“My eight-year-old ought to be able to work this out – you shouldn’t start slamming on the brakes when the economy is barely growing. If you do that you create more joblessness, you create heavier costs on the state, the deficit goes up even further and the pain with dealing with it is even greater. So it is completely irrational.”
– Nick Clegg, April 2010.
There is a small protest taking place at Hove Town Hall today, where David Cameron is speaking. The protest is over Government plans already set in place, to cut Government spending drastically this year. The ideological warfare lead by the Tories, and their tag along, principle-less friends in the Liberal Democrats is supposedly the result of the need to do something quick about the debt crises in the UK.
I’ve always wondered why Tory supporters suggest that National debt is a lot like personal debt. They suggest that if we run up a large debt, it’s best for us to pay it off straight the way and so therefore it is the same for Nations. It isn’t the same for Nations. It is completely different. It just happens to use the same word ‘debt’. To follow their logic through, we should do what the Coalition is doing and only spend money on bare essentials. Bread, the very cheapest and fewest clothes possible, shelter and water. Personal austerity. But, then wouldn’t that risk an even deeper recession as demand falls, jobs are lost, and businesses close? The government in one breath are telling us that National debt and personal debt are identical, yet in the next are telling us that whilst they cut spending, we should be encouraged to spend.
Now, putting aside the fact that there isn’t a debt crises, and putting aside that fact that only 20% of our debt matures in the next three years, and putting aside the fact that millions of people were dumb enough to believe the scare tactics employed, that voting Tory was some righteous move because they keep mentioning the words “omg debt!!!! Naughty Labour” despite the fact that those voters are somewhat economically illiterate to the problems that they personally would encounter under a Tory government. The same Tory government whose millionaire members kept spouting the same “we’re all in this together” nonsense, whilst refusing to answer what it is that will effect them the most from the spending cuts. When will ordinary people learn that voting Tory, is never going to benefit them.
It has emerged today that the UK’s service sector, which is the key ingredient in our economy, stalled last month in its output. So much so, that growth in the sector, fell to a 13 month low. The vast majority of companies who were asked what has caused the stalling of growth, said that cancelled government projects, that were propping up their business, whilst recovery from recession was underway, were the cause of the stalled growth. The government projects, were all cancelled, by the Tory government. Consumer spending, which was strong in January, February and March under Labour, has now started to slow down massively, under the Tories.
Labour’s Ed Balls rightly says:
“These warnings show why it is so risky for the government to be cutting public sector contracts now when the recovery in Britain is so fragile and people around the world are worried about a double-dip recession. David Cameron is misguided and wrong to say the most urgent priority for Britain is to slash the deficit. The most urgent priority should be to secure Britain’s economic recovery by boosting jobs and growth.”
The chief economist for the surveying company, Markit said:
This has hugely increased the risks of a double-dip recession, perhaps even by the end of the year.
Julian Le Grand, professor of social policy at the London School of Economics, stressed recently that massive cuts risked a return to recession, and possibly worse than before. Economist Paul Krugman continues to argue against such swift cuts. David Blanchflower, a former member of the Bank of England monetary policy committee says that we need more stimulus and more spending in the short term, and definitely not cuts. Nobel Prize Winning economist Joseph Stiglitz has said that more government investment in high return ventures like education and investing in infrastructure and promoting investment is the way to go, and that cutting spending risks a prolonged return to recession. The Tories, are wrong. Very very wrong.
Every day, Sky News would interview some irrelevant business man in an expensive suit, and spin it to appear that he knew exactly what he was talking about when he demanded spending cuts immediately. BBC News would do much the same. We’d keep hearing from the same type of people. Never from those who would suffer the most. And so the idea that any suffering would take place, was largely ignored, and the rose tinted business men specs were continuously worn, and presented as fact, that this was the only way. We’d see Willie Walsh of B.A tell the UK that the cabin crew on strike were threatening to destroy a great company, pretty much daily. Sky and BBC didn’t question it. They didn’t suggest that we were only ever hearing one side of the story. They’d then back in up, by interviewing a child at an airport trying to get home but couldn’t because of the strikes, crying on his own, and we’d all (when I say ‘we all’, I exclude myself from that, because i’m not an idiot) suddenly demonise the cabin crew as greedy and evil, yet Willie Walsh, the CEO who had brought BA to it’s knees, by forcing it to pay $25mn over a price fixing scandal and a further £121.5m in the UK by the Office of Fair Trading. Why weren’t we told that perhaps if management wasn’t so appalling, that 98% of the workforce wouldn’t have to agree to strike action?
