What a difference a year makes, superficially at least.

In September 2013, the word recovery was still uttered sotto voce, as if to say it louder would jinx it. Even the Chancellor George Osborne was tentative, venturing the economy was "turning a corner", but heavily caveating his remarks with phrases like "plenty of risks" and "early stages".

He has allowed himself a few Cheshire cat grins since then, as official statistics have shown unemployment falling and growth accelerating. In July this year, Mr Osborne trumpeted Britain's GDP figures, showing the UK economy is now 0.2 per cent ahead of its pre-crisis peak, and said his economic plan was delivering "economic security and a brighter future for all".

Loading article content

But is that actually true? Hardly. The truth is that millions of people are being denied a share in the returning prosperity. The latest indications came yesterday in the form of figures from the Trades Union Congress (TUC) showing how many more people are underemployed now than before the recession, stuck in part-time or zero-hours contracts when they want to be working full-time or near full-time. The TUC calculates nearly 3.4 million people across the UK are in that position and estimates a million more are underemployed now than before the recession.

The result of all this is depressingly predictable - that households struggle to keep going financially. In-work poverty has become a huge spectre at Mr Osborne's feast, with a slew of reports highlighting it as a growing problem, including the Poverty and Exclusion in the UK Project last month, which found that almost half of all working-age adults in poverty are in work.

The Government disputes aspects of the TUC figures, but it is clear millions are stuck in low-paid, part-time, temporary work, or on zero-hours contracts, or are earning just a few thousand pounds a year in a self-employed capacity. For the Government, this has one obvious advantage: no matter what the quality of their jobs, these individuals are off the unemployment list, allowing ministers to hail their success in getting Britain back to work. But it is a Pyrrhic victory if those newly employed people cannot afford to pay their bills or feed their families each month without going into the red.

The signs of financial stress on households are legion. Yesterday, the UK's biggest debt charity StepChange revealed the number of people having trouble repaying payday loans - often taken out to cover a shortfall in household finances at the end of a month - had risen by more than 13,000 in the past year. Meanwhile, food banks are doing a roaring trade. It is perhaps fitting the word "recovery" should be muttered under the breath.

The economy as a whole is improving, and that is good news, but too many people are being left out. There is a real danger this epidemic of underemployment could become permanent, and that would be a serious indictment of Mr Osborne's much-vaunted economic plan.