And another nasty element hidden in the Autumn Statement

Another theme which underpins this Government’s whole agenda, and was hidden away in the interstices of Osborne’s budget, is the privatisation of Britain. Every bit of British life which can be subjected to market forces is being offered up to the knife. Three examples of this agenda were evident in the Autumn Statement. One is the announcement that the Treasury intends to create local public sector labour markets as a major long-term structural reform. A second is that Osborne intends to double his original dismemberment of the public sector workforce by cutting 710,000 jobs instead of the original 400,000, even though the evidence of the last 18 months has been that for every 3 made redundant in the public sector, only 1 job is created in the private sector. And the third is that PFI, which Osborne scorned in opposition before the election, he has now fully embraced, having already signed off 61 private finance projects at an eventual cost to the taxpayer of £33bn. This is (they hope and intend) the final overturning of the post-war welfare state.

The most far-reaching plan is to end national pay bargaining in the public sector. This has three advantages for the ne0-Thatcherites. It greatly weakens trade union influence in the public sector, their one remaining stronghold. It is yet another dimension towards the marketising of public services. And it meets the Treasury objective of pushing down wages in every area of the economy by every means feasible. The Treasury never seems to learn. A source from the Treasury has declared that “all the evidence is that flexible public sector pay to reflect local labour market conditionswill allow the private sector to flourish”. The truth is that all the evidence of the last 18 months proves the exact opposite.

Once again the Treasury is so fanatically subservient to the market fetish that it fails to see two obvious points. At the bottom of the wage structure, if you keep on pushing wages down, you undermine the level of demand on which the local economy depends and thus drag down the growth potential. At the top of the income structure, the market doesn’t operate at all as the boardroom and senior managers virtually write their own salaries. The objective is capitalism for the masses, whether in the public or private sector, and socialism for the bosses, whether in the public or private sector – a discrepancy that perhaps deserves a lot more attention than getting rid of national pay bargaining. But don’t expect the bosses in the Treasury to see that.