It is my strong and long-held belief that what holds back Britain’s economy is a lack of investment, both public and private, which is now running at its lowest level since World War II.
Nearly all economists now agree that investment is not just the most important factor in economic growth, but outweighs all others put together.
This is why, for example, when the Con-Dem coalition first took power and drastically cut back on the last Labour government’s investment spending, it pushed our economy back into recession.
The current crisis was caused by the failure of the private sector to invest and has been extended by the continued refusal to organise an investment recovery.
Under the Tories ideologically driven austerity, productivity growth has stalled since 2007 and wage growth remains low.
Despite Osborne’s targets and wave after wave of cuts that have devastated our communities, the current account deficit remains at near-record levels, while borrowing by government and households is also rising.
While in many areas the current Tory austerity is a particularly unfair and brutal novelty, what it rests on in terms of economic policy is not.
For far too long, since Thatcher’s election in 1979, we have seen deep structural problems in our economy. Manufacturing decline has been caused by a lack of investment. We see low productivity, geographical imbalances, the shackling of trade unions and in recent years an ever-increasing growth in insecure working and low pay, as illustrated by the explosion in zero-hours contracts. These have survived successive governments.
With Theresa May appointing a clearly Thatcherite Cabinet, it’s important to remember that while the Tories constantly say Thatcher’s economic strategy saved Britain, when she died The Economist, which devoted six pages to her record, did not mention growth in the economy or investment.
We were told that breaking the power of the unions, cutting taxes for the wealthiest and big corporations and deregulating the banks would unleash a wave of investment and growth.
But in the 30 years following Thatcher’s election the British economy only grew at two-thirds of the rate it did in the 30 years before Thatcher came to power.
The euphoria when Tony Blair defeated the Tories soon evaporated as he continued Margaret Thatcher’s economic policies of prioritising the banks and ignoring our manufacturing and working-class communities. Whilst much was achieved by the Labour Government, a chance for a new ‘1945 moment’ was missed.
Today, of course, even after the economic shockwaves caused by the EU Referendum vote, the Tories simply have not learnt these economic lessons. In George Osborne’s last Budget he sought to target government investment for cuts alongside day-to-day spending. And still, the Tories are not listening to the growing coalition of voices — from the experts at the IMF and OECD to our trade unions — that even before the EU Referendum were saying government investment is needed to navigate the choppy waters ahead.
In contrast to the Tory government, Jeremy Corbyn is the only major national party political leader who fully grasps this key issue and the need for a radical change of direction from neo-liberalism. That is what makes his re-election as Labour leader so important - Jeremy Corbyn and Shadow chancellor John McDonnell understand that the productivity problems Britain faces are a product of a chronic lack of long-term investment, and that the reversal of this is now what is needed to deliver both sustainable growth and social justice following the EU referendum result.
This is shown clearly in Jeremy’s 10 pledges to rebuild and transform Britain that our the foundation of his campaign to be re-elected Labour leader, where he commits to “full employment and an economy that works for all.”
His plan commits to creating a million good-quality jobs, all across the regions and nations of Britain, and seeks to guarantee a decent job for all.
He specifically commits to new investment spending of £500 billion in infrastructure, manufacturing and new industries backed up by a publicly owned national investment bank.
He explains that this is the route to a “high-skilled, high-tech, low-carbon economy that ends austerity and leaves no-one and nowhere left behind.” He also committed to investing in the high-speed broadband, energy, transport and homes that “our country needs and allow good businesses to thrive.”
Other parts of the pledges included a welcome commitment build a million new homes in five years, with at least half a million council homes, through the aforementioned public investment strategy and, crucially, a commitment to accelerate the much-needed transition to a low-carbon economy, using the national investment bank to invest in public and community-owned renewable energy.
This is key reason Labour needs to keep Corbyn - he and his leadership team understand the fundamental problems facing the British economy and have a clear, coherent alternative that can both restore Labour’s economic credibility and transform our economy into one that works for the 99 per cent rather than the 1 per cent.
What makes me angry about austerity Britain today is that my generation is the luckiest in human history.
Born into post-war Britain’s welfare state we all got a job, healthcare, free education and help to buy our homes or pay our rents.
I want my children and grandchildren to have the same opportunities we had.
Because he gets the need for a real alternative economic strategy, I believe Jeremy Corbyn is the best chance to achieve that and take Labour back to Downing Street and transform Britain — let’s keep Corbyn and take the fight to the Tories.
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