It is abundantly clear that the austerity agenda the Government has pursued since the Tories came back to power in 2010 has failed on every objective measure.
They said they would eliminate the deficit by 2015 but failed. They then said they would eliminate it by 2020, but have now abandoned that goal. They said they would reduce Government borrowing, but actually increased it by more than half a trillion pounds.
Britain’s Gross Domestic Product (GDP), i.e. the monetary value of all the goods and services the country produces, has barely clambered above the pre-2008 financial crash. This anaemic recovery would be even more feeble were it not for the economic impact of immigration into the UK over the last eight years, which has boosted the GDP figures.
Furthermore, despite the Government’s claims about the number of jobs they have created, productivity has only just got back to pre-2008 levels. But it still lags way behind the rest of the G7 countries made up of Canada, France, Germany, Great Britain, Italy, Japan, and the United States. According to the ONS, output per worker in the UK is on average 19 per cent lower than the rest of the G7. Moreover, Britain’s productivity gap is 5% lower than Spain, 30% lower than Ireland, 34% lower than Belgium and 45% lower than the Netherlands.
And while wages in Britain have fallen by 10.4% since the financial crash, workers elsewhere in Europe have seen their wages rise over the same period. Only Greece has seen as big a reduction as the UK, while wages in Portugal have dropped by 3.7%. By contrast workers in France have seen a 10.5% increase and Polish workers have had an uplift in their wages amounting to 23%. Not only have British workers seen their wages fall, they also have to work the longest hours in Europe to make ends meet. The UK’s average working week is now 43.6 hours, while the European average is 40.3 and France limits their working week to just 35 hours.
It was not surprising then to see that recent research by the Money Advice Service show the precarious position that huge numbers of households find themselves. Their findings revealed that the assault on living standards has left nearly 17million people of working age throughout the UK with less than £100 in the bank. And a report by the Joseph Rowntree Foundation found that more than half the people living in poverty in Britain are in work.
These alarming facts vividly illustrate that the last six and half years of Government imposed austerity has been a catastrophic failure. They also clearly show the benefits of Jeremy Corbyn’s alternative economic programme.
Of course we have been here before following the 1929 financial crash. Sadly lessons were not learned from that period, both in terms of avoiding the crash in the first place and in how best to respond to it. The 1930s were scarred by mass unemployment and poverty, as ordinary working class people were subjected to huge public spending cuts. The economic situation only improved when the nation started preparing for war. But as Tony Benn said: “If we can find the money to kill people, we can find the money to help people.”
This is precisely what Jeremy Corbyn is proposing. By investing in the economy we can create decent, well paid, secure employment, grow the economy and generate additional tax revenues that can then be deployed to expand public services.
The plan to establish a National Investment Bank, with a £500 billion investment fund will transform Britain’s infrastructure, revive manufacturing, boost renewable energy and nurture the digital technology sector. The proposal to build a million new houses before the end of the next parliament, 500,000 of which will be council homes, will also deliver a huge economic stimulus and create around 900,000 jobs.
The cost of providing new council houses is negligible, because nearly all the building costs can be covered by the rental income. Lifting the restrictions on councils to borrow to build new council houses poses no additional financial burden on the public purse because the loan charges can be serviced by council rents. It would also bring down the colossal £9.5 billion private sector housing benefit bill, by providing lower priced alternative accommodation.
People are crying out for a different approach. Millions are trapped in expensive privately rented dwellings unable to obtain a lower priced council house or afford a mortgage to buy their own home. Millions are stuck in insecure low paid employment, with little or no prospect of promotion. Millions have seen the public services on which they rely, systematically destroyed. And millions have been forced to endure the indignity of social security cuts which have left many utterly destitute and reliant up charity.
The case for Jeremy Corbyn’s commonsense alternative to austerity is therefore overwhelming and the national economic and social benefits of the programme he is advocating are enormous. Join the Labour Assembly Against Austerity on October 22 to discuss how we bust the myths behind Tory austerity and take forward our next steps in campaigning against austerity and for the Labour Government millions of people so desperately need.
Chris Williamson will be speaking on Labour’s economic alternative at the Winning With Jeremy – Labour’s Alternative to Tory Austerity conference hosted by the Labour Assembly Against Austerity on Saturday October 22. Other speakers at the event include Shadow ministers John McDonnell, Diane Abbott, Jon Trickett, Richard Burgon and Catherine West. More information and tickets available here.