an important role to play in addressing this long-standing weakness, regardless of which party or parties form the next administration,” he said.
“Closing the productivity gap is the best way to boost the long term health of the UK economy.
“It is key to reducing the budget deficit, and delivering higher wages and living standards.
“These efforts require a long-term effort and focus, which is why the FSB is arguing for the establishment of a UK Small Business Administration.”
Image courtesy of BBC Parliament via YouTube, with thanks.