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Editorial: Time to ditch neoliberalism and invest in young people

AHEAD of the Chancellor’s Autumn Statement this Wednesday demands are coming from the Tory press for further tax cuts for the rich. The Telegraph leads the call for a cut in inheritance tax — benefiting just the top 5 per cent.  Others are calling for cuts in income tax — again skewed to shore up support from richer Tory voters now deserting to Reform UK.    

Against this local councils have issued today desperate warnings that key services for vulnerable children are unsustainable. These are among the 4.2 million children currently living in poverty who have already been some of the main victims of Covid austerity and the inflationary crisis. 

However, such calls could equally be made for the NHS, for schools, for fire, ambulance and emergency services, for public-sector housing and for benefits. All these basic services have been scarred by two inflationary years of corporate profiteering which has also left the bottom 10 per cent of our population 7 per cent poorer — and the top 10 per cent 7 per cent richer.

For a country already with the second-most unequal income distribution in Europe, calls for tax cuts reveal the crass insensitivity, as well as the political panic, of our rulers.

The Trade Union Congress has welcomed Labour’s New Deal based on productivity and growth. Both are desperately needed. Britain has one of the lowest levels of growth anywhere and its spending on research and development is among the lowest among developed economies.

Yet Labour’s New Deal is very largely based upon “partnership” with the private sector. In return for commitments to invest, corporation and other taxes will be cut — with the additional possibility of actual new funding for AI, 5G and green technology.   

Unfortunately policies of corporate partnership have been tried before and largely failed. They are even less likely bring results now. Immediately many companies are struggling with vast debt piles and very high interest rates.  

Longer-term there is the continuing problem of ownership and control.  

Most of the major industrial companies quoted on the British stock exchange are owned by banks and investment companies based outside Britain, mainly in the US. Their principal concern has been to extract maximum income for themselves — which is why new industrial investment has been so low.  Currently these finance firms will want every last drop of profit.  

This is why the TUC and the wider trade union movement should be pressing for public ownership and defending the best elements of Labour’s manifestos of 2017 and 2019: that alongside all utilities being taken back into public ownership public funds for the private sector should be dependent on binding investment agreements policed by trade union board members.

The National Institute for Economic and Social Research, hardly a radical body, last week called for an increase in public funding from 2 to 3 per cent of GDP for a five-year period focused on digitalisation, decarbonisation and transport infrastructure.  

An equal priority should be investment in the existing public sector. This, it should be remembered, is basically investment in people. It should, above all, be targeting the needs of young people, including the fifth of our children currently in poverty, who are the future creators of wealth for us all.  

Winning these priorities, and reverse neoliberal dominance, will demand urgent campaigning both now and in the run-up to the next election. 

In this the trade union and labour movement needs to build on its new strengths won through the recent defence of wages and develop cross-community links, through trades union councils and tenants’ organisations. Class politics, representing the working class as a whole, are the only antidote to the grip of neoliberalism. 

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