UNISONActive is an unofficial blog produced by UNISON activists for UNISON activists. Bringing news, briefings and events from a progressive left perspective.

Wednesday, 9 January 2013

The Coalition Mid Term Review - Bad, Mad And Dangerous

Be warned that reading the fifty two page Coalition mid-term review is bad for the health, leaving a nasty taste in the mouth as well as the feeling of bile rising in the gullet. Smug, complacent and self congratulatory, it reeks of the politics of a blinkered ruling class, whose idea of how the majority of people live is created exclusively from repeated showings of Jeremy Kyle and exposure to Daily Mail headlines. Jokes about Ronseal aside, the performance on view was usual over-confident public school boy banter.
  Fundamentally the script has not changed.The emphasis remains the deficit, dear boy, the deficit. Long term unemployment, failing construction, manufacturing and services sectors matter not.

As all the major economic commentators highlight the possibility of a triple dip recession, neither Clegg nor Cameron appear to have grasped that their medicine is killing rather than curing the patient. To quote Larry Elliott, Economics editor of the Guardian, ”This is an economy that is going nowhere fast.” The leaders of the coalition appear not to have noticed.

The psychology of the liar is that if you repeat lies often enough, you end up believing your own. Half way through the coalition term, their favourite justification remains "that they are cleaning up the Labour Party’s mess”. The failures occurring from 2007 -2009 were entirely caused by the excesses of the banking sector. It seems almost superfluous to point out that it was not the Labour Party that bust the economy, it was a rampant financial sector that borrowed and spent on ‘financial derivatives’ and created a bubble that was bound to burst.

Both Cameron and Clegg seem to lack economic and historic intelligence (as do most of the media political commentariat) a fact that Lib-Dems seem only too willing to acknowledge every time they justify their U-turn after the election.

Look at what’s happening in Greece, they parroted in 2010, it could happen here, ignoring the economic and historical differences. Both parties seem unaware that in a long term view or in terms of international comparisons, ‘the deficit’ recedes in importance. (For a full explanation see the False Economy website.)

The diagnosis, though wrong remains the same; so does the prescription. Public expenditure is the pathogen responsible for the sickness in our economy according to this study, developed as much from neo liberalism as from economic analysis.

Neo liberalism is based on laissez faire economics which see no role for the state beyond the protection of property, propagating policies that would infuse competition and individualism into areas such as labour relations, pensions, health, and education were introduced.

Based on this philosophy, the Government embarked on its cuts programme from its first budget: £155 billion at the latest count of which few cuts have worked their way through the system. ConDem policies on education and the NHS illustrate perfectly how their policies in practice demonstrate the philosophy they have adopted; cut the funding for public provision; allow the private sector vultures to ravage the NHS and redesign the education system not for universal provision of education but to hand over it over the vested interests of the middle classes.

Local Government services will be but a memory by the time that all the cuts are through. A litany of similar accounts can be compiled across every public service. In other areas such as housing, they simply have no policies. Vague promises to increase the number of first time buyers are a hardly a response to the housing crisis.

To give their programme the veneer of respectability, in this document the Con-Dem government have resorted to the language of “strivers, hard working families, helping those who help themselves”. Nowhere however do the words or ideas or social justice occur, but then, even Ian Duncan Smith, the founder of the Tory Centre for Social justice (an oxymoron if there ever was one) has dropped that pretence.

Social justice is founded on ideas of equality and social solidarity. (For socialists, social justice is also about redressing the balance of power and influence in a class ridden capitalist society.) The Tory, sorry, Con Dem con trick aided and abetted the media is to ignore society and appeal to the electorate as individuals and consumers. Thatcher proclaimed that there is no such thing as society. The current government carries her ideas into practice.

Nowhere is this more clearly seen than in the attempts being made to dismantle what has now been called the welfare system, but better understood as social security. Those for whom capitalism is benevolent are strivers; those for whom it is malevolent are shirkers. To say the latter are treated as an ‘underclass’ is a misnomer. To be a recipient of benefits in any shape or form is to be treated as a pariah and an outsider – to be insulted as the government sees fit.

