Latest post on Left Futures

Why doesn’t Labour lambast the Tories on their weakest point – the economy?

Its the economy stupidIt is strange that Labour hasn’t launched a full frontal attack on the Tory handling of the economy over the last 5 years, because it’s been deplorable.

The only points the Tories make in defence of their own management are growth and jobs. But look at the record. Osborne’s bizarre idea that contracting the economy would generate private sector expansion crashed in 2012 when his austerity budgets, plus increasing VAT and cutting capital expenditure both of which stifled demand, led to stagnation. Deficit reduction went out of the window, and in came reckless plans to get growth going at any cost – the Funding for Lending and Help to Buy schemes which duly blew up a property bubble in the housing market – not so much a long-term economic plan as a desperate short-term expedient. This left a very lopsided economy – investment, manufacturing, construction and exports (the real sources of sustainable growth) flat or worse, and only the service sector growing. Altogether growth has average 1.5% since 2010, well below the average for the last 70 years of 2.5%.

Then there’s the issue of jobs. Growth in the only expanding sector, services, has been based overwhelmingly on low-paid, low-skilled jobs, 40% of them self-employment on a pittance wage. This matters hugely because, quite apart from the humiliating sub-poverty wages doled out to 6.5 million working people today, it acts as a block on rising living standards which are dependent on productivity. If the number of workers in the economy increases but output doesn’t grow much, which is precisely what’s happened, then productivity is flat and living standards stagnate. In fact UK productivity is the lowest (bar Italy) in the G7 group of advanced industrial nations and has actually fallen in each of the last 7 years. That’s why Osborne’s austerity policies have squeezed out higher living standards for a generation. Why doesn’t Labour explain this?

That’s the Tories’ so-called strong points. What they never mention is the rest of the picture. All the damage inflicted by austerity – falling wages, the £20bn cut in the NHS, the bedroom tax, the rising rents and energy bills, etc. – was meant to be justified by the Tories as necessary to cut the government’s budget deficit. But the deficit isn’t being cut, it’s growing this year because tax receipts have shrunk along with shrinking wages. So why do the Tories carry on with a self-defeating policy? Because their real motive is to shrink the State and squeeze out public services into a fully privatised market system. Then there’s the trading balance of payments, the index of how we’re paying our way in the world: it’s this year the worst in British history, with a deficit of over £100bn. Then there’s consumer debt, now in excess of £1.5 trillions and still growing – a ticking timebomb which could herald the next crash.

This is the worst picture of the British economy since 1945. Why isn’t Labour shouting from the rooftops the colossal disaster that the Tories have brought upon our nation?

4 Comments

  1. J.P. Craig-Weston says:

    I think to reply seriously, to the actually fairly facetious rhetorical question is that it’s because Miliband, (no less than Cameron,) who let’s not forget this grew up and was educated in America, (“Give me the child until he is 12,” so to speak,) subscribes to the American Dream.

    Much of this crisis is actually being driven by aggressive American economic and foreign policy; TTIP and TAFTA being simply the latest examples of policies dating back almost as far the civil war, (at least some people would date them that early,) which is forcing the entry of American business and capital into every part and facet of a society, (the Open Door, Free Trade, Democracy, etc,) but above all the opening up of foreign markets, (backed by force of arms or proxies,) to exploitation be predatory American business interests.

    This is, or it can be so argued, exactly what’s now happening even to the NHS the police and other public services and based on the American experience the outcome of this will not be improved services and greater access for most people, it will be quite the opposite, like someone who having been robbed of all their worldly goods is then left to die in the gutter.

    In the late 1940’s Truman noted with frighting honesty that America,with 6% of the worlds population commanded 50% of it’s wealth and that it was the function American policy to maintain that situation at all costs.

    Clearly it is a policy that has failed.

    Nonetheless it, (the military/industrial complex and it’s variants,) continues to roll along on it’s own rails according to it’s own dictates and logic to the point where even sovereign states are no longer allowed on pain of what happened to Iraq and Libya to operate their own economies.

    The sole purpose of any government, (according to American doctrine,) now being to produce, (by any means,) dollars to spend with American companies, even if that involves abandoning social programs or independent national ownership and control of all, even traditionally key, industries and services.

    But a neat way of summarizing their policies in practice might well be to describe it as sustained policy of setting the richer, the middle classes, the 20% who own 80% of a countries wealth; against the poorest, those with almost nothing, the least well of 80%.

    Certainly what a modern America generally means by, “Democracy,” has absolutely nothing a all to do with what’s happened in Athens, not now and not 2500 years ago.

  2. David Pavett says:

    “Why isn’t Labour shouting from the rooftops the colossal disaster that the Tories have brought upon our nation?”

    Because Labour is complicit in the neo-liberal economic policies that have brought us to this point.

    We have a banking system that is not fit for the purpose of economic recovery and which has not been reigned in since crash. Labour is far from even talking about these issues. It has even omitted its talk of breaking up the big banks in its manifesto (and has softened its opposition to the iSDS part of TTIP). Labour entertains the impossible dream of moulding corporate capitalism into “responsible capitalism”. So it doesn’t have a lot to shout about.

  3. Barry Ewart says:

    Yes and as Wolgang Streeck in a recent New Left Review argues quantitative easing has only put the global financial crisis off for a few years and the rich and powerful really haven’t a clue what to do.
    We need radical solutions such as democratic public ownership of some banks and other sectors, greater taxes on he rich and land, closing tax havens and collecting the billions of uncollected taxes avoided by the rich plus a substantial EC financial transaction tax.
    But as some argue we are now in the third stage of capitalism – globalisation – and we need to be working with sister parties in every country in the World to be pursuing similar things including a living wage, decent health services and better health & safety at work for example.
    We need (as others have argued here) state- led public investment and as I argue to meet global human need – we could make toilets for the 2.5b in the World who don’t have access them, we need decent homes globally, we could equip health centres globally and adapt factories globally so they are safer etc. etc. but as well as stimulating growth through doing good it would also generate a global feel good factor.
    We could also make and fund solar panel farms in the World’s deserts to help harness the free energy of the sun (although there are stil scientific problems to be overcome with this technology) to also urgently address climate change.
    As capital and Neo-Liberal cheap labour attempts to become global our response as as global working people, as global citizens should be local and global.
    Yours in solidarity!

  4. swatantra says:

    Michael M knows the answer to his question. that ‘The Economy is Labour’s achillie’s heel as well.

© 2021 Left Futures | Powered by WordPress | theme originated from PrimePress by Ravi Varma