Labour’s at least half right to explode the Tory economy bubble by exclaiming: Recovery? What recovery? OK for bankers’ bonuses, OK for City private equity, OK for investors’ share indices, OK for Treasury austerity enthusiasts. Yes, fine for the top 1% – that’s 300,000 individuals out of the UK’s 40 million adults. But what about the other 99% whose average income in real terms has fallen 5.5% since the 2008-9 crash? That’s a reduction of £1,250 a year for the average family. Worse, it’s not all over. Some of the most draconian measures in Osborne’s entire package are back-end-loaded, i.e. they will hit families hardest in 2014-18. Unemployment is still stuck around 2.5 million, and youth unemployment among 18-24 year olds is still rising at over 19%. Even of those in work, a significant number are now part-time workers so that the number of whole-time-equivalent employed persons is actually steadily falling. There are now over 900,000 persons who have been out of work for more than a year. And while inflation has marginally crept down to 2.7% on the latest figures, that is still more than twice the rise in pay which is still pegged back at 1.1% a year. Some recovery.
But all this still has to be put into context, which is why Labour is only half right. What Labour is still failing to say, and to shout out loud as Andy Burnham so rightly put it, is that it need not have been like this at all. The deep recession was caused by the bankers’ bail-out, not at all by Labour over-spending, yet the super-rich (including especially the bankers) were never made to pay the price of their own folly, and instead the Tory political machine and Tory press managed to fix the blame on Labour and thus to justify hitting the Labour and trade union heartlands with a decade of cuts savagery unprecedented for more than a century. If the assets held by the top tenth in the country (amounting to some £4.5 trillion) had, against the background of the national crisis, been charged to capital gains tax at the current rate of 28%, it could have paid off the entire national debt without any pay cuts, job losses, housing benefit caps, bedroom taxes and all the rest for the victims of the bankers’ ramp. Wouldn’t that have been fairer?
But there’s one other thing Labour can and should do to drive the point home and to mobilise the population behind the party. Not only should MPs not get an 11% rise in pay as recommended by IPSA, they should submit to the same cuts as the rest of the electorate while this crisis lasts: a 5.5% cut in pay which only rises when the nation’s average rises.