We commented in the middle of last month that amidst the chaos and political uncertainty at Westminster one thing was clear. This was, that despite the media focus being on the plotting and ambition of careerist, already well paid MPs and Government Ministers, “when the music stopped” it would be workers and their families who would be expected to pay the price of their economic incompetence. This has happened already with the Bank of England’s decision to raise interest rates and thus increase mortgage and other credit costs compounding the already intolerable economic pressures of the “cost of living” crisis.
This was the first marker of how those in control of the economy want to re-shape the debate about how public policy moves forward. The next much previewed event happens at Westminster on 17 November when the new Chancellor of the Exchequer sets out his public expenditure plans. This continues to be constantly previewed in the context of an alleged “black hole” in public finances that now “has to be filled”. Again, speculation of how this could be done not only accepts as a given that there is such a “hole” but revisits all the old lies of over a decade ago in relation to the concept of “austerity” and the economic illiteracy of discussing a sovereign state with its own currency as if it is a household with a fixed budget.
A useful research report that has just been published by the Progressive Economic Forum explores and indeed demolishes the concept of the economic “black hole” pointing out that, if the very government accounting rules that the new Prime Minister employed as Chancellor were applied to the Government books today, no such “apocalyptic” deficit exists.
In short, this report emphasises how, as always, economic forecasts can be used to present political decisions around them as unavoidable and non-ideological when they are quite the reverse. In this way, to frame economic discussion around a projected economic “black hole” in the government finances is a deliberate, reactionary deceit, founded on the “there is no money” lie. We’ve been in that austerity horror movie before – it failed as an economic policy and inflicted nothing but misery and shortage on the mass of the population. The ultimate proof that it was a lie was shown when the pandemic first struck and all the economic leverage that could have been previously deployed across society in a strategic manner was immediately available and could be called upon to introduce furlough and other schemes.
The reason this “battle of ideas” matters is that for our Union at all levels and across all sectors an attempt is and will be made to push us into accepting that there is no alternative to a future of pay cuts, pension reduction, the rationing of basic services and the increasing privatisation of formerly public provision. In order to defend public services, we and our trade union allies will refuse to do so.