THE BLOG
24/09/2013 06:32 BST | Updated 23/11/2013 05:12 GMT

The Penny Drops: It Is Back to Business as Usual

If you have ever been conned you will recognise the natural inclination of trying to convince yourself that you haven't - desperate to believe that you are not that gullible. For some time I have resisting the view that we have been 'done up like a kipper' when it comes to the economy. But we have.

Recently, the Chancellor of the Exchequer announced with cautious optimism from a building site in London that Britain is on the road to recovery. His choice of location was interesting; a development of flats that will sell for between £300,000 and £3,000,000. For me, it spoke volumes. This celebration of marginal growth, a rising stock exchange and house prices, in London at least, on the rise tells me that we are heading towards business as usual.

In the same week Liberal Democrat Danny Alexander, Chief Secretary to the Treasury, warned that we faced austerity until 2020.

Back in 2008 when the crash began, the country was persuaded that "we are all in it together". Our sacrifice, we were told, would allow the government the space to "re-balance the economy". No longer would our economy be driven by financial services and rising house prices, fuelled by excessive borrowing. Our society, thanks to the moderating influence of the Liberal Democrats, would be fairer.

Sadly, our sacrifice may have been for nought.

Although we are seeing some growth overall, average earnings have shrunk by at least 5% in the last couple of years. This leads me to conclude that growth must surely be driven by borrowing.

Even the Government's flagship housing scheme "help to buy" is really just a state-operated subprime scheme. Moreover, it is a scheme set to fail because housing affordability in the owner occupier market is predicated on income growth to be fully sustainable, and no one's income is growing right now. When rates rise, as they must, thousands of home owners will yet again find their mortgages too big to manage.

The contrast of the Chancellor's venue of choice for his latest announcement with the words of Danny Alexander that austerity will continue until 2020 tells me that London will thrive while the rest of us continue on the path of sacrifice as local services and economies go to hell in a handcart.

Perhaps it's a matter of expectations. When the government spoke about rebalancing the economy and about fairness, I anticipated a reduction in reliance on financial services, lower leveraging on house buying and the sharing of opportunity, so that London no longer had the ability to break us all. Instead, we are witnessing the return of the City where borrowing heads for the hilt and the capital absorbs investment from the government and the private sector.

The government is keen to point out how the rest of the country stands to benefit from ongoing investments and, not least, the promise of HS2. Unfortunately they are missing the point. The greater part of Great Britain lies outside of London something the country's investment strategy should reflect more accurately. As it stands, it feels like the regions are being fobbed off with the crumbs from London's table.

HS2, a solution so far in the future it is irrelevant, will merely render us the dormitories for the city of London. The money would be better spent on tax breaks for businesses to relocate from London to some of the country's other great cities, and on measures that reduce the strain on rail capacity. We live in the 21st century; a world where technology is drastically reducing the need for travel. Colleagues who were previously next door can now just as easily be at a desk at the other end of the country.

Aside from stronger financial regulation, we have just gone back to the way things were in every way that matters. The Chancellor celebrates while still borrowing £13billion each month. The economy is in poor shape. But the City thrives.

Somehow it doesn't feel as if we are "all in it together". If we truly are, then let us hear the next announcement about economic recovery from a buzzing business park in Manchester filled or a thriving social housing estate in Sheffield. Let the announcement follow a trend of rising wages, a drop in the dependence on food banks and phasing out of zero-hour contracts. Show us the evidence that the government is re-balancing the economy. Perhaps then I will feel less conned.