George Osborne has welcomed the advent of deflation like an early summer windfall.

He believes it will make life a little easier for all of us. This tiny truth is in contrast, as too many already know, to anything the Chancellor has achieved in the slowest recovery Britain has ever experienced.

Never fear. Yvette Cooper, candidate for Labour's leadership, says her party should stop opposing cuts to corporation tax. It counts as another contrast. Only last year Labour were denouncing Scottish National Party plans, since abandoned, to reduce the hellish burden on big firms. Ms Cooper wants to be nicer to business people. As a bonus, they need fear no tax on their mansions if she takes charge.

Their terror of a 50p tax rate has already been banished with Mr Osborne's return to the Treasury. Those who have "non-dom" status are safe from meaningful taxation once more. Now they can sit back and wait for another of the Chancellor's emergency budgets in which he will set the right's world to rights by taking another £12 billion off the benefits bill.

In Conservative circles, they will call cuts an incentive to work. Who could object to that? Not those who turn up in survey after survey complaining because they can't get enough hours. In better than one third of households, thanks to low pay and short hours, making ends meet means a reliance on some form of benefits. Those would be the very benefits from which Mr Osborne intends to take another pound of flesh.

In his United Kingdom, contrary to campaign rhetoric, subsidy is king. Pitiful pay has become normal thanks to state aid from which employers gain most. A crisis stemming from "affordability", that nice euphemism, meanwhile keeps working people precariously housed and hands billions to landlords. And cutting benefits to those trapped is passed off as a solution.

Last week, just after the election results were in, the Bank of England revised its projections for productivity, GDP and living standards. It was not an upwards revision. In the words of the BBC's Robert Peston, "a disproportionate number of new jobs in the economy are lower skilled and less productive". You needn't guess at the wages such jobs attract.

A BBC Scotland investigation has told part of the story. It could find only 10 of the country's 50 biggest employers prepared to say they pay all staff the Living Wage of £7.85 an hour. The other firms, you can guarantee, are content to see their workers subsidised by the state, delighted to accept Ms Cooper's corporation tax offer, and relieved that the spirits of executives will not be crushed by a 50p tax rate.

British productivity is diabolically poor. Some economists call this a puzzle. Wags remind you that a French worker, raised in an "unaffordable" social security system, could take every Friday off and still produce more than a British counterpart. How can this be, given the jobs miracle of which Mr Osborne boasts? Perhaps because we have a jobs market crippled by low pay and corporate subsidy junkies. Too few jobs do the economy or employees much good. And the state papers over the cracks.

Where are we now? In the Chancellor's version, recovery is upon us. Private sector wages (though not public) are rising. Strip out bonuses, for those who get them, and the numbers look less impressive. The Economist says net disposable income per person in the UK is still 5.1 per cent below "pre-crisis" levels. Just before the election, the Institute for Fiscal Studies maintained that average household incomes were back - just - to 2007/08 levels in 2014/15. They were still below what was achieved in 2009/10.

Such numbers - averages, after all - hardly speak of an avalanche of prosperity seven years after the bankers' crisis. Mr Osborne welcomes deflation because he knows perfectly well that falling food prices have mitigated the effects of his policies. They have not stemmed the flood of people in need of food banks, but a Chancellor with £12bn of unspecified benefits cuts on his "to do" list loses no sleep over that. So what does he think follows if he again reduces his low-pay subsidies?

In a tight contest, Henry Ford was perhaps the most unpleasant tycoon of the 20th century, but he was no fool. He paid his assembly line workers top dollar betting he would get his money back when they bought the Model Ts they had slaved over. He didn't lose on the wager. Tesco, with a market capitalisation of £18bn and 510,000 employees worldwide, declines to pay the Living Wage. The firm has had well-reported troubles lately. So where would its hundreds of thousands of UK supermarket employees do their shopping?

The Citizens UK charity, campaigning for the Living Wage, sheds a little light on corporate benefit addiction. It calculates, first, that taxpayers subsidised low pay to the tune of £11bn last year. Of those in work, 22 per cent had their pay "topped up", even when their employers were doing very nicely. Secondly, the campaign asserts that Tesco, specifically, enjoyed £364 million of this benefit in 2014. The firm's corporation tax bill - the one Ms Cooper is happy to cut - was £519m during the last financial year.

In the language favoured by the likes of Mr Osborne, Tesco is a wealth creator. In a most particular way, that's true. But those who cheer on the Chancellor as, once again, he sets about the feckless, might pause for a second. Where's the economic sense in giving one third of a billion in subsidy to an £18bn company if all you do is encourage low-pay, depress consumption, and deepen in-work poverty? Forget morality: how does that resemble a free market?

There is no such thing, of course. But it takes a special sort of myopia for a consumer society to impoverish millions of prospective customers while wondering why productivity in UK plc is a bit of a puzzle. When people have no security in their jobs, earnings, or homes, another corporate tax break is utterly beside the point. Unless, that is, the only purpose is to strip wealth from the majority for the benefit of the minority.

That can't last. Astonishingly, the International Labour Organisation (ILO) estimates that, globally, only one quarter of workers are on permanent contracts. It should keep those infernal labour costs down, for a while, but as the ILO adds, politely, it also risks "perpetuating a vicious circle of weak global demand and slow job creation". When you have a Chancellor whose only strategy is to take demand out of an economy, that's lethal.

At the end of it all there are working people for whom the difference between the minimum wage and the Living Wage is the difference between survival and disaster. Mr Osborne would like their gratitude for a bout of deflation he neither engineered nor expected. Ms Cooper seems to think they will be consoled if she says nice things about the employers who keep them in penury.

Both politicians can talk endlessly about fairness. Where the social contract of fair pay is concerned, silence follows.