Unity! Why we need an alternative economic strategy by John Foster Last year George Osborne announced austerity cuts that would reduce public spending at a real rate of 3.7 per cent a year till 2017. This year we have seen the first results: a double dip recession now lasting for nine months, benefit payments up 6 per cent, tax receipts down 1 per cent and the government having to increase its borrowing in June. Now Osborne is threatening even more cuts – on the Greek scale – to be announced this October. What crazy economics! The government’s only major intervention has been through the Bank of England’s ‘Quantitative Easing’: which has handed £375 billion to the banks to back up their reserves and use for short-term speculation. None of it has gone into the real economy. Industrial investment is at an all time low. And no wonder. There is no demand. Real disposable income has fallen to its 2003 level. The only way to reflate the economy is to stop cutting public sector jobs; invest in job creation and skills training to increase high street spending power and renewing the call for a shorter working life as an important element of tackling long-term, crippling unemployment.
Britain’s economy is now over 4 per cent smaller than it was in 2007 – the only major economy to have contracted to such an extent apart from Spain. It is still contracting. This is why alternative economic policies, based on active state intervention, are so desperately needed, as Unite argued strongly in its motion to last year’s TUC. We need specific demands that can unite trade unions and communities to campaign politically – demands which also add up to a coherent strategy that can rescue our economy. The first demand is obvious: stop the cuts. This is the quickest way of restoring consumer demand: end the insecurity of imminent job loss, halt the new pensions levy, reverse the benefit cuts and end a wage freeze that is currently cutting real incomes by up to 3 per cent a year. The second demand is for the nationalisation of the retail banks that handle the savings of working people – to stop these savings being pillaged by the investment banks to the benefit of the super-rich and instead invested in the productive economy. The third is for the government to create real, well-paid jobs and hence boost tax income as well as demand for goods. Council housing is one obvious area. There is
Communists at the TUC 2012 Monday 10 September
TODAY!
COMMUNIST PARTY LUNCHTIME MEETING ALTERNATIVES TO EU AUSTERITY
Brighthelm Church & Community Centre (just aroud the corner and up West Street/Queen's Road) Tsiaples Anastosis PAME and president regional TU centre of Larissa in Greece Alex Gordon RMT President Chair Anita Halpin Communist Party trade union organiser
desperate need and the private sector has failed – house building has collapsed from 180,000 in 2006 to 120,000 last year, the lowest since the 1920s. Building houses under local democratic control also makes it possible to introduce comprehensive energy saving with green technology - another key area for investment. Equally essential on this front is the demand to take water, energy and transport back into public ownership, end extortionate pricing, stop the state subsidies to monopolist owners and make the investments in infrastructure so desperately needed. There must also be government action to stop closures in the productive economy, to take over failing manufacturing enterprises and to penalise companies that shift production overseas – even if this means defying the neoliberal directives laid down by the EU. Key to rebuilding manufacturing would be the introduction of controls on the export of capital and limits and/or taxes on the import of manufactured goods, both ready-made products and components. Can this be paid for? Yes, easily - by imposing a tax on the City’s financial transactions; reclaiming the £100 billion lost through tax evasion; closing down Britain’s many tax havens, and reversing Osborne’s tax cuts for the rich and on company profits. Achieving this requires a mass movement that can remove this government of financial speculators and ensure the Labour Party adopts the alternative policies needed to save our productive economy – in the interests of the vast majority of the population. John Foster is a member of the Communist Party economic commission and is the party’s International Secretary