“Join the struggle to say no to the establishment’s attempt to create a “permanent austerity consensus.””
By Sam Browse, Labour Outlook
As our series on the Workers Can’t Wait demands to end austerity for good concludes, it’s worth reflecting on Theresa May’s claim at the 2018 Conservative Party conference that austerity had come to an end – and how we got to where we are today in the debate on economic strategy.
As some said at the time, “the end of austerity” would ring hollow if May’s government failed to reverse the years of cuts to public services, or the downward spiral of wages and conditions since the 2008 financial crisis.
And it did ring hollow. All she offered then was a modest loosening of the purse strings. More widely, the Conservatives continued to starve public services and local government of cash, and the transfer of incomes from the poorest to the richest continued relatively unabated. As the economy stagnated, rather than invest to kickstart growth, renew infrastructure, and create good, well-paid jobs, private shareholders continued to draw record profits while stagnation and stasis gripped the economy and ate into living standards. Dividends grew with the foodbank queues.
For all the bombast and bluster of “levelling up”, the trend continued under Boris Johnson. Any investment in long-neglected communities was piecemeal and pork-barrel. As the scandal over the Towns Fund shows, the distribution of money was more about shoring up support for new Tory MPs than any meaningful strategy for developing the national economy.
If you weren’t paying attention, you may have subsequently thought the Covid-19 crisis had driven nails into the austerity coffin, but – for all the fawning over “dishy” Rishi’s package of record pandemic spending – the percolation of wealth upwards never stopped. It’s true that average wages at times went up during the health emergency, but as an House of Commons Library note reported, that’s because – incredibly – the poorest were forced out of the workforce altogether. Furloughed workers and the self-employed took a 20% hit to their income while continuing to pay 100% rent and interest payments to their landlords and creditors, and small business owners were forced to take on debt while doing the same. Wages never recovered. The result was a movement of hundreds of billions from the public sector into the coffers of big capital, via the transmission belt of the covid support schemes.
And as finance capital hoovered up all the cash in rent and returns, it had more money than it knew what to do with, so ploughed it into commodity speculation. Take one example – long before the war in Ukraine, food prices had begun to grow, fuelled by speculators “betting on hunger”, exacerbating the price increases caused by post-covid bottlenecks. The results were spiralling inflation, originating in international food markets, which the Bank of England then tried to fix with a higher interest rates in a more or less explicit attempt to force up unemployment and force down wages.
So, austerity never ended – since the 2008 crisis, the British ruling class has landed punch after downward punch. Today, it persists but this time the justification is Liz Truss’s car crash budget. In its essentials, however, the Truss budget did what all budgets had done since 2010 – subsidise profits in the hope it would induce capitalists to invest. The difference is that she would borrow to finance the giveaway rather than cut services even further. What we saw in Autumn 2023 wasn’t a deviation from the strategy of the last 13 years, but a tactical misstep in implementing it.
Ironically, the misstep consisted not in “unfunded spending promises” but in telling investors the same lie Conservative Chancellors had been telling voters since 2010 – that if you only strip away the “red tape” and the prohibitive tax regime, the animal spirits of the entrepreneurial capitalist class would unleash an economic boom. The markets understood this was nonsense and refused to fund borrowing for the giveaway, smashing apart the Conservative coalition of mortgage-payers in the process.
The response to the tactical misstep – as it has been from the Labour Party and many of the liberal pundit class – should not be to default to a more “responsible” application of the wider strategy, but to point to the continuities between what Truss attempted, and what has been the central tenet of Conservative economic policy since 2008: that the maintenance of profits is foremost whatever the human consequences; and if that means cuts, so be it.
That is why the Workers Can’t Wait petition is so important. That “there is no money left” is untrue; it lies in the bank accounts of the banks and big business. The debate should be over recovering it and restructuring our economy to prevent private capital from hoarding profits at the expense of the many.
The signs so far suggest that the Labour leadership has accepted the belt-tightening narrative – although there remains a struggle about how it will respond when faced with the reality of the public sector cuts implied by following Conservative fiscal rules. That struggle is why we must build the movement against austerity, setting out the case for what the economy should – and must – look like if it’s to defend and advance the living standards of all workers. The Workers Can’t Wait initiative provides a framework for that alternative vision –
- Britain needs a pay rise – National Minimum Wage raised to at least £15 an hour for all; the pay rise public sector workers are asking for; increase Statutory Sick Pay to a real living wage for all from day one.
- A social security system to end poverty – scrap the 2 child benefit cap, reverse the Universal Credit cut and extend the uplift to legacy benefits; boost & inflation-proof benefits; for a minimum income guarantee.
- Control costs – energy price freezes now at April 2022 rates, cap rents and basic food costs.
- Stop the corporate rip-off – public ownership of energy, water, transport, broadband and mail to bring bills down and end fuel poverty. Lower public transport costs. Higher taxes on profits and the super-rich. Open the books – back the workers’ commission on profiteering.
- Universal, comprehensive public services – stop cuts and privatisation; Save our NHS – for a national care service; properly fund local government. Tax wealth to fund our public services.
- Homes for all – no evictions or repossessions; tackle the homelessness emergency; fix the housing crisis with a mass council house building programme.
- For the right to food – enshrine the right to food in law; universal free school meals all year; for a National Food Service.
- Decent jobs for all – for full employment; end insecure working and ban zero-hours contracts; for the right to flexible work on workers’ not bosses’ terms.
- Defend and extend our right to organise – reverse anti-trade union laws and repeal the draconian anti-protest laws; ban fire-and-rehire; for full union rights to bargain for better pay and conditions.
- End austerity for good – invest in our future with a Green New Deal – end the dependency on fossil fuels and soaring oil and gas prices; for a massive investment in renewables, green infrastructure and jobs; insulate buildings to bring bills down.
So, add your name, share it in your network and take it your labour movement and community groups for endorsement – and join the struggle to say no to the establishment’s attempt to create a “permanent austerity consensus.” We need to build an economy that meets the needs of people and planet.
- You can find the Worker’s Can’t Wait demands – and join over 22,000 people in support here.
- We’ve been publishing a series of articles for each of the Workers Can’t Wait demands, you can find them all here.
