Search Class

Austerity - there can be no compromise with a failed idea

Austerity illusions and debt delusionsIf you tell a lie big enough and keep on repeating it, people will eventually come to believe it – clearly this is something David Cameron agrees with. The lies justifying the Coalition Government’s austerity policies are among the biggest. They’ve caused untold harm and misery to the overwhelming majority of us, while the richest have prospered. Yet still they continue.

Einstein famously said

“insanity is doing the same thing over and over again and expecting a different result”

This certainly applies to austerity – an idea which keeps coming round despite being proven to be disastrous again and again.

Austerity was the solution to the massive problems left by the neo-liberal experiment. It was clear that austerity wasn’t going to work and Britain’s trade unions quickly identified that the Coalition Government’s austerity policies would be disastrous. Our campaigns were often lonely as the media regularly spoke of cuts as if they were unavoidable. But today, with worrying economic statistics constantly making the news there is wide recognition that austerity has failed.

However, the figures don’t even tell the worst part of the story. Economic statistics translate all too easily into fear, uncertainty, unemployment, poorer living standards and the piece by piece dismantling of our welfare state. One of the strongest symbols of the failure of austerity has been the shocking appearance of food banks in Britain. Last year Trussell Trust food banks fed 346,992 people nationwide. Of those 126,889 were children. Oxfam have reported that the number of those reliant on food handouts on a regular basis is actually over 500,000. Not something you expect to be part of everyday life in the seventh richest country in the world.

This is not the only harsh reality of austerity. Public sector workers have seen their jobs disappear – 300,000 between 2010 and 2012 – with predictions of another 600,000 to go by 2017. Every job a decent income, every job providing a service to the public, every job a person’s livelihood.

Nye Bevan said, “the NHS will survive as long as there are people prepared to fight for it” and clearly, it remains the utmost priority to defend jobs and services for the interests of society as a whole.

This struggle to make ends meet isn’t a problem for everyone. Since 1980 income and wealth have been massively redistributed towards the super-rich and away from working class and middle class people. In the UK the living standards debate is a constant reminder that austerity and current government policies act in the interest of the richest 1% of society. Millionaires enjoy tax cuts, while millions fall victim to tax increases and service cuts.

Ever-growing numbers of people are receiving low wages. This is directly linked to the weakening of workers’ bargaining power through the decline of unions. Between 1979 and 2010, both trade union membership and collective bargaining coverage more than halved. Such decline led to a fall in wages and higher levels of inequality, as well as the dramatic growth of top pay, deeply destabilising the economy.

If Britain is to build a fairer economy, we must move away from austerity, and austerity-lite, and create a new settlement for working people. This is why it is so important that we win the battle of ideas. For three decades, organisations sidelining trade union values and the post-war settlement have dominated the debate. We cannot let this continue. We are cranking up the ideas machine and as the Coalition Government shows no signs of giving up on austerity, the appetite for a progressive alternative has never been stronger.

The billions of austerity cuts still to come may choke off the fragile recovery currently based on a dangerous ‘housing bubble’. They must be halted. A programme of investment to produce growth, to reduce the output gap, is the central priority of economic policy. Growth will reduce the deficit, and in the long-run, when appropriate, will reduce debt.

An Investment bank, with a new interventionist industrial strategy, to boost public and private investment; a substantial house-building programme; and policies to reduce inequality and to boost wages – such as increasing the minimum wage, introducing  the living wage, and boosting collective bargaining – will not only be good for working people, but will increase spending power and grow the economy. In the long-run, a more equal economy is a more stable economy.

Our new pamphlet - Austerity Illusions and Debt Delusions - has been produced to expose the Coalition Government’s lies and prove that there are alternative routes back to jobs, higher living standards and economic recovery. Austerity hasn’t worked and it won’t work. Austerity-lite is not much better. There can be no compromise with a failed idea.