Green Politics

Why We Oppose Austerity

Austerity politics are being used to make the poor pay for the mistakes of the rich.  Through austerity the cost of bailing out a financial elite who almost bankrupted our economy with their high-risk ‘casino banking’ in deregulated financial markets, is being foisted onto those least responsible.  Austerity makes the most vulnerable pay for a crisis they did not cause. It shatters lives and frays the fabric which binds our communities. It has increased unemployment, extended the economic crisis, and done nothing to solve any of the true challenges faced by our society: inequality and joblessness; the housing crisis and the environmental crisis.

Without even considering its overwhelmingly abhorrent social impact, austerity policies have failed on their own terms.  Before the election of 2010 Osborne promised that if we followed his austerity plan by 2015 we would have completely eliminated the budget deficit, and would have started running a budget surplus and paying back the national debt.  Instead they have reduced the deficit by only 1/3 in numeric terms (though they are now trying to obfuscate the extent of their failure by claiming to have reduced it by ½ as a percentage of GDP).    This is because their policies like public sector pay freezes and mass redundancies have depressed wages across society (except for the already very wealthy) and, with the government’s tax cut for the highest earners and large corporations, have greatly undermined its tax bases and revenue flows.  Despite all their cuts national debt is now half a trillion pounds higher than it was before they came to power.  And yet at the conservative party conference last year David Cameron had the audacity to say ‘Britain is a country that is paying down its debt’.  By conflating these two most basic economic terms, debt (the total amount of money owed) and deficit (the amount of money being borrowed), Cameron is displaying either his own economic illiteracy, or is cynically attempting to mislead the public.

In spite of government rhetoric that we are ‘all in it together’, a cabinet with the highest proportion of millionaires since the 1920s, has overseen a vast transfer of wealth from the poorest in our society to the wealthiest.  The accumulation of wealth by the super-rich in this country has greatly accelerated since the crash of 2008.  The number of billionaires has more than doubled.  The wealth of the richest 1000 individuals has also doubled since 2010 alone; and the UKs 5 richest families now control more wealth than the 12.5 million poorest in our country.  Whilst executive pay rockets and bankers bonuses boom, the rest of us are enduring the longest sustained decline in real incomes since the 1870s.  Over 3.5 million are now growing up in child poverty, inequality has spiralled out of control and over a million people are forced to rely on food banks.

Austerity disproportionately effects the poorest and most vulnerable in our society (despite government promises to do otherwise).  When all austerity measures are taken into account, including cuts to public services and changes to taxes and welfare, the poorest tenth of the population are by far the hardest hit, seeing a 38 per cent decrease in their net income over the period 2010-15. The way cuts to council funding has been implemented by central government has also been extremely unfair with Labour controlled impoverished inner-city local authorities (and Green run Brighton) being cut the most; whilst some wealthy Conservative councils have actually seen their budgets increased. Austerity is destroying our public services, and dismantling the welfare state.  This latter point can be further elucidated by the government’s last autumn statement, which unveiled further cuts till 2020 that will reduce government spending (compared to GDP) to levels not seen since the 1930s (before the establishment of the NHS or the welfare state in general).

It’s not that there isn’t enough money to pay for public services.  Britain is after all the 7th richest country in the world.  It’s a question of priorities, and our government prioritises protecting banker and the wealthy over public services and ordinary people.  Despite the top rate of income tax and tax on corporations being lower than ever, at least £35 billion a year is lost through tax avoidance by the rich and powerful.  If everyone paid their tax, there would be no need for spending cuts of any kind. By both our own historic standards and by international standards our debt is not high. The national debt is now actually smaller than it has been for most of the last 300 years, and the costs of servicing Britain’s debt remain at historic lows.  The financial crash and austerity are being used as a smokescreen to allow the Conservative party (with their Lib Dem enablers) to carry out the ideological policies they’ve always been wedded too; like privatising public services and dismantling the welfare state.  The dismantling of the welfare state is not a matter of economic necessity. Rather, it is a political choice, made on the basis of an ideological commitment to a certain vision of the state.

uk debt to gdp ratio

debt interest payments as proportion of GDP

 

Investment spending on productive assets – like renewable energy and genuinely affordable homes – can produce steady, long term returns that more than cover the cost of the interest payments on borrowed money.  With the costs of borrowing at such a historic low, right now is actually an ideal time to invest providing a well needed fiscal stimulus to our economy.  That’s why we propose a ‘Green New Deal’ to invest in the transition to a zero-carbon economy and create a million climate jobs; to build an economy that works for ordinary people (within the limits of one planet) and not just an unaccountable financial elite.  The solution to a collapse caused by banks is not to cut funding for librarians and care workers. It is to invest in building a fairer, low carbon economy which doesn’t rely on the financial sector or on scraping the bottom of the fossil fuel barrel.

Greens are often criticised from the left for opposing austerity nationally but then implementing spending cuts in local government – most obviously in Brighton.  This ignores the reality of local government, and takes emphasis away from the decision makers in Westminster that are slashing local council funding and must bare the responsibility.  The autonomy of local government has been steadily undermined by successive governments over the last three decades.  Britain today is one of the most centralised states in the world.  Local authorities are largely powerless to oppose Westminster enforced austerity.  Councillors could refuse to set legal cuts budgets, but all this would do would be to force central government to depose democratically elected local authorities and use auditors to run the council themselves and implement cuts.  This would at least place the emphasis for cuts squarely at the feet of those responsible, and could create local resistance that might galvanise the anti-austerity movement.  However, this is all speculative in a high risk strategy that would put local services under the control of outsiders with no knowledge of the specific needs of the local community.

Instead councillors have adopted a ‘dented shield’ approach that attempts to mitigate the worst excesses of cuts whilst protesting there imposition by Westminster decision makers.  The Brighton council has made some bad decisions.  But any decision it could make within the confines of a severely reduced budget would have been bad.  The Green adminstration in Brighton is in an extremely difficult situation, facing huge cuts by central government with only the barest minimum number of councillors to form a minority administration. On top of this its proposals are continually being blocked by an unholy alliance of Labour and Conservative councillors.  At the same time it has a record far better than hundreds of labour councils in far stronger positions.  Its decision to not evict the victims of the bedroom tax (often some of the most vulnerable in our society), or its implementation of the Living Wage for all council employees should be loudly applauded

If austerity is to be defeated, it must be defeated at the national level.  The Conservatives, Liberal Democrats, Labour and UKIP are all committed to continuing austerity after the next election.  The majority of the cuts haven’t happened yet.  No matter which of the establishment parties win the election in May, the public services we rely on, and the very nature of local government are going to undergo savage attacks to implement the rest.  We need to draw on the support of all those opposed to this socially destructive and economically illiterate policy if we are to have any chance to smash the consensus of the Westminster establishment.  That is why we have started to create an informal anti-austerity block with Plaid Cymru  and the SNP, and why we are gladdened by the recent announcement by Left Unity that it will not run against anti-austerity candidates.  These moves to work together and unite behind anti-austerity candidates is extremely positive and has the potential to greatly amplify our voice. The prospect of overturning austerity by the next election (or more plausibly in the few years after as unstable minority or coalition governments attempt to implement increasingly savage cuts) are bleak; but they are getting brighter every day.

 

Advertisements
Standard

One thought on “Why We Oppose Austerity

  1. Pingback: In search of #SocialJustice: From #LibDem to #Green | A Green Trade Unionist - In Bristol

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s