“The overall picture of the British economy is one of stagnation.”Michael Burke, Economist for the Socialist Economic Bulletin
Matt Willgress, Labour Outlook sat down to discuss the 2023 Budget and the state of the economy with economist Michael Burke of the Socialist Economic Bulletin – Logan Williams reports.
Our interview with Michael Burke began with him providing an overview of what he described as “yet another austerity budget.” Jeremy Hunt’s first full budget continued the Tories’ economic policy and program of austerity first established under David Cameron and George Osborne in 2010.
Michael went on to argue that Hunt’s optimistic and upbeat tone throughout his Budget Day speech was “massively misplaced,” as “the overall picture of the British economy is one of stagnation.”
Following on from this overview, the discussion moved onto the industrial context within which the Spring Budget was presented, which has been marked with industrial action from unions such as PCS, the NEU, BMA, UCU and many more.
Despite this context of people demanding better pay, Michael argued that instead Hunt’s budget has “placed huge amounts of money into places a progressive economic policy wouldn’t” – from £28 billion to corporations to invest, to around 15 billion to the fuel duty levy “which is essentially an encouragement to drive cars and increase pollution,” to a further £11 billion for military spending. Hunt was only able to accomplish these feats by “cutting public sector spending, including public sector pay,” whilst letting inflation rapidly increase.
In terms of an economic alternative, Michael explained that the Government should have invested money directly itself, aiding the transition to a green economy through “rebuilding infrastructure and tackling the crisis in our buildings, in terms of schools and hospitals as well as houses.” Instead, the policies pursued by Hunt “were simply austerity via new methods.”
The final topic of discussion was around the links between the Tories’ economic policies to their increasingly authoritarian policies such as the Public Order Bill, as well as the so called “War on Woke.” Burke argued that these are intrinsically linked “because the Tories no longer have a policy platform to stand on going into the next election” bar their drift ever-rightwards on issues such as attacking refugees.
As an example of the Tories failure in terms of living standards – which they are desperately seeking to distract from through the use of scapegoating – he went on to highlight the remarkably under-utilised OBR (Office of Budget Responsibility) assessment of public sector pay in Britain. The report claims that “Government departments stated that they could afford on average a 3.5% pay increase for the next financial year” yet their inflation forecast for the next year is 4.1%, which represents yet another real-terms cut to public sector pay. Michael further highlights that to bridge the gap between the OBR’s prediction and the Government Departments’ pay offer would only “cost £2 billion… in an economy where public sector spending is around a trillion.”
Reflecting on this, he went on to argue that the Government’s failure to tackle the pay issue “may be [because they are] seeking to build another plank of it’s election platform,” namely “all-out war” with some trade unions in the wave of industrial disputes taking place in sectors across the country.
He ended the interview by stating that “I hope the resistance to the Tories continues to run and run.”
- Watch the full interview with Michael Burke on YouTube here.
- You can follow Socialist Economic Bulletin on Twitter here.
- “Hard Up? Who is to Blame? The Economic Consequences of the Anti-union Laws” is hosted by the Socialist Economic Bulletin and the Campaign for Trade Union Freedom. Monday May 27, 7pm with John Hendy KC; Diane Abbott MP; Mick Burke, Socialist Economic Bulletin; and Alex Gordon, RMT. Register and find out more here.