The Tories have done absolutely nothing about the real level of wages – John McDonnell MP on the #autumnstatement


“The solution is resistance – that means joining demonstrations, occupations and picket lines.”

John McDonnell MP

The autumn statement shows ‘austerity 2.0’ is here and we must build the resistance, argued John McDonnell MP at a briefing organised by Arise: A Festival of Left Ideas.

WATCH: Hunt & Sunak’s Austerity Autumn Statement – How do we respond?

A useful starting point to discuss the Tories’ autumn statement and their overall approach to the economy is to compare what they have set out with what we have been arguing any government should be doing in this crisis.

Firstly, we have been saying that they must fully recognise the scale of the struggle that people are going through just to survive in the cost-of-living crisis, including through inflation-proofing of benefits, pensions and wages.

We have also been clear in saying that the inflationary spiral we’re in now is not caused by wages but by profiteering – so what is needed to tackle inflation is price controls, including on energy, rents and basic food stuffs.

Finally, the third area in which we have been arguing for action is the recognition of the existential crisis we are now facing because of climate change, and therefore how we needed a real Green New Deal based on investment in tackling climate change. And if it’s going to be successful that would have to incorporate public ownership of basic utilities, including water and energy.

The Tories have failed to move things forward in all these areas and the political, social, human, and environmental consequences are set to be devastating.

The Office of Budget Responsibility (OBR) is now predicting a recession at least a year long. It’s also predicting household income will fall by 7%, by 2024. That’s the biggest drops since records began way back in the 1950s. They’re also predicting that unemployment will increase from 1.2 to 1.7 million, and the Bank of England is saying its more likely to be over for 2 million.

Furthermore, because of 12 years of austerity, people haven’t got the financial resilience to respond to that recession.

For this reason, the Tories are therefore praying for a ‘shallow recession,’ but even if it is a ‘shallow recession’ (as they would describe it) people won’t be able to survive that.

Already, to give just one example, housing repossession orders have gone up 500% of the last 12 months. Housing is always the canary in the mine when you’re trying to assess how people are coping because most people when they do their budgets prioritise keeping a roof over their heads.

The picture is bleak across the board, in terms of the real level of wages, which the Tories have done absolutely nothing about.

Inflation is at 11%, so if you are in the public sector and a wage deal of 2% is imposed, for example, you’re talking about a 9% cut in your income as a result of that.

The reaction to the Tories inaction is that people are angry, and they’re also frustrated because they can see they are facing relentless attacks when it comes to their standards of living and quality of life.

In terms of the way forward, that is where the labour and trade union movement comes in.

People are mobilising now, and we’ve seen the industrial relations ballots where people are voting for strike action.

But the other issue as well that is clear from the Autumn Statement is that the big-sounding announcements around expenditure on public services are – if you look at the real figures and what the NHS and other public services need – another round of austerity cuts.

As part of this, to give just one key example, we are seeing local authorities actually saying they are on the edge of bankruptcy.

That is the situation we are facing now – it all leads to resistance, and there is no other choice. This includes the resistance of our trade union movement in terms of taking industrial action to protect wages and public services, and the direct-action people are taking for climate justice.

In addition, the situation needs the Labour Party to come forward with an alternative programme that will take us into government. The election will come in 18 months’ time, and we have got to start telling people that what we need to do.

And that’s where we on the Left need to come in to put forward that alternative. This must be based upon growing the economy but growing the economy on the basis of making sure people have decent wages – and that we invest in infrastructure and our future, including with a long-term plan, based upon a real Green New Deal. To do this, we need to have a fair taxation system where you tax the city, tax the rich and tax the wealth.

So the solution is resistance, and that’s what we need to be planning now. That means joining demonstrations, occupations and the picket lines – and it also means discussing the alternatives we need around a socialist policy programme.

  • This piece is based on John’s speech at the Arise – A Festival of Left Ideas #autumnstatement briefing. You can watch the event back here.
  • CONFERENCE: Solidarity, Struggle , Socialism – Saturday 10 December taking place at Conway Hall 25 Red Lion Square, London, WC1R 4RL. Speakers include: John McDonnell MP // Sarah Woolley, BFAWU General Secretary // Richard Burgon MP // Mick Whelan, ASLEF GS // Nadia Whittome MP // Zita Holbourne, Black Activists Rising Against Cuts (BARAC) // Lord John Hendy KC // Hilary Schan, Momentum // Ben Chacko, Morning Star // Sabby Dhalu, Stand up to Racism // Heidi Chow, Debt Justice // Steve Howell // Holly Turner, NHS Workers Say No // Jon Trickett MP // Barry Gardiner MP// Dave Ward, CWU GS & more. Register here.
  • John McDonnell was speaking at the “Hunt & Sunak’s Austerity Autumn Statement – How do we respond?” event held by Arise Festival. You can watch it here; or listen as a podcast here.
Featured image: John McDonnell speaking to fast food workers holding a strike meeting at London’s Leicester Square on Thursday 4th October 2018. Photo credit: Garry Knight under CC0 1.0 Universal (CC0 1.0) Public Domain Dedication

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