Unity! Why we need an alternative economic strategy by John Foster The public sector cuts being imposed by George Osborne are doing irreparable damage. The Institute for Fiscal Studies says that the 2012 budget cuts were ‘twice as big’ as those inflicted on the public sector between 1975 and 1982 and their extension to 2017 would mean ‘the longest sustained cuts in public spending since the Second World War’. Since present government took office and December 2011, 232,000 jobs were lost in local government alone. And this is only the beginning. Osborne’s cuts are scheduled to continue at a real rate of 3.7 per cent annually for five more years. For the economy as a whole these cuts are crazy. The only gainers are Osborne’s pals in the City who want spare state to cash to bail them out. The cuts are killing the productive economy and increasing long-term debt. Britain’s economy is now over 4 per cent smaller than it was in 2007 – the only major economy to have contracted to such an extent apart from Spain. It is still contracting. This is why alternative economic policies, based on active state intervention, are needed. The last couple of years have seen a transformation in attitudes to such intervention. In 2010 the TUC backed the People’s Charter. In 2011 it additionally called for alternative economic policies based on expanding the public sector. What we need now are specific demands that can unite trade unions and communities to campaign politically and add up to a coherent strategy that can rescue our economy. The first demand is obvious: stop the cuts. This is the quickest way of restoring consumer demand: end the insecurity of imminent job loss, halt the new pensions levy, reverse the
benefit cuts and end a wage freeze that is currently cutting real incomes by up to 3 per cent a year. The second is for the government to create real, well-paid jobs and hence boost tax income as well as demand for goods. Council housing is one obvious area. There is desperate need and the private sector has failed – house building has collapsed from 180,000 in 2006 to 120,000 last year, the lowest since the 1920s. Building houses under local democratic control also makes it possible to introduce comprehensive energy saving with green technology – another key area for investment. Equally essential is the demand to take water, energy and transport back into public ownership, end extortionate pricing and stop the state subsidies to monopolist owners. There must be action to stop closures in the productive economy, to take over failing manufacturing enterprises and to penalise companies that shift production overseas – even if this means defying the EU directives. Can this be paid for? Yes, easily – by imposing a tax on the City’s financial transactions, reclaiming the £100 billion lost through tax evasion, closing down Britain’s many tax havens and reversing Osborne’s tax cuts for the rich and on company profits. What we can’t afford is austerity. This is actively destroying national wealth by shrinking the economy – with between £50 billion to £100 billion lost every year compared to 2007. What’s needed is a mass movement that can remove this government of financial speculators and ensure the Labour Party adopts the alternative policies needed save our productive economy – in the interests of the vast majority of the population.H John Foster is a member of the Communist Party’s economic commission
Communists at the 2012 Tolpuddle Rally
Beware of regional pay! by Liz Payne The Coalition has made no secret over recent months of its intention to introduce regional pay in the public sector whenever it can get away with it. The idea is to con everyone that there’s already huge regional variation in the cost of living and that pay in the private sector is based on local market conditions. Yet, research shows this to be a complete fabrication. There’s little regional variation outside London and the majority of larger private firms pay national not regional rates. The truth is this is a thinly disguised attempt to impose further massive wage cuts on the public sector, enhancing its attractiveness to profit-seekers, as jobs and services are privatised. The whole thing is designed to cause maximum division and conflict between groups of workers and break trade union power in national pay bargaining. It won’t be only public sector workers who suffer. Wage cuts in so-called ‘lowcost’ areas (for which read ‘already poor’) will increase skills shortages and hit services to the most vulnerable. Slashing spending-power will in turn further depress struggling economies. Private sector businesses will close with further job losses and misery in a spiral of decline. It’s all part of the age-old ruling class strategy of ‘divide and rule’. Stand together against regional pay! Always say ‘Never’! H Liz Payne is a Unison activist in the South West and the Communist Party’s national women’s organiser