Since before the election, David Cameron has been telling us “we’re all in this together”, while George Osborne told us his emergency budget was “progressive”. This rhetoric has now been exposed – the budget was regressive, it cut £11bn from welfare and gave £24bn in corporate tax breaks.
But the biggest lie has yet to be fully revealed: the belief that unprecedented cuts are necessary – a consensus that spread across the political parties before the last election and is echoed daily in the media. This barrage of cuts propaganda has disabled any critical thought. Cuts, large scale public sector cuts, have become the accepted wisdom of our age. But this is not wisdom, it is dogma.
That’s why we have today published a new pamphlet “There is an alternative: the case against cuts in public spending“. In it we show that there does not need to be a single penny taken away from a single public service, or a single job lost.
It is essential we expose the fraudulent argument that the economy will collapse unless public services suffer hundreds of thousands of job cuts, pensions are slashed and pay frozen. In fact, the opposite is true and there is a growing recognition of that among even establishment economists: attacking the public sector is more likely to cause a double-dip recession than to reduce the deficit.
If, as Osborne plans, we sack 600,000 public servants in the coming years that is 600,000 people with no income, on benefits – since few jobs are being created. They will spend less in the economy, which combined with cutting public capital spending, will have a knock-on effect in the private sector. Cutting 600,000 public sector jobs will lead to 700,000 private sector job losses. We know this, because the document telling Osborne this from his own Office for Budget Responsibility was leaked to this newspaper at the end of June.
The only solution to a crisis of stagnant growth and mass unemployment is to create jobs, not to cut them. There are several areas where public sector jobs urgently need to be created.
Today there are 1.8 million families (representing over 5 million people) on council house waiting lists. There is an urgent need to build affordable housing for these people, which would also help reduce housing benefit payments by reducing the need to subsidise overcharging rich private landlords. Cancelling the school building programme will also cost thousands of jobs in the construction industry and leave tens of thousands of children with substandard facilities.
It has been estimated that over a million “climate jobs” could be created in areas like housing, renewable energy and public transport investment including high speed rail, bus networks and electric car manufacture.
Osborne and Cameron must know the effect their policies will have. They could look to Ireland to see the disastrous impact of austerity measures in this situation. The only conclusion is that this cuts programme is ideological.
But public services cuts also undermine attempts to cut the deficit in another way. As we have seen in the last week, job cuts in HM Revenue & Customs have led to serious errors and, which has gone largely unreported, record levels of uncollected tax, too – £26bn in the last year. This has left the HMRC under-resourced to even start to address the estimated £70bn lost through tax evasion each year. Worse still, Osborne has slashed 20% of staff from HMRC high-net worth unit, those staff tasked with collecting tax from the super-rich – those who go out of their way to avoid and evade tax.
This coalition government is hell-bent on cuts, because it is ideologically opposed to the collective security of public services and the welfare state, the remnants of the post-war consensus, which have been systematically attacked for the last 30 years.
My union represents workers in both the public and private sector, and they know the real division is not public versus private but haves and have-nots. As trade union members from across all sectors of society and industry gather in Manchester this week there will be unity, because we know who the enemy is – not other workers, but this government of the super-rich, by the super-rich and for the super-rich.