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THERE will be big protests at the Tory Party conference. There deserve to be. Their policies have led to poverty on a massive scale. They have decimated our public services, trampled over our liberties and are now happy to do almost zero to meet our obligations to reach net-zero emissions targets.
But this litany of failure is not simply an indictment of the Tories. It is also an indictment of their policies and everything they stand for.
I fervently hope that they will be gone after the next election; it is the task of the whole labour movement to ensure that they are. Yet it will be a pyrrhic victory if we do not ensure that their policies are ditched too. The country simply cannot afford to carry on in the old way.
A key priority is to halt and reverse the misery they have inflicted on tens of millions of people. According to the Office for Budget Responsibility (OBR) real household disposable income per person will fall by an average of 5.7 per cent over the two years, which is the worst outcome since records began.
They are also now threatening to cut benefits in real terms and an axe hangs over the current state pension, with either the “triple lock” being broken again or the retirement age being increased once more.
This misery being imposed is a direct outcome of government policies. Not only have they failed to curb the profiteering of the banks, big companies and landlords, but they have added to those cost pressures themselves.
They have also opposed decent pay rises in the public sector, or other sectors where they determine policy, such as rail. Completely bogus claims on inflation and affordability are used by ministers and others to disguise a deliberate policy of driving down real wages (after adjusting for inflation).
Their determination to drive wages lower has contributed to the crisis in all our public services, from the NHS to education, transport and the criminal justice system.
Staff shortages and retention and recruitment crises are now the norm in most public services. But they are almost all struggling with the effects of chronic under-investment too.
As we see with the Raac crisis, the level of investment has not even been enough to prevent catastrophic dilapidation in key parts of our public education and health infrastructure.
This is a long-term Tory policy. In London, the historic Hammersmith Bridge is at risk of never being reopened for cars because a Tory mayor, Boris Johnson, withheld the necessary funding for normal repairs and upkeep as far back as 2008. Now we are all paying the price nationally and across a range of infrastructure for the damage caused by austerity.
We need policies to address the cost of living crisis. “The markets” will not correct themselves. Recently Tony Blair took to the media to claim you cannot tax and spend your way to recovery. Well, that is exactly what he did while in office.
Again, this is from the OBR: “Between 1996 to 2005, the UK tax burden rose back towards the G7 and EU14 averages. This was primarily due to growth in income tax and NICs receipts, which increased by 2.2 per cent of GDP due to fiscal drag as earnings rose faster than inflation, and policy decisions to increase NICs rates.”
Blair is not even true to his own history and now travels the world selling snake oil. We should simply say we are not buying it.
Note too from the OBR’s analysis that government finances actually improve with higher wages.
The current government’s determination to push real wages lower actually has the effect of pushing down its own tax receipts (and the public sector deficit higher). When the opposite happened under Blair and Brown, government finances were significantly improved by raising real wages, which is perfectly logical.
The current crisis reveals that it is austerity which is unaffordable. Failure to invest is a recipe for crumbling infrastructure, housing shortages, deteriorating public services and low productivity. We have all those now.
The government and the supporters of its policies seem to have very little understanding of how the economy works.
So, for example, there is lots of official handwringing about the (genuine) productivity crisis in this country, which leads to low growth and low wages.
A key part of the productivity crisis is the emergency in the NHS, with its 7.7 million-strong waiting list. Reducing that waiting list would have an enormous boost to output, to productivity and to people’s lives. But that would require paying the nurses, the doctors and the rest of NHS staff and investing in the NHS. Current policy is the blockage.
A big improvement in our basic infrastructure, housing and transport is possible if we borrow to invest. It is utterly stupid to claim that investment is unaffordable, when, by definition, there is a positive monetary return on it.
At the same time, we need to increase spending on our public services, and that means higher taxes, as Blair himself found. But this is always controversial because the reflex in this country is taxing the wrong people, essentially middle-income earners who have themselves been squeezed hard during the crisis.
Instead, big business and the rich should be the targets for increased taxation. For decades now Britain has been involved in, and sometimes led, the race to the bottom in terms of the regulation and taxation of big companies. It is a failed policy which has contributed to the current crisis.
A recent poll confirmed once again how popular these policies are, along with others such as renationalisation and increases in council housing. These policies are necessary, affordable and popular.
However, a separate poll conducted by YouGov showed a startling lack of confidence in either of the main political parties’ economic policies. Voters said that the cost-of-living crisis and the economy were among their top priorities, along with concerns about the NHS. Yet just 21 per cent of them believed that the government shared their concerns. Labour did better — but at just 23 per cent.
This degree of scepticism, with almost four-fifths of the population believing the parties do not share one of their main concerns, is a recipe for growing discontent. At the very least it will underpin the continuing strike wave, which refuses to fade away. It could fuel an even broader and more militant outbreak of discontent too.
We have to provide real answers to the crisis. Continuing the Tory policies that got us here is not a viable option.
Diane Abbott is MP for Hackney North and Stoke Newington.
Protest at the Tory Party conference: assemble October 1, Oxford Road, Manchester, at midday.
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