George Osborne gave his economic speech in Birmingham yesterday lying to the Tory party and lying to the British people. It would be too kind to say that his take on the state of the economy was an ideological statement-though it was. His comments on the state of the economy fly in the face of the known facts.
He started by claiming yet again that the Labour Government left the economy in a mess. There was no mention at all of the role of the banks and the financial sector, just bile heaped on his predecessors. There was certainly no mention that in terms of real economic indicators that the measures taken by Alistair Darling had pulled the economy back from the brink and that growth had been restored. Restored that is until the Osborne mini budget in May of this year.
Osborne’s theme is the deficit, “This burden on the British people”. Nobel Prize winning economist Paul Krugman has an answer for that. “The demand for immediate austerity is based on the assertion that markets will demand such austerity in the future, even though they shouldn't, and show no sign of making any such demand now; and that if markets do lose faith in us, self-flagellation would restore that faith, even though that hasn't actually worked anywhere.
“Osborne is treating the economy as an experiment, one that all sensible economists believe will go badly wrong”.
As Prof Danny Blanchflower has noted, “The secret Treasury analysis reported by the Guardian shows that Slasher Osborne's rash austerity budget will result in at least 500,000 public sector jobs and between 600,000 and 700,000 jobs in the private sector being lost by the end of this parliament. Sad but true.
"The drop in the number of private sector jobs comes about because many private sector workers are dependent on the public sector for their livelihoods. Cuts in public spending put them out of work. And things may be even worse than that. Many self-employed obtain significant proportions of their work in the public sector, and even though this may not put them out of work it may seriously reduce their incomes.”
Osborne’s experiment will cause pain, real pain as unemployment rises and the economy contracts.
Then there are the great lies. Osborne proclaimed, “I believe in public services, I believe in fairness.” The rank stench of hypocrisy must have hung over the conference hall at that point.
Osborne spoke of “public service reform.” Presumably he also believes that the London Blitz was a necessary measure of town planning. Repeating the mantra that “we are all in this together” Osborne again referred to those forced to live on benefits as making a lifestyle choice, “one that we can no longer afford”. There was no mention however of where the necessary jobs are going to come from that would give the unemployed hope.
Just when you would think that this man cannot get any worse he launches a Blitz of his own on the foundations of the welfare state. Family allowance was introduced to ensure that those with children were given additional assistance, and over the years mutated into child benefit. The benefit is universal to make sure that no child suffers. But then the Tories have no concern for child welfare, only for money. There is a smokescreen that talks of taking it from higher earnings taxpayers but the reality is that there is no justification for the measure other than the ideology of neo liberalism.
Today’s Daily Mail reports the measures as an attack on stay at home mums. It is in reality an attack on the foundations of the Welfare State. Ed Miliband is already on record as defending this universal benefit. He must now lead the battle to defend it.
See also: http://unisonactive.blogspot.com/2010/10/attack-on-universal-benefits.html
UNISON response to Osborne's speech http://www.unison.org.uk/asppresspack/pressrelease_view.asp?id=2003
STUC response to Osborne's speech: http://www.stuc.org.uk/news/784/stuc-on-chancellor-s-conference-speech
