The Tories are failing our economy and the British people

The Tory pursuit of a ‘hard Brexit’ and bargain-basement Britain spells big dangers for the economy, writes KEN LIVINGSTONE.

TWO bits of news last week showed how, despite media spin around Theresa May and Philip Hammond “resetting” government economic policy, they remain committed to ideologically driven austerity.

The first was that the Treasury has asked government departments to prepare for cuts of 3 per cent and 6 per cent, for 2019-20.

After seven years of failed austerity, the Tories answer is more of the same.

The second was that the government will go ahead with £3.7 billion worth of cuts to personal independence payments (PIP) which will hit 160,000 disabled people, who will see a loss in their income as a direct effect of the changes made by the government to how PIP is awarded.

Alongside this, the mask of a more caring Tories under May slipped when George Freeman, head of the No 10 Policy Unit, dismissed the needs of people with mental health conditions, saying support should go to “really disabled people” rather than those who are “taking pills at home who suffer from anxiety” — in direct contrast to May’s own recent comments on mental health and two recent tribunal judgements.

There should be little doubt then that Tory austerity is inhumane — but it is about political ideology and not economy necessity.

The key messages we need to get over in the coming months are therefore that the economy needs a radical change of direction and that the Tories’ vision of a “hard Brexit” to create a bargain-basement, tax haven Britain will make a bad situation a lot worse.

Again and again the Tories have failed to focus on what is best for the economy and instead focused on how to make short-term gains in terms of political positioning.

We see this most obviously at the moment with May’s approach to Brexit. Her hard Brexit policy aimed at appealing to hard right voices on immigration, rather than the good of the British economy. As John McDonnell put it: “The government is hurtling towards a chaotic Brexit that will damage our economy, and hurt the poorest and most vulnerable most of all … By pulling up the drawbridge and tearing up longstanding ties to Europe, we will inflict huge and unnecessary pain on our society.”

Even before the EU referendum, this Tory government has been guided by a combination of an overarching attachment to neoliberalism and this kind of short-termism in policy-making, meaning we have seen cuts in government investment over the last six years, when the economy has been crying out for essential investment spending.

With interest rates for government borrowing at nearly all-time lows and the economy faltering, now is the time for a major, ambitious programme of government investment.

But the Tories’ commitment to austerity means they simply will not do it. In contrast, Labour under Jeremy Corbyn’s leadership stands for investment in our future.

As part of this, Labour is committed to connecting the whole country with fibre-optic broadband. Labour is committed to real investment in our transport infrastructure, including through a publicly owned railway system. And Labour is committed to building at least a million new homes, of which at least half will be council homes.

All of these things are not only essential for Britain to be a modern and relevant economy, they are also essential for people’s living standards and quality of life, and to enable us to pay for the public services we need.

The Tories’ failures in the area of investment have also meant Britain is lagging behind in terms of productivity. It now takes a typical British worker five days to produce what a typical German or French worker produces in four.

Without investment, improvements in productivity and robust economic growth are hard to achieve, and this means it’s hard to improve people’s living standards and public services so we can live in a decent society.

Instead, we have seen what Bank of England governor Mark Carney termed a “lost decade” for earnings as wage growth stagnated.

With the Tories committed to deepening austerity and a hard Brexit, we can expect a deepening cost-of-living crisis in the decade ahead.

More than ever, the British people need a Budget this year that has a positive vision for the future — a vision which gives a real industrial strategy to the country and the levels of investment we need. Instead, we see a Prime Minister and Chancellor committing to permanent austerity.

If we are to turn this situation round, it will require a bold and radical vision in terms of economic policy. The Labour Party and the entire labour movement needs to come together around such a vision, to defend living standards and stand up against the Tories’ disastrous economic and social policies.

For those who still seek to undermine Labour’s elected leadership, such as Peter Mandelson who claims he works to get rid of Corbyn every day, it’s time to understand that permanent destabilisation of Corbyn and his team does nothing to help us with this urgent task.

First published in the Morning Star.