Corbynomics Is The Best Antidote To Austerity
I AM speaking at the Labour Assembly Against Austerity conference in London tomorrow on why Corbynomics works. It is abundantly clear that the austerity agenda the government has pursued since the Tories came back to power in 2010 has failed on every objective measure.
First they said they would eliminate the deficit by 2015, then by 2020, but have now admitted defeat and abandoned that goal too. They also said they would reduce government borrowing, but actually increased it by more than half a trillion pounds.
Britain’s gross domestic product (GDP) — ie the monetary value of all the goods and services the country produces — has barely clambered above the pre-2008 financial crash. This anaemic recovery would be even more feeble were it not for the economic impact of immigration into the UK over the last eight years.
Furthermore, despite the government’s claims about the creation of new jobs, productivity has only just returned to pre-2008 levels and still lags way behind every other G7 country. According to the ONS, output per worker in the UK is on average 19 per cent lower than the rest of the G7.
And while wages in Britain have fallen by 10.4 per cent since the financial crash, workers elsewhere in Europe have seen their wages rise over the same period. Only Greece has seen as big a reduction as Britain, while wages in Portugal have dropped by 3.7 per cent.
By contrast workers in France have seen a 10.5 per cent increase and Polish workers have had an uplift in their wages amounting to 23 per cent. Not only have British workers seen their wages fall, they also have to work the longest hours in Europe to make ends meet too. The UK’s average working week is now 43.6 hours, while the European average is 40.3 and France limits the working week to 35 hours.
It was not surprising that recent research by the Money Advice Service showed the precarious position of huge numbers of British households.
Their findings revealed that the assault on living standards has left nearly 17 million people of working age throughout the UK with less than £100 in the bank. And a report by the Joseph Rowntree Foundation found that more than half the people living in poverty in Britain are in work.
These alarming facts vividly illustrate that the last six-and-a-half years of government-imposed austerity have been a catastrophic failure. They also clearly show the benefits of Jeremy Corbyn’s alternative economic programme.
Of course, we have been here before following the 1929 financial crash. Sadly lessons were not learned from that period, both in terms of avoiding the crash in the first place and in how best to respond to it. The 1930s were scarred by mass unemployment and poverty, as ordinary working-class people were subjected to huge public spending cuts.
The economic situation only improved when the nation started preparing for war. But as Tony Benn said: “If we can find the money to kill people, we can find the money to help people.”
This is precisely what Jeremy Corbyn is proposing. By investing in the economy we can create decent, well paid, secure employment, grow the economy and generate additional tax revenues that can then be deployed to expand public services.
The plan to establish a National Investment Bank with a £500 billion investment fund will transform Britain’s infrastructure, revive manufacturing, boost renewable energy and nurture the digital technology sector.
The proposal to build a million new houses before the end of the next parliament, 500,000 of which will be council homes, will also deliver a huge economic stimulus. Research for the Homes Builders Federation, on the economic footprint of house building, shows that a million new homes would create around 900,000 jobs.
And the cost of providing new council houses is negligible, because nearly all the building costs can be covered by the rental income.
Consequently, lifting the restrictions on councils to borrow to build new council houses poses no additional financial burden on the public purse. In fact it would bring down the colossal £9.5bn private-sector housing benefit bill by providing lower priced alternative accommodation and thereby reducing government expenditure on subsidising housing.
People are crying out for a different approach. Millions are trapped in expensive privately rented dwellings unable to obtain a lower-priced council house or afford a mortgage to buy their own home. Millions are stuck in insecure low-paid employment with little or no prospect of promotion. Millions have seen the public services on which they rely systematically destroyed. And millions have been forced to endure the indignity of social security cuts which have left many utterly destitute and reliant upon charity.
The economic and social benefits of Corbynomics are therefore enormous and will help Labour win in 2020.
- Chris Williamson is the former MP for Derby North. The Labour Assembly Against Austerity Conference will be held tomorrow at Student Central (previously ULU) on Malet Street, WC1E 7HY.