Austerity can be easily replaced with investment. PAUL SCARROTT explains
THE re-election of Jeremy Corbyn as Labour leader will provide a huge boost to the mass movement against austerity.
Unlike Owen Smith, his Labour leadership opponent, Corbyn has not only shown he welcomes and understands the vital importance of a mass movement against the destruction caused by austerity, he has also played a leading role in building one.
The recalibration of Labour as the anti-austerity, pro-growth, pro-public investment party has been Corbyn’s most important achievement.
The appointment of John McDonnell as shadow chancellor consolidated the development of a coherent and radical economic policy, borrowing to invest in growth and the rejection of the unsustainable policy of borrowing to consume.
Corbyn’s 10 pledges to rebuild and transform Britain represents not just an effective response to the current crisis, but also the cornerstone of a long term solution to the chronic weaknesses of the British economy — the inadequate levels of investment in production and infrastructure in particular.
His proposals for national, regional and local public investment banks provides the means to achieve these goals.
Under the leadership of Jeremy Corbyn, the Labour Party has grown to over half a million members largely because it is now an unequivocal anti-austerity party — a marked contrast to the fate of the European social democratic parties led by supporters of austerity, both in government and in opposition.
The open espousal of the austerity-lite economic policy that led to Labour’s defeats in 2010 and 2015 would lead to the defeat of anyone who challenged Jeremy Corbyn. A year ago the candidate who explicitly supported austerity, Liz Kendall won 4.5 per cent, whilst those who refused to vote against the attack on tax credits were left trailing.
Such is the shift on economic policy in the Labour Party that anyone wishing to be its leader has to at least appear to endorse the mantra: “We are all anti-austerity Keynesians now.”
This year, Jeremy Corbyn is being challenged by a candidate who claims to oppose austerity. But it should be noted that if Owen Smith had run against Corbyn last year, following his vote to abstain on defending tax credits, he too would have done badly.
Jeremy Corbyn led the way in rejecting austerity in principle, not just some of its nasty consequences.
To be plausible as an anti-austerity leader a person needs a pedigree of opposition to the dominant destructive ideology.
For a potential leader to become a convert to the new politics and economics of the Labour Party nearly a year on rings hollow.
In the first leadership debate Smith was seen to be playing catch up with Corbyn on the economy. Many of his proposals had previously been announced by John McDonnell or Jeremy Corbyn. Others such as the need for public investment were pale imitations of the original.
Owen Smith claims he will carry out Corbyn’s economic policies, but with more competence. However, that does not square with the loud support he is receiving from candidates in last year’s leadership contest who attacked Corbyn’s economic policy and previous holders of Labour treasury posts who refused to serve in Corbyn’s shadow cabinet. The same people have continued to savage the very economic policies that Owen Smith claims to support. Perhaps they are comforted by the belief that Smith has not fundamentally deviated from his earlier view that he had no differences with Tony Blair, apart from Iraq.
Owen Smith’s recent claim that an influx of migrants “caused downward pressure on wages” shows a failure to understand how it is austerity that is damaging working people’s lives. In contradiction to the claims of Owen Smith, immigration makes a net contribution to the economy. Migrants to Britain create twice as many jobs as their proportion of the population. They make a net direct contribution to government finances of about £20 billion per annum.
On zero hour contracts, Owen Smith also reveals an inability to break completely with the pro-austerity, neo-liberal framework. When he was recently asked what minimum hours would be required by law, he suggested it could be as little as one hour. To be committed to so little on such a clear cut issue now indicates a willingness to tinker with the pro-austerity framework rather than overthrow it.
A Labour leader who continues to follow a path of opposing austerity in principle will not be able to maintain the support of those in the Parliamentary Labour Party who insist on deference to the Tory Party and its cheerleaders in the press. A Labour Leader who does not oppose austerity completely will suffer the same fate as other social democratic leaders like François Hollande.
Jeremy Corbyn is a genuine anti-austerity leader, with a real alternative. Everyone who wants to end this crisis and the disastrous effects of austerity will be rooting for him to win.
Paul Scarrott is a supporter of the Labour Assembly Against Austerity. LAAA will be hosting a major conference on October 22 with Diane Abbott MP, Catherine West MP, TSSA Generla Secretary Manuel Cortes and Steve Turner of Unite the Union & People’s Assembly Against Austerity – tickets and information at http://bit.ly/laaaoctober22