Lessons from a decade of failed austerity

New analysis published by the TUC this week has revealed just how much a decade of cuts has harmed millions of lives

We all need good schools and hospitals, safe neighbourhoods and a decent home. Parks, sports centres, libraries and colleges are important too – they help people flourish.

But new analysis published by the TUC this week has revealed just how much a decade of cuts has harmed millions of lives.

It also shows that working class families have lost most. Because when services are cut, only the wealthy can pay for private services instead. Working-class families simply lose out.

That’s why we’re calling on the government to rebuild and restore our public services, so that whatever your background you get a fair chance in life too.

Widening class gap

The new analysis by Landman Economics shows that the working classes have lost most from a decade of public services cuts.

The figures below are for England, and the services included in the analysis are health, schools, early years, social care, housing and police.

Impact on households

Families in the lower half of household earnings have lost services to the average value of £696 (annually), compared to £588 for those in the upper half.

The largest losses were for the lowest earning decile of households, at £829, closely followed by the second lowest decile at £794.

However, financial value alone does not tell the full story. Wealthier households can more easily absorb these losses by paying for services in the private sector. But low and middle-earning households are much less able to afford it.

The relative impact is shown more clearly when the losses are presented as a proportion of earnings, as in the chart below. For the lowest decile, the cuts are equivalent to almost a fifth (18%) of their earned income, compared to just 0.4% for the highest decile.

Impact on life chances

Cuts to services affect not only quality of life, but also future life chances.

High-quality provision of services like education, health, disability services and social care can make sure that everyone has a good childhood a decent quality of life. 

Other services allow people from working class families to gain experiences that only wealthier households can afford through private incomes – such as parks, recreation centres, youth clubs, libraries and cultural events.

Reverse the cuts

It’s clear that the last decade of services cuts are widening the class gap.

Everyone deserves to live near a good school or hospital, not just the wealthy. It’s time to reverse the cuts and rebuild our once proud public services.

Lessons from a decade of failed austerity

Full report here.

A decade on from the global financial crisis, the British economy faces increased risk of renewed recession. Alongside weak domestic growth, global economic growth is at its weakest since the crisis and the risk of a no-deal Brexit remains high.

Any preparation for recession must involve learning the lessons of the government response to the last one.

This paper shows how the cuts imposed after the last recession, both in the UK and in much of the developed world, harmed economic growth, with a heavy impact on workers’ pay.

Overall, pay growth has halved across OECD countries in the decade since the GFC. In real terms, annual pay growth has been below one per cent a year for two thirds of countries.

Policymakers and politicians wrongly attribute this entirely to ‘productivity’, despite a failure to find convincing supply-side explanations for the change in growth at a time when controversial policies are acting on demand.

Calls for government expenditure in the face of renewed recession are already widespread, but ‘austerity thinking’ still constrains the options for fiscal policy going forwards.

Recommendations

  • The government should ask for an independent review of how the Office for Budget Responsibility and Bank of England judge the impact of government expenditure on the economy, assessing the critical assumptions on multipliers, the output-gap and the ‘NAIRU’ given the international experience of the austerity decade.
  • Immediately deploy fiscal policy to support aggregate demand according to this changed view, expanding government (current) expenditure on public sector salaries and services.
  • Fast-track increases in public infrastructure spending to the OECD average of 3.5 per cent of GDP.
  • Increased expenditure should be financed by borrowing rather than increased taxation in the first instance. This is not equivalent to deficit spending, as a stronger economy will improve the public sector finances.
  • Use fiscal policy as part of a wider plan to deliver sustainable growth across the UK, including investing in the public services families rely on, the skills workers need for the future, a just transition to net zero carbon emissions, and giving workers a real voice at work. 

Meet author of book on austerity – Tues 29 Oct.

Nathalie Olah will be speaking about her new book, Steal As Much As You Can (How to win the culture wars in age of austerity)

Tuesday 29th October
at Black Gull Books
East Finchley,
121 High Road,  N2 8AG

Event starts at 7.30pm.
Talk will be followed by a Q&A and book signing

Registerhere at Eventbrite.

About the book…..

For many, the 2010s have been a lost decade.  

Tory austerity has created suffering for millions, as well a generation beset with financial insecurity and crisis. Yet our TV, film, music, art and literature have never looked so rich, or so posh. During a period of immense struggle, the experiences of the majority have been pushed to the margins of our collective culture by the legacy media and its satellite industries – making it hard, if not impossible, to challenge those in power.

Steal as Much as You Can is the story of how this happened, exploring the rise of affluence in mainstream storytelling, and the corrosive effects of neoliberal and postmodern culture. By rejecting the established routines of achieving prosperity – and encouraging us to steal what we can from the establishment routes along the way – it offers hope to a bright and brilliant generation whose potential has suffered under these circumstances. A generation who, through no fault of its own, has become increasingly frustrated by our increasingly unequal society.