We were then told, constantly by the Tories that they have to do this, because Labour have had thirteen years of creating a massive debt. We have not been told that in the first five years, the Labour Government reduced the debt by £34bn. The biggest debt reduction than any government accumulatively, over the past fifty years. Massive actually. Public spending then fell from 40% when the Tories were last in power, to 38.1% by 2001. In fact, the debt by 2005, had fallen from 44% of GDP to 34% of GDP. Spending only started to build, after recession hit, because there were suddenly no jobs, and because of the nature of the crash, spending was needed to protect homes and jobs. The Tories opposed it. Half the people who voted Tory, would have lost their jobs, and their homes, had the Tories been in power between 2007-2010. Contrary to the constantly projected bullshit, Labour had not spent 13 years wrecklessly spending. They had actually followed the Tories lead, and embraced Neoliberal economics.
We were then all told that we must cut public spending, because to attack the bankers who actually caused the mess, would mean the bankers would all leave the Country and go somewhere in which they could be as corrupt as they wished without being brought up on it. It’s like saying “Look, we know he’s a murderer, but he’s a good football player, so we wont tell the police, otherwise he’ll leave the club”. We are made to believe that the best thing for all of us, is to become servants to the financial sector. We do what we’re told, by business. It becomes our fault, that the economy is screwed. There is something fundamentally wrong with the entire system, and the philosophy behind it. The philosophy being, we are all self centred egotists who could not possibly be interested in advancing the public good and humanity in general, and we we should leave it to the private sector because the private sector appeals to our vanity. The philosophy is wrong. The philosophy is something that has been embedded into our minds consciously, not naturally.
The idea that we are taking away from the public sector, and giving to the private sector is sold to us, as an act of democracy. That democracy is linked to capitalism. It isn’t. Surely the opposite is true. We are taking power away from the democratically elected officials, who are accountable to the people who vote for them, and giving the power to unelected, self interested businessmen who we never see the faces of, let alone vote for. The political sphere may be in the hands of democracy, but the economic sphere is firmly in the hands of a new age nobility.
When the Tories spent half of the election campaign complaining that raising National Insurance was essentially a tax on jobs, they failed to point out to anyone that their ‘austerity’ measures would not just mean a massive loss of jobs in the public sector, but also, and as a direct result of the cuts, a massive loss of jobs in the Private sector. This is not in any way Labour’s fault. This is entirely the fault of the Tories. I can guarantee as the situation gets worse, which it will, the Tories will justify it constantly by telling us all that they had to do it because of Labour. The latest estimates that put unemployment up by a further 1.5 million by this time next year, which of course means consumer spending falling even further, is not the fault of Labour. Labour had a deficit reduction plan, that was careful and meant as few job losses as possible, and then when business started to pick up, the idea was that new revenue streams would open up and the deficit could be reduced slowly. The Tories plan, is an absolute disaster. Labour, it turns out, were right.
Spending, as a percentage of GDP was raised under Labour, as a result of the faults of Neoliberal/Tory policy across the World. As a result of mass deregulation of the banking sector primarily. That was Tory policy. They were wrong. The Tory idea that introducing a minimum wage would result in mass unemployment turned out to be false. With National Insurance, they were wrong. And now, with these new spending cuts, they are massively wrong. They said they would protect front line services. According to the Norfolk Firefighters, £1.5mn will be cut from front line fire services in Norfolk in 2010/11, these cuts include cuts to vital appliances, cutting employment of firefighters, and cutting coverage.
Let’s still not forget that whilst the major banking institutions that essentially caused the problems in the first place were licking their wounds, out of nowhere suddenly we were made to forget that aspect and start blaming public spending and Welfare programs for the problems we face. Public spending did not cause this problem, the private sector caused the problem, and now David Cameron is proposing that we should rely on the private sector to fix the Nation. Business cannot be trusted to do the right thing for the good of humanity, without regulation. Voting Tory, means voting away that regulation.
Over the next few months, we are likely to see just how much Labour did to prop up the economy, as the Tories continue to knock out the pillars that hold it up.
The problem Labour has now, is that they are still pandering to the Right. They keep mentioning a clear deficit reduction plan, as if there is no alternative. They keep suggesting cuts have to come. Blyth Valley Labour MP Ronnie Campbell noticed just how little a difference Labour offered in their dedication to needless public sector cuts, by saying:
We’ll cut your throat slowly, the others will cut your head off.
The UK has the fifth largest economy in the World, we are AAA rated credit wise, and the third largest reserve currency in the World. We are still able to spend £6bn replacing an out of date, out of touch nuclear deterrent, and almost £1bn subsidising the arms trade, yet the Con Lib Coalition insists that we need to cut spending to help people whilst jobs continually wither away. This is purely ideological, and it is dangerous. And we on the Left, were right.