Wednesday, October 07, 2009

Tories: cutting off the economy's nose

During the Lib Dem conference I did find myself thinking "Ah, Clegg is playing Tories, they grow up so fast" with all his sweet savage cuts business, but now the Tory conference has descended upon the world like the dark shadow of things to come it's reasonably easy to see that here we have the masters at work.

There's no vague hand waving towards cuts here it's simple curt orders - "you, pensioners, get back in the mine shaft" they are just so domineering!

There are contradictions of course. It's difficult to say the old will have to work longer, public sector workers will lose their jobs and the sick will be hoofed off invalidity benefit and then say "We're all in it together." Well clearly we're not.

Even some Tories recognise that it's a hard sell to convince people that have just lost their job or their home that the UK is but one nation under God. As Ken Livingstone said a shadow chancellor that concentrates on an agenda of cuts without a single word about how to repair the economy is displaying economic illiteracy.

He goes on;

"In reality, claiming that cutting public spending is the main issue facing the country, makes as much as a doctor focusing purely on the symptoms rather trying to cure the disease which causes them.

"The position of public finances has deteriorated for two reasons. First, because bailing out the bankers and their shareholders is projected to cost a mind-boggling 9.5% of GDP in the current financial year. Second, because the worst collapse in economic growth since the second world war has seen tax revenues fall by a projected 3.4% of GDP this year.

"In other words, as in any serious recession, tax revenues have fallen with output, profits and employment, while immense sums have been transferred from taxpayers to bank shareholders. These two items, the fall in tax revenues and the bankers' bailout, far outweigh the rise in inevitable rise in state benefits as people lose their jobs."

It's a good point that the media do seem to be ignoring. By accepting that cuts in public services is somehow a useful economic measure needs rather more scrutiny than simply tutting and saying "Oh, that doesn't sound very nice."

Laying off workers at a time of rocketting unemployment, for example, may sound like a saving but it's a measure that deepens the economic problems we face rather than cures them. The Tories may be ramping up the rhetoric on how they are prepared to take 'tough decisions' like sacking people they don't know or attacking the pensions of people they simply would not mix with, but it doesn't make them any the less vacuous.

Essentially we have a party of deregulation and tax cuts for the rich seeking to capitalise on an economic crisis that was caused by deregulation and pandering to the rich. I don't think we should buy into that.

1 comment:

Strategist said...

Thanks for picking that Ken intervention up, it is precisely on the money.

The key point about Osborne is that, despite all the compassionate conservatism stuff of recent years, he is a free market Thatcherite who really believes that all we have to do is "get the state off the back" of the private sector in this country, and privately-led economic growth will come roaring back.

We really need a debate about this, because I'm not so sure that it will, and even if it does, it will be the wrong type of economic growth that will knacker the environment.

So we're looking at two terms of a government with a lose-lose economic development policy. I'm glad Ken's bothered - I wish everyone else could rouse themselves to be so.