Stolen by Grace Blakeley: Political Education and Building Power

For decades, it has been easier to imagine the end of the world than the end of capitalism.

Register here.

In the decade leading up to the 2008 financial crisis, booming banks, rising house prices and cheap consumer goods propped up living standards in the rich world. Thirty years of rocketing debt and financial wizardry had masked the deep underlying fragility of finance-led growth, and in 2008 we were forced to pay up.

The decade since has witnessed all kinds of morbid symptoms, as all around the rich world, wages and productivity are stagnant, inequality is rising, and ecological systems are collapsing.

Stolen is a history of finance-led growth and a guide as to how we might escape it. We’ve sat back as financial capitalism has stolen our economies, our environment and even the future itself. Now, we have an opportunity to change course. What happens next is up to us.

Event Details:

UCU MDX Branch, MDX Politics Dept & Hendon Labour Party are delighted to host writer, broadcaster and policy expert Grace Blakeley as part of the book launch tour for Stolen: How to Save the World from Financialisation.

Grace Blakeley is a research fellow on the IPPR‘s Commission on Economic Justice, commentates on economics for the New Statesmen and has appeared on numerous political and current affairs programmes.

A panel of UCU, Politics Dept and Hendon Lab members will discuss the themes of the book followed by an audience Q&A and a book signing.

Event Location:

The Boardroom: C219. 2nd Floor. College Building. Middlesex University. NW4 4BT

Ask at reception to the left inside the main doors for directions if needed.

Transport:

Tube: Hendon Central

Thameslink: Hendon

Buses: 143, 183, 326, 643, 653, 683

Book Launch: Steal As Much As You Can: Nathalie Olah on Class, Culture and Austerity

Nathalie Olah talks about the impact of austerity on the culture industries and how a new generation has emerged to challenge it- with a Q&A

About this Event

The 2010s have been a double-edged decade. Socioeconomic factors have led to the widespread and increased disenfranchisement of poorer people from the mainstream media and the institutions shaping it. This has coincided with a growing number of people from low income backgrounds also receiving better educations than ever before, and having the means at their disposal to both name and resent it.

Steal as much as you can is the story of how this bright generation came to be, and what effective means are still at their disposal to challenge the establishment and ultimately win. By rejecting the established routines of achieving prosperity, and by stealing what you can from them on the way, this book offers hope to anyone who feels increasingly frustrated by our increasingly unequal society.

Link here.

General Election Now / #StandWithCorbyn

General Election Now rally with Jeremy Corbyn this Thursday (July 25, 6pm, Parliament Sq.)
** RSVP, share & invite friends on Facebook now here. **
On Thursday, join Jeremy Corbyn in Parliament Square and send a message: we need a General Election. Tory incompetence has led to a deadlocked Parliament, a deeply divided country, and a government led by a man decided by just 160,000 Tory members. We need a General Election, and Parliament is where we’ll pile on the pressure. Will you be there?
** RSVP, share & invite friends on Facebook now here. **

You’re being gagged

On 30 July Tory councillors will vote to bar residents from speaking at council committee meetings. Tory councillors will vote to allow only two residents to raise one question each, in writing, on items on a committee’s agenda. After 30 July you, your residents’ association or interest group can no longer voice your concerns. Councillors will make decisions about bin collection and recycling, potholes, air pollution, development, libraries, schools, and care for the elderly and the disabled without listening to you.

What you and your friends can do now:

• E-mail your councillors to oppose this resolution

• E-mail your MP to oppose this resolution

• Go to your councillors’ surgery to oppose this resolution

• Sign the petition at http://chng.it/KgZ7gz7pk4

What you and your friends can do on 30 July: Come to Hendon Town Hall at 6pm to show your opposition to being gagged.

Who are we? Barnet Alliance for Public Services (BAPS) is a coalition of residents, campaign groups and trade unions defending public services in Barnet. We meet on the third Tuesday of each month at 6.30-8.30 at the Greek Cypriot Centre, North Finchley, 2 BritanniaRoad, London N12 9RU

Email: barnetalliance4publicservices@gmail.com

How you can help ‘stop and scrap’ Universal Credit

It is TUC policy to ‘stop and scrap’ Universal Credit. The implementation of the policy, alongside the cap on the up-rating of welfare benefits, has been shown to be causing immense hardship, and has been proven to be a substantial cause of the huge growth in the dependency of vulnerable people on foodbanks, and of evictions. 

Unite Community is organising a day of action against Universal Credit, 1 August 2019. More information and campaign materials are available at: 
https://unitetheunion.org/campaigns/stop-universal-credit/
#STOPUniversalCredit

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