Such ideas have a long provenance in the history of laissez–faire economics.Their adherents argued against poverty relief during the Great Famine in Ireland believing "It is no man's business to provide for another" (The Economist 1847). This is the world that Dickens described, one that had hardly changed by the time Orwell was producing social reportage in the 1930s. This is a world in which the deserving poor can be distinguished from the undeserving poor. It is unfortunately a trap that the Labour Party has fallen into with their defence of “strivers” they accept the divisions that have been made.

Sometimes a little analysis goes along way, something the Labour Party should have learned a long time ago. The reality is that inequality in the UK has rarely been as sharp. The share of national income that goes toward those earning wages has been shirking since the mid seventies. Employment itself has become precarious, particularly in the immediate past period as under employment and part time employment have risen.

Unemployment is forecast to increase by 120,000 to 2.63m in 2013 because growth in the workforce will exceed the number of jobs being created. Workers have been warned to expect longer hours, a continued squeeze on pay and fewer jobs being created in a "hard year of slog”. Placing blame on unemployed individuals is as relevant as believing that the market is omnipotent. Unfortunately this delusion seems all too prevalent among the political class and all parties.

A full analysis of the benefit bill is interesting reading and available at http://www.guardian.co.uk/news/datablog/2013/jan/08/uk-benefit-welfare-spending. At 6% or so of the total welfare spend (£4.9bn); the gripes at JSA seem sadly out of perspective. Meanwhile the ‘strivers’ receive £29.9 billion in tax credits, recognised as raising 800,000 children out of poverty, but in fact a subsidy to employers who refuse to pay wages at a level that enables those families to enjoy a healthy standard of life.

It is the strivers that many liberals seek to defend. In reality forcing the national minimum wage up to the level of a living wage sufficient for sustainable life. Allowing the low pay to earn a decent income would go toward solving this problem. That of course would push the share of National Income toward labour. Likewise a commitment to create real jobs through government action toward full employment rather than mac jobs would also cut the welfare bill. Interventionism however has fallen out of fashion.

Capitalism’s inherent flaws were only too evident to the politicians who had struggled through the thirties and knew that there needed to be reform. The idea that the post war world should progress beyond the horrors of the unfettered market were so powerful that the Beveridge Report was commissioned in 1942 to produce a road map for the post war world.

The impetus behind Beveridge’s thinking was social justice. Beveridge argued that this system would provide a minimum standard of living "below which no one should be allowed to fall". This report was based on carefully gathered social survey evidence, and the evidence clearly was that those living in 'Want' were clearly those without earning power.

Has anyone in the welfare debate made the argument that cutting the benefits of those at the bottom of the system achieves only placing those unfortunate enough to be left without work in a precarious unsustainable position? Few would argue that JSA is anything other then the very bare minimum for survival. In a Britain where food banks have increasingly become a way of life such considerations count. These cuts rip the safety net to shreds.

Maybe George Osborne’s skiver won’t have pulled the curtains in the morning because there isn’t the money for heating. Just a thought George. The comparison is not with those in work and sharing the pain equally. It is simply about making the poorest poorer.

Equally Beveridge knew why child benefit was important. “Abolition of want requires, second, adjustment of incomes, in periods of earning as well as in interruption of earning, to family needs, that is to say, in one form or another it requires allowances for children. First, a substantial measure of acute want will remain among the lower paid workers as the accompaniment of large families. Second, in all such cases, income will be greater during unemployment or other interruptions of work than during work.”

It is unfortunate that the lessons learned over half a century ago seem now to have been forgotten by our political classes. Beveridge’s insurance system was a safety net for all who paid in. But it was only part of the post war road map to social justice. To quote from that report “Social insurance fully developed may provide income security; it is an attack upon Want. But Want is one only of five giants on the road of reconstruction and in some ways the easiest to attack. The others are Disease, Ignorance, Squalor and Idleness.”

That led to the 1945 Labour Government programme committed to full employment, an Education Act, to the foundation of the National Health Service and to a building strategy for housing. There is a need for a political party that has the commitment to social justice and fighting inequality by taking on the vested interests of laissez faire capitalism. Unfortunately a Labour Party blinded by vile propaganda talks about “helping the working poor”, its shortsightedness blighting its courage.

Meanwhile it must be said that many reports over years of the end of the post war settlement have been exaggerated. This time the coalition is serious and their vandalism will shred the last vestiges of justice and dignity from working people in this country. That is the reality of the Coalition mid term report.