The Chancellor’s economic plans offer little hope for the future and yet more austerity, writes Ken Livingstone.
THE Tory Chancellor Philip Hammond’s Autumn Statement confirmed that in the years ahead for Britain the picture is pretty gloomy — tax receipts will fall, inflation will rise, wages will stagnate and growth will decline.
Contrary to some claims in the media in the run-up to this week, the Autumn Statement also confirmed the failures — and the continuation of — the Tories’ ideologically driven austerity economic policies over the last six years, where those who did nothing to cause the global economic crash have paid the price of the pain that followed.
People have still seen no rise in real pay — which has barely kept pace with cost of living — and average earnings at the end of this decade will, after inflation, still be below their level prior to the recession of 2008.
In Tory Britain today, with worse economic times to come, already five million disabled people are living in poverty, millions of jobs have become more insecure and cuts to social care have left one million people without the support they need.
Unite general secretary Len McCluskey hit the nail on the head when he said this week that now was time for boldness to reshape the economy, but instead we saw “timid” commitments on investment and a commitment to deepening the “economic shock of never-ending austerity.”
Despite the Tory spin, the reality is that millions of people are worse off and talk of a “long-term economic plan” has long been forgotten.
As shadow chancellor John McDonnell put it: “The figures speak for themselves: growth down; wage growth down; investment down. The deficit target, failed. The debt target, failed. The welfare cap, failed. The verdict could not be clearer.”
And, as he added, “the downward spiral of austerity and the failure to invest have left the economy in such a fragile state that growth has now been revised downwards, while borrowing and debt will now be higher than expected.”
The Office for Budget Responsibility (OBR) observed that a key factor for the declining state of the economy is down to the vote to leave in the EU referendum.
The Tories must take responsibility here, both in terms of having the vote for purely party political reasons and then by having no plan in place for a Leave vote — indeed, while some prominent Tories talked up a £350 million extra per week for public finances, it is now being suggested there is a £290m a week hit.
Even when the Chancellor sweetened the bitter pill, what he gave in one hand, he took back with other, one example being the rise in insurance tax which will wipe out any gains from the fuel freeze.
Indeed, analysis from the Resolution Foundation showed gains for a household with an income of £30,000 would be cancelled out by cuts to the work allowance.
Perhaps just as important as what the Chancellor talked about was what he decided not to cover.
A Labour spokesperson was right to draw attention to the fact that while there was no help for social care, no additional money for the NHS and nothing for the homeless or disabled, in typical Tory fashion, Hammond found £240m for grammar schools and £7.6m to restore a crumbling country house.
As shadow health secretary Jon Ashworth said before today’s Labour day of action for our NHS: “It’s jaw-dropping that when the NHS is facing the biggest financial squeeze in its history — when waiting lists are at four million, when A&Es are in crisis — there was not a single penny piece of extra investment for the NHS.”
Likewise, the Tories have created the aforementioned funding crisis in social care with cuts estimated at £4.5 billion, yet ignored the range of voices in the sector and beyond calling for extra funding.
What was most needed most of all was commitments to tackle Britain’s chronic long-term problem of underinvestment, in areas such as infrastructure, transport, the green industries of the future and housing.
But instead, to give just one example, incredibly the small print from the OBR report showed that the overall effect of the Autumn Statement in terms of changes to housing would be 13,000 fewer affordable homes.
And as Unite said, the totally inadequate £23bn promised for the productivity investment fund “will have to work extremely hard to make amends for years of Tory economic vandalism” and “nervous manufacturers will regard the £2bn for research and development as ‘thin gruel’ when the country faces desperate skills shortages in vital industries.”
But there is an alternative.
Labour is now led by forces who not only firmly oppose and campaign against Tory austerity across the board — as the current effective campaigning on the NHS including today’s day of action shows — but as Jeremy Corbyn’s speech to the CBI this week showed, he also has a credible and coherent economic alternative to the disastrous policies of hard Brexit and Tory austerity.
Corbyn and Labour’s message of investment in our future offers hope — the Autumn Statement showed the Tories only offer more misery and despair.
First published in the Morning Star