People need hope, not more of the Tory austerity fairytale

This is the text of my letter to the Guardian published this morning.

Ha-Joon Chang (in the Guardian on 20 October) is right that “the country is in desperate need of a counter narrative” to the Tory story on the economy. I believe it should go like this.

First, Labour did not leave behind an economic mess; the bankers did. Labour was not profligate: the biggest Labour deficit in the pre-crash years was 3.3% of GDP; the Thatcher-Major governments racked up deficits bigger than that in 10 of their 18 years. So who was the profligate? It’s a no-brainer.

Second, the Tories have claimed that the reason for enforced austerity is to pay down the deficit. Yet, after six years of falling wages, private investment flat, productivity on the floor, and fast-rising trade deficits, the deficit is £100bn, when Osborne promised in 2010 it would now be next to zero. To cap it all, the deficit will almost certainly rise this year because income from taxes has sharply fallen as wages are increasingly squeezed. Austerity is now a busted policy that has turned toxic. It should be dropped.

Third, Osborne’s so-called recovery is bogus because it is too dependent on a housing asset bubble, too dependent on financial services rather than manufacturing, and has no demand to sustain it. It is already fading as growth slows.

Fourth, the only way now to get the deficit down is by public investment to kickstart sustainable growth via housebuilding, upgrading infrastructure, and greening the economy. Funding a £30bn package at interest rates of £150m a year would create 1.5m jobs within two/three years. Or it could be financed without any increase in public borrowing by printing money, or instructing the publicly owned banks to concentrate lending on British industry, or taxing the 0.1% ultra-rich whose wealth has doubled since the crash.

People need hope. The Tories are continuing with austerity because their real motive is to shrink the state and public services, not to cut the deficit. The alternative offers investment desperately needed, growth in the real economy, genuine jobs, rising wages – and really will pay down the deficit.

2 thoughts on “People need hope, not more of the Tory austerity fairytale

  1. The same old tired and dishonest mantra, (and at this point who really care’s anyway,) it’s not a matter of how we got here; although it’s worth pointing out in passing that the Tories were actually out of power for the 13 years that preceded the current economic recession, so I’ll skip over the PFI abuses, and, “an end to boom bust,” and the failure regulate the banks and Blair’s, (who famously still managed to lose money on a property in Islington at the height of the property bubble,) later economic policies which seemed intended to try and prolong the properly bubble and therefore his own fiscal interests at the expense of sounder and more prudent policies etc.

    Well while both party’s (equally dishonest,) are engaged in a slagging match about which of them is the most to blame for the current, (global,) recession and about who did what or in making firm, principled and completely empty gestures about such vitally important issues as whether or not to recognise the Palestinian state; real hunger and real poverty has crept quietly back into UK ushered in under the auspices of a corrupt and unelected coalition and too many people are now in desperate need of far more immediate help and succour than than just another dose of jam; just around the corner, based throwing yet more public money and resources at all the usual suspects, (the education Mafia, for example.)

    The grim reality is that for far to many unemployed or disabled people, (I still believe that UK unemployment is probably around 3-4 million, certainly it’s got no easier during the last 4 years in my own experience,) so the idea of, “somehow,” rebuilding the UKs manufacturing base is completely irrelevant for too many people, whist too often their current choices are limited to starve or steal.

    http://www.theguardian.com/commentisfree/2014/oct/27/todays-britain-poor-forced-steal-food-banks

    The appearance of Food Banks, (for gods sake,) in the UK during my lifetime is as clear an example of the complete political and moral failure of both parties as it’s possible imagine along with the manner in which disabled are being bullied, traduced and exploited.

  2. Time to say it again: whether anyone is listening or not. The ‘political system’ in the UK is rotten to the core and way beyond cosmetic titivation. Time for the ‘Trash’. Time to think again and time for fundamental reform but time is running out. Where is the will? Where are the great ‘Statesmen’? What happened to integrity, morality and common decency? Forget about your ‘voting’! Your vote keeps everything exactly as it is: which is the primary intention.

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