The Autumn Statement that George Osborne presents to Parliament on December 3 will be the last of his chancellorship. On any objective assessment it has been a disastrous period in office. 

Yet the Chancellor himself and the overwhelming majority of the media will claim all sorts of spurious successes under the coalition. There is an enormous gap between the claimed successes and the reality. 

Economic policy is fairly easy to evaluate. The purpose of economic policy is, or ought to be, the optimum sustainable improvement in the living standards of the population. 

Whether growth is measured by GDP or any other indicator, it is only a means to an end, which should be the living standards of the overwhelming majority.

Looked at in this way it is easy to see that the policy has been a disaster. Big economic downturns are frequently followed by fairly rapid recoveries. 

Before the crisis there was a prolonged period of slow growth followed by the sharpest recession since the 1930s. But the Office for National Statistics (ONS), which is the leading agency that provides economic data, is quite clear that this “is the weakest recovery since records began in 1948.” 

This is a hat-trick for neoliberalism.

This reality runs counter to the Osborne claim that we are experiencing a strong recovery. 

In fact, the imposition of austerity policies in June 2010 almost led directly to a “double-dip” recession, which is itself extremely unusual and would have followed the biggest downturn since the Great Depression. 

Most sectors of the economy did turn down once more. 

Agriculture, manufacturing and construction all contracted once again as austerity began to bite. Only the services sector of the economy grew, because of the “Olympics effect” in mid-2012.

It is the fall in living standards which rightly concerns the vast majority of people. 

Taking inflation into account, real wages have fallen for the most prolonged period since the Victorian era. Work-related pensions have been slashed and public services have been cut by the greatest amount since Margaret Thatcher.

In the face of the weakest recovery on record and the biggest fall in living standards, how is it even possible for Osborne and co to talk of a strong recovery? 

Government policy altered mid-Parliament. 

The “omnishambles” Budget of 2011, which saw a series of austerity measures alongside tax cuts for the rich and for companies was a political disaster for the coalition parties. 

The Tories went from over 40 per cent in the polls to 30 per cent. 

As a result policy was changed. While austerity has been maintained, very few new austerity measures have been announced since then. 

Instead the government introduced a whole series of measures to boost consumption, the most notorious being the Help to Buy scheme, which threw petrol on the raging fire of unaffordable housing. 

With real wages falling, the increased consumption was not sustainably financed by increased incomes. Instead borrowing was increased and savings have been raided. This is the growth that Osborne trumpets so loudly. But falling incomes, increased debt and lower savings actually makes people worse off. 

The Tories will reap no electoral benefit from the “recovery” as most people are worse off because of it.

The cause of the recession and the current stagnation is a private-sector investment strike. 

The British economy is now £57 billion larger than it was before the recession began in real terms. The only component of GDP which has not recovered is investment. 

It was this refusal of the private sector to invest which caused the recession and so taxes fell, causing a rise in the government deficit. 

This is why the government’s deficit is widening once again. A crisis of investment cannot be corrected by increasing consumption. 

The crisis would be intractable if there really was no money left. But British firms are sitting on a cash hoard of more than £500bn. 

This is held in British banks which are owned, licensed or regulated by the state. 

There is any number of ways of forcing them to invest. Regulation, taxation, nationalisation and instructions to the banks could all be used to create the investment, growth, decent well-paid jobs and public services that are needed.

The necessary economic policy is plain. What is lacking is the political will to enact it. 

Thatcherite notions of the inherent superiority of the private sector still dominate British politics, despite the spectacular private-sector failure of 2008 to 2009. 

Rather than banks and the rapacious firms such as Ineos being held responsible for the crisis, it is the public sector, public-sector workers or anyone who takes action for better pay and conditions who are demonised. 

In this reactionary fantasy world a key target is immigrants. In Britain the term immigrant does not refer to Aussie backpackers, US investment bankers or French IT specialists. It is always code for race. 

When it is established that there is no basis for the claims that immigrants are causing pressure on schools, public services or wages, the peddlers of racist myths change ground and argue it is about “cultural values.” This is code for racism, plain and simple.

The hue and cry over immigration or the demonisation of Muslims is a necessary component of the austerity project. 

Big business, the banks and government policy are the real culprits in the crisis. Naturally austerity supporters cannot allow this truth to become established. 

So there is a list of enemies — public-sector workers, nurses and firefighters have all been included. But the cutting edge of this reactionary offensive is immigrants and Muslims.

The People’s Assembly Against Austerity exists to unite all those opposed to austerity policies and to fight for an alternative. 

It rejects the reactionary propaganda of austerity supporters and places the blame for the crisis where it really belongs. 

The People’s Assembly events around the Autumn Statement are the next step in building this movement.

Michael Burke is one of the speakers at tonight’s Austerity Lies & Myths meeting at NUT Hamilton House, Mabledon Place, London WC1H 9BS. Starts 6.30pm. For info visit www.thepeoplesassembly.org.uk/austerity_lies_and_myths 

Protest: Tuesday December 2, Austerity Has Failed, Downing Street, 5.30pm www.thepeoplesassembly.org.uk/austerity_lies_and_myths