First time UK has got poorer between elections, say Tories

Published on Tuesday 23 February 2010 21:42

THE Conservatives will today announce that Labour's record on the economy will be the key election battleground by unveiling new figures which show Britons are poorer than they were in 2005.

• George Osborne claims Britons are poorer than in 2005. Picture: PA

In a keynote speech, shadow chancellor George Osborne will unveil data his party says proves Labour has mismanaged the country's economy.

For the first time ever, the Tories say, GDP per head in the UK will be lower than at the previous general election.

After several days in which David Cameron has sought to make Mr Brown's personality an election issue, he will turn to policy, with a direct challenge on Labour's economic stewardship.

Mr Osborne's speech comes just a day after the governor of the Bank of England, Mervyn King, gave another gloomy prognosis on the UK economy.

Speaking to the Treasury select committee, Mr King refused to rule out pumping more money into the economy – so-called quantitative easing – adding to the 200 billion the Bank has already injected. He told MPs on the committee that world demand remained "fragile", while the eurozone recovery "appears to have stalled", threatening UK exports.

Against a continuing pessimistic economic outlook, Mr Osborne will today say that Britons will be poorer at the end of an electoral cycle for the first time in modern history – despite promises in Labour's 2005 general election manifesto that they would deliver "increased prosperity, not back to boom and bust."

According to GDP figures taken from the Office of National Statistics by the Tories, output per person has fallen by 281.

The only other time this happened was the shortlived parliament in 1974 when output dropped by 14 per head between the February and October polls.

Mr Osborne will also claim that the figures show Conservative governments have produced the highest growth, with the same set of figures highlighting an increase of 2,155 per person during the John Major government from 1992 to 1997.

Speaking ahead of the speech, Mr Osborne said: "When people ask the famous question 'Are you better off than you were five years ago?' Gordon Brown is the first Prime Minister in modern British history who has to answer no.

"Labour's 2005 manifesto promised 'increased prosperity'. That is the biggest broken promise of all. Even through the dark days of the 1970s and the recessions of the early 1980s and 1990s the growth of GDP per capita was sustained in every full parliament."

But Mr Osborne's speech came as the International Monetary Fund backed Labour's policy of maintaining the current fiscal stimulus until there was firm evidence of a recovery. Labour have claimed that the Tories would start cutting immediately.

Chancellor Alistair Darling said

: "The IMF's report is further evidence that David Cameron and George Osborne have neither the experience nor the judgment to be trusted with the economy. The IMF agreed the government's approach is the right one."

HOME LOANS DROP TO LOWEST LEVEL SINCE 2001

MORTGAGE lending slumped to an eight-and-a-half-year low during January as the housing market suffered a lull following the end of the government's stamp duty holiday.

The major banks advanced just 8.02 billion last month, 26 per cent down on December's figure and the lowest level since May 2001, according to figures released by the British Bankers' Association yesterday.

The group blamed the fall on a combination of people rushing through purchases during December to beat the end of the stamp duty holiday, and the wintry weather during January hitting market activity.

Lending had been unusually strong during December, with advances totalling 10.92bn, the highest figure for more than a year, in a traditionally quiet month for the housing market.

The rise was attributed to people buying lower value homes pushing through purchases before the stamp duty threshold fell from 175,000 back to 125,000 at the beginning of this year.