Shadow chancellor JOHN MCDONNELL writes exclusively for the Star as Britain braces itself for another year of austerity
GEORGE OSBORNE will today unveil another package of cuts. Unless he changes direction from everything he’s done before, they will fall heavily on women, who have so far borne 81 per cent of spending cuts. They will fall on people with disabilities. Disgracefully, 640,000 people face losses of up to £150 a week as a result of changes to the Personal Independence Payment (PIP).
Labour will oppose these Tory cuts. We will oppose them today, and we will oppose them every step of the way in Parliament. We will not allow the failures of Osborne’s economic programme to be carried by those least able to bear them.
He has failed every test he set himself. The fiscal deficit is not closed. Government debt has skyrocketed under his watch. Business investment slumped at the end of last year, whilst government investment is scheduled to dwindle over the course of the Parliament.
Zero-hours contracts are at record levels. Wages have failed to recover to their 2008 levels. Manufacturing has not recovered. Our borrowing from the rest of the world has hit record highs.
And productivity, the key ingredient to sustaining improving living standards, has slumped. The productivity gap between Britain and comparable economies like France or Germany is the biggest it has been for a generation.
Every hour worked in Germany is, on average, one-third more productive than every hour worked here.
It is a record of economic failure that should shame this Chancellor. His recovery is built on sand.
Jeremy Corbyn was elected last summer on a programme of opposition to austerity. He travelled the length and breadth of the country, enthusing people of all ages and backgrounds who were disillusioned with the Westminster style of politics.
He, and those of us who supported him, did so with promises of a different way of doing things, a new politics.
Jeremy put forward concrete proposals of how we want to do things differently: to guarantee decent wages, affordable housing and education accessible by all.
We are at the start of an exciting time for the Labour Party and for British politics.
It’s been a privilege, in the months since, to serve as his shadow chancellor and start to lay out a credible economic alternative.
This is a task of immense importance. There is a thirst for a change in how the economy is run. Support for spending cuts is draining away. With so many young people now denied the chances that those in the older generations had, whether it is living in a home of their own or security at work, there is a palpable sense that something has to change.
But it’s not enough to simply oppose what the Tories are saying and doing. We have to return a Labour government that will implement these changes. And that means not just acting as a party of opposition, but presenting in a clear and credible programme for government — a programme that looks to the future, and makes a break with the failures of the past.
That’s why I introduced my Fiscal Credibility Rule last Friday. In consultation with world-leading economists on the Economic Advisory Council, it is designed to provide a robust framework for ensuring that when Labour returns to power it will eliminate the budget deficit on day-to-day spending.
Unlike Osborne, we will do this without the need to hammer the poorest, or slash workers’ pay, or squeeze the self-employed. We’ll use growth, not cuts, to close the deficit.
But we will commit to delivering growth. Our Fiscal Credibility Rule will allow the government its full capacity to invest in the future, getting funding into the infrastructure, like new railways and renewable energy, and into the scientific and technological research that will lay the foundations for a new economy.
We will help build a high-wage, high-technology economy, with shared prosperity. That means reversing the slump in productivity with what Economic Advisory Council member Marianna Mazzucato has called for, using the power of the government to support strategic interventions in key areas and boost growth across the whole nation.
Alongside introducing the rule, however, I have also talked about how we have to do economics differently. The series of “New Economics” lectures have been a huge success, drawing sell-out crowds across the country.
We’ve discussed how to make the best use of automation and new technology. We’ve talked about how to overcome entrenched inequality. And I’ve raised the ideas of worker ownership and worker management, with new ways of running businesses that are more democratic and, the evidence shows, more productive.
I’ve talked about introducing a “right to own” for workers facing changes of ownership where they work, giving them the ability to run and manage their own place of work.
We will spend the next few years going through all those policy ideas, and many others, costing them and developing them, discussing them with our members and supporters.
For today, we will oppose Osborne’s swingeing cuts, and expose his spin. The cuts to PIP are a disgrace, and should be reversed. We don’t want to see another Budget where the cuts fall heaviest on the shoulders least able to bear them. And we want to see a real commitment to new government investment.
For tomorrow, we will develop a new, credible alternative economic policy. I hope Morning Star readers will be there with us.