The Politics of Austerity

Tuesday, October 6, 2015

 

On Sunday, I joined over 60,000 people in Manchester, outside the Conservative Party conference, to march against austerity. Amidst the trade-unionists and a foray of groups ranging from GPs to communists, most striking of all was the unifying belief that austerity punishes the poor and doesn’t strengthen our economy.

 

I’m opposed to austerity for the simple reason that there is enough money in the world to go around; massive displays of wealth by Saudi oil-sheikhs and Hollywood celebrities demonstrates as much. Inequality is in many ways a more important issue than national debt, and I believe that the evidence shows our nation’s wealth isn’t being distributed fairly enough to meet people’s basic needs. For example, according to research by the Equality Trust, the richest 10% of households in the UK hold 44% of our wealth, while the poorest 50% own just 9.5%.

 

Source: The Equality Trust

 

 

These statistics present a compelling case for some sort of emergency measure to redistribute wealth. John McDonnell’s so-called ‘Robin Hood Tax’ is opposed by people who feel the market should promote fair and free enterprise; that the state should keep its nose out of economic affairs. That belief ignores the central purpose of government; to ensure the basic safety, sustenance and [economic] security of the people whom it serves.

 

The Conservative Party’s approach of small government is not a less intrusive politics – it is the politics of neglecting the masses in favour of the most advantaged in our society. David Cameron’s government has been keen to call itself the new workers’ party, by declaring war on Britain’s welfare system. The Prime Minister and his allies brand the Left as economically incompetent and morally dangerous – claiming that the Labour Party seeks to actively foster unemployment and punish those who work.

 

Such statements are, of course, fundamentally disingenuous. The political Left believes in a minimum standard of living for all. It is opposed to homelessness and poverty, and seeks to address social norms whereby misery and deprivation are imposed on people simply for being elderly, disabled or mentally ill. Members of this political persuasion also believe that it is barbaric to impose conditions on fundamental rights like access to food and clean drinking water.

 

At the same time, the Left also believes passionately in work and enterprise, and so (broadly speaking) advocates appropriate levels of inequality, to proportionately reward talent and hard work. The reality is that Western inequality has burgeoned to unjustifiable levels, fostered by austerity, which demands sacrifices from the 99% through wage cuts and inadequate public services, while the 1% are allowed to exist in blissful, unimpeded affluence.

 

Take the NHS, for example, whose 1.3 million staff were granted a 1% pay rise this year. Considering the increase in the cost of living over recent years, it has been calculated that this actually equates to, on average, a £422 pay cut for these vital public servants. The £548 million roughly required to stop this from happening is an almost paltry sum compared to the wealth of Len Bravatnik (Britain’s richest man) who is estimated to be worth over £13 billion. Indeed, £547 million is a mere 1000th of the capital assets of Britain's 25 richest people.

 

Austerity in its current form is not only unfair, but runs the risk of creating even greater misery in the future. The current government insists that it must make difficult public cuts in order to reduce our national deficit. Yet, while it is true that the UK spends around £55 billion per year on interest payments, our economy will suffer without government investment. Drastically cutting public services in health and education will lead inexorably to unemployment, deprivation, crime and poor health, which we will all need to pay for. Jeremy Corbyn has suggested a radical alternative – investment in public services, and while it may seem misjudged to increase public spending in the current economic climate, frugal investment is absolutely necessary to ensure that our economy continues to grow.

 

It is frightening to be in debt. But, if you’re in debt, it would be more advisable to buy a suit and a mobile phone, allowing you to get a decent job, than to sacrifice those things in order to continue paying off what you owe. The same principle applies on a larger scale when it comes to investing in Britain’s future. Every person without the power of self-sufficiency drains the state through higher social housing, healthcare and welfare costs. Furthermore, at the same time, these individuals have no real money of their own to consume on the high street, which reduces government income through taxes such as VAT, and so on. We have been told, over the past five years, that we must all make sacrifices to reduce Britain’s deficit. And yet, the price we pay – a 38% decrease in net income for the poorest tenth of the population – is 30% more than the rich are paying, according to Oxfam estimates.

 

There is another important reason why austerity, coupled with growing inequality, maligns our nation. It’s perfectly highlighted in billionaire Nick Hanauer’s article “The Pitchforks are Coming... For Us Plutocrats”. As Hanauer points out, time and time again throughout history highly unequal societies have descended into either police-states, or have generated revolutions. Thus, Hanauer calls for other members of the mega-rich to take action in order to secure their own futures. “The most ironic thing about rising inequality”, he writes, “is how completely unnecessary and self-defeating it is.”

 

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