Seumus Milne writes:  Austerity fails on its own terms.  Now we know for sure George Osborne’s economic plan has failed, even on its own account. For all the self-congratulation about credit-fuelled growth, the recession in wages goes on. Four years into the coalition, most people’s living standards are still falling. Last week it seemed as though pay might have finally overtaken prices. But yesterday’s figures showed that real earnings fell by 1.6% over the past year. That continues the longest drop, of seven consecutive years, since records began in Victorian times.

Now we know for sure George Osborne’s economic plan has failed, even on its own account. For all the self-congratulation about credit-fuelled growth, the recession in wages goes on. Four years into the coalition, most people’s living standards are still falling. Last week it seemed as though pay might have finally overtaken prices. But yesterday’s figures showed that real earnings fell by 1.6% over the past year. That continues the longest drop, of seven consecutive years, since records began in Victorian times.

The fall in living standards is greater still for the poorest, who effectively suffer higher inflation. Add in the fact that business investment as a share of national income and productivity are still declining, and no wonder David Cameron’s red lights are flashing. Of course the Tories like to boast about employment growth. But since only one in 40 of the new jobs are permanent, the number of people in enforced part-time work has doubled to 1.3 million, and there has been an explosion in artificial self-employment, the experience on the ground is something else entirely.

The most spectacular failure, however, is in the government’s central economic objective – for which all the pain was supposed to have been endured. After four years in office, the budget deficit and debt are growing, when the original plan had the books as good as balanced by now. The government’s core policy has failed on its own terms – let alone anyone else’s.

A crucial factor in that failure is falling wages and job insecurity. Cuts in real pay and growing low-wage employment have meant lower tax receipts and greater demand for benefits. Almost all the pain of benefit cuts for the most vulnerable has come to nought.

If cuts aren’t working, and low pay and insecurity are shrinking tax revenues and boosting benefit costs, you might think that would be cause for a change of direction. Not a bit of it: £50bn more cuts are lined up for the next parliament – and the government is doing everything to drive down wages and job security still further.