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Home » Economy, Policy

1930s Britain looms today

Submitted by on 22 Nov 2010 – 10:10

By Tony Woodley, Joint General Secretary, Unite the Union

It is clear that the coalition government is hell-bent on pushing through hard line austerity measures that will throw thousands of people out of work, hamper long-term economic recovery and decimate public services.

And what is so shameful is that the Liberal Democrats, who were supposed to be acting as a brake on the coalition’s excesses, have their foot on the accelerator with as equal vehemence as the Tories. The majority of the electorate did not vote for this cocktail of economic misery.

However, there is an alternative to the vision of ‘more radical reform than Thatcher’ espoused recently by civil service minister, Francis Maude.

Unite, the largest union in the country, needs to be at the forefront of developing an alternative economic strategy, based on sound Keynesian principles of using the state to pump prime economic activity and boost demand.

There are a number of avenues that need to be explored and principles to be established.

Firstly, drastic cuts in expenditure do not have to happen over the course of a parliament as envisaged by the Chancellor, George Osborne; they can be spread out over two or three parliaments.

There also needs to be a comprehensive programme of clawing back the billions that the rich have accrued through legitimate tax avoidance schemes. This would go a long away to reducing the immediate financial pressure.

Why does the nursery nurse or hospital porter on modest incomes have to pay for the mistakes of the greedy banking class and the City with their jobs?

There should be an overall plan to support manufacturing industry, with the emphasis on creating, not destroying jobs. People in work pay taxes contribute to the wealth of the country and individually have better mental health and self-esteem. They shop, go to restaurants and take in a film, ensuring that their money circulates in the system generating demand.

Millions out of work will still claim the much-reduced benefits on offer and be a drain on the public purse. What is the economic sense in that?

The coalition is in thrall to the markets and the credit rating agencies that got it so wrong with their ratings of banks in the run-up to the global financial crisis two years ago.

Whatever the markets say, Britain remains one of the richest countries in the world with a flexible and educated workforce. The factories, businesses, shops and services won’t disappear because a few City analysts, who are well-paid to speculate, do just that – speculate.

The attack on the public sector also does not stack up in economic terms. The public sector is an economic generator in its own right – and its importance to the economics of such cities as Newcastle and Hill should not be underestimated. When exports, manufacturing and services are faltering it is the public sector that is left holding the economic line.

Recent TUC research showed that 29% of public expenditure goes directly to the private sector; therefore, a 10% cut would mean a loss of £16.9bn to the private sector and 200,000 jobs.

The Association for Public Service Excellence (APSE) says that for every £1 of public money invested in public services through direct employment and purchasing of supplies and services, a further 64p is generated in the local economy.

And to muddle the waters, David Cameron has launched his Big Society idea with the supposed intention of mobilising thousands of volunteers (from where?) to take over responsibilities that are currently the state’s.

The reason the state has been fundamental to the improving health and educational standards of the population over the last century was because the ad hoc arrangements that has gone before, heavily reliant on charities and private philanthropy, were inefficient.

Up to 40% of army recruits to the Boer War were unfit for service because of rickets and other poverty-related diseases. This led to the setting up of the 1903 Committee of Physical Deterioration which recommended medical inspections for children and free school meals for the poor.

The attack on public services makes no sense economically and threatens a throw-back to a Britain where only the rich will afford the best health treatment and education, and everyone else will have to rely on the untested ‘generosity’ of the Big Society.

The electorate in May did not vote for the Cameron/Clegg austerity measures which threaten the social and economic fabric of the country in a way not seen since the 1930s. Time for an early government U-turn.