ECONOMISTS casting doubt on the supposed “black hole” in public finances have sparked a row with rivals asserting that the shortfall is real and necessitates spending cuts.
If nothing else, this reminds us that economic forecasts are not neutral or objective — economics is ideologically contested territory.
The myth of the objective expert, whose policy recommendations are beyond or above politics, acts to shrink the democratic sphere and enforce an economic orthodoxy that serves the capitalist class, not us.
Though Britain is not so far gone as Italy — where a succession of nominally apolitical technocrats such as Mario Monti, Giuseppe Conte and Mario Draghi have been installed as prime ministers to pursue neoliberal policy agendas that no-one had voted for — it still removes key fields like monetary policy from democratic oversight through “independence” for the Bank of England, a legacy of Tony Blair’s government that even Jeremy Corbyn’s Labour failed to challenge.
The central bank’s experts are currently forcing a ruinous course of interest rate rises on us in the futile hope of controlling inflation, when rising prices are nothing to do with cheap borrowing and everything to do with supply chain disruption and corporate profiteering.
Ideological assumptions are equally embedded in institutions like the Office for Budget Responsibility, while Labour’s current leadership’s desire to set up an office for value for money overseeing departmental spending will also be a political body in disguise.
But the Progressive Economy Forum’s finding that if the government simply used its previous model for calculating debt — changed only in January this year — the £50 billion “black hole” would turn into a £14bn surplus over debt targets has immediate political implications.
The financial “black hole” has been on ministers’ and TV presenters’ lips for weeks.
The intent is to soften up public opinion for a further cuts onslaught — though the “austerity” inflicted on our public services by David Cameron and George Osborne did serious, lasting damage.
An underfunded, understaffed NHS with insufficient stocks of protective equipment was ill-prepared for the Covid pandemic, putting unacceptable pressure on health workers and undoubtedly raising the death toll.
Now that NHS faces a seven million waiting list and is carrying over 50,000 nurse vacancies across Britain — but ministers tell nurses who have just voted overwhelmingly to strike that there is no money to give them a real pay rise.
Other essential services are on their knees too. Schools face cutting staff next year to cope with soaring costs. The criminal justice system is in chaos, with courts looking at a backlog of hundreds of thousands of cases due to lack of funding and resources.
Public services cannot handle another round of “austerity.” They will fail those in need while the rich turn to private provision. And the demand for these cuts is coming from a government that has manipulated the way it calculates debt to claim a crisis in the public finances which looks grossly exaggerated.
The left need not focus on the figures. “The markets” are not a neutral phenomenon either, and may seek to punish a Tory government that doesn’t cough up the cuts they want.
But we do not need and cannot tolerate further cuts in public spending when sector after sector is crying out for increased investment.
The money exists, whether in government coffers or the pockets of the corporate profiteers, from which it can be transferred to government coffers, and on into public services, through taxes on wealth and on the super-profits of the fossil fuel industry.
As after the bankers’ crash of 2008, ruling-class propaganda is trying to pave the way for attacks on public services and public servants. Nurses, teachers and civil servants voting to strike show people aren’t swallowing it this time round. The government must be forced to change course.
