how can there be any talk of recovery in this “age of austerity”?

Toffed up to the nines and luxuriating in five-star privilege, David Cameron recently told a gathering of fellow ministers and lords during the annual Lord Mayor’s Banquet at the Guildhall in London that the devastating “austerity” will be “permanent”:

The age of austerity is not just a passing phase and Britain should get used to having a ‘permanently’ smaller state, David Cameron said last night.

The Prime Minister used one of his most significant speeches of the year to say that low public spending and a ‘leaner, more efficient state’ would have to be maintained permanently in order for the UK to succeed.

He said the country would have to rediscover its traditional ‘buccaneering’ spirit for private enterprise in order to generate wealth instead of relying on the state.

His remarks are a significant shift for a leader who said in 2010 that he ‘didn’t come into politics to make cuts’, insisting: ‘We’re tackling the deficit because we have to – not out of some ideological zeal.’1

Tory cuts, ideological? Come, come…

If you can stomach any more of it, the full Daily Mail article is here.

Curiously, chief political correspondent at the Guardian, Nicholas Watt, lets Cameron and his Coalition government off the hook too, accepting his pleading that the cuts are “not out of some ideological zeal”:

In a change of tack from saying in 2010 that he was imposing cuts out of necessity, rather than from “some ideological zeal”, the prime minister told the Lord Mayor’s banquet that the government has shown in the last three years that better services can be delivered with lower spending.

Watt adding that:

The remarks by the PM contrasted with his claim after the 2010 election. In his New Year’s message for 2011, issued on 31 December 2010, he said: “I didn’t come into politics to make cuts. Neither did Nick Clegg. But in the end politics is about national interest, not personal political agendas.” […]

A few months earlier that year, in his first Tory conference speech as PM, Cameron said he would have preferred to tackle the deficit in ways other than public spending cuts.2

Click here to read the full article.

Yet this declared “change of tack” is absolute nonsense and easily refutable nonsense at that. Here, for instance, is what Cameron promised back in April 2009 at the party’s spring conference when he was a mere leader of the opposition:

A Conservative government would usher in a new “age of austerity”

So begins a rather different Guardian article, this time from politics editor, Deborah Summers, reporting on what she (and others) then described as Cameron’s ‘age of austerity’ speech. Her article continuing:

The Tory leader insisted greater transparency would help to get Britain’s finances back on track as he used his keynote speech to the Conservative party forum in Cheltenham to pave the way for sweeping cuts in public spending.

“Over the next few years, we will have to take some incredibly tough decisions on taxation, spending and borrowing – things that really affect people’s lives,” Cameron warned.3

So for the record then, Cameron has never changed tack at all. Neither for that matter have their Coalition ‘partners’, the spineless Lib-Dems, or even the supposedly left of centre Labour government. None of our main parties ever seriously discussing real alternative economic strategies, with policies differing purely in terms of how savage the cuts would “need to be”. The Tories, once in office and free to wield the axe thanks to the quiet complicity of their Lib-Dem lackeys, cutting deeper and faster because, in truth, they love nothing better than hounding the lower classes and impoverishing the poor.

Yet after more than three years of “taking our medicine”, a collective punishment very eagerly dished out by the Coalition government, there has basically been no recovery at all in any meaningful sense. Yes, GDP growth has been positive for three quarters, but even this is only at levels comparable to the end of 2009 and beginning 2010 – in other words, growth equivalent to that achieved during the last few months of the admittedly wretched and incompetent Labour government.4 So no improvement, whatsoever, and this is after three years of stagnation. On top of which, all these figures are “real” and thus “adjusted for inflation”. But then, of course, the inflation rate itself is already rather carefully finessed. Henry Blodget of businessinsider provides a helpful explanation of the effect of this adjustment, although here writing about US GDP growth back in May 2011:

The way the government calculates real GDP is to start with nominal GDP – the actual change in the output of the economy as measured by adding up all the actual sales prices (“nominal”) – and then “deflating” this number by subtracting an estimated inflation rate. Thus, the government backs into the real GDP growth number, starting with nominal prices and then adjusting for inflation.

Well, the “GDP deflater” the government is using right now – the estimated rate of inflation – is only 1.9%. As anyone who has been to a supermarket or gas station recently can attest, this assumption is preposterously low. But the effect on “GDP growth” of using a very low inflation estimate is helpful, in that it makes real GDP growth look bigger.5

Click here to read the full article.

GDP is regularly and rather casually accepted as an indicator of “standard of living”, although actually it measures something entirely different and far more abstract: the monetary value of all goods and services produced within national borders. “Standard of living” is therefore better assessed on the basis of a variety of alternative indicators including the quality of healthcare, standards in education, income growth inequality and so forth. That a string of successive governments have failed us in all these regards is widely acknowledged.

I know many who work in the NHS and can’t recall anyone ever telling me that services were getting better or their jobs any less stressful. More personally, I have worked in education for more than fifteen years and standards have unquestionably declined, whilst grade inflation is absolutely real. But then, we can all see how our public services, and the NHS especially, have become infested with managers; whilst our teachers, healthcare professionals (doctors excepted) and many other public sector workers have been put under increasing pressure, and further demoralised thanks to deteriorating pay and contractual conditions alongside flexploitation. Meantime our entire society is being steadily ripped apart by the ever-widening gulf in wealth and incomes. Much of this, of course, is Thatcher’s legacy.

Now I accept that there is indeed a great deal of waste in public spending, and pruning out levels of superfluous management as well as trimming salaries at the top could be beneficial as well as cost effective. But these are not cuts of the type being made on the ground. If the government were seriously intent on cutting back only on real waste, then it would apply its measures with something like surgical precision, but instead it brings the axe. Waste being just a smokescreen. And as with any axe, it hacks away at the bottom of the trunk. Making the most vicious cuts to welfare, which means deliberately snatching a little public money from those who can least afford to lose any, whilst simultaneously targeting the soft underbelly of our few remaining public services, which is also as deliberate as it is ideologically driven. Lastly, when it’s not cutting services, it’s selling them off instead – lowest prices, because everything must go…

Our government is now so openly committed to establishing its permanent “age of austerity” that for millions of people no hope survives that their standard of living will ever improve again – with the proposed £20bn cuts to the budget of our already broken and terribly overstretched NHS being nothing short of a final swing of the wrecking ball through Britain’s most treasured national institution.6 Indeed, a friend who is a dedicated political activist in London recently sent me a distressing email that put into better perspective (since it was founded on her own personal experience) how this talked-up “recovery” is absolutely nothing of the sort. She wrote:

Life is already unbearable/intolerable for many people in the UK on sick benefits having their benefits cut off or cut in half to £49 a week to live on, left with no money to pay bills or the water rates part of their rent, means eviction and out on the streets, living with no heat, no light, no gas, no electricity; or mental breakdown and in a mental hospital; or taking their own lives as they have nowhere to turn and an uncaring society that goes on about benefit scroungers. These people are too sick to work. This is pure fascism and no one is making a fuss in the UK – why? Where is the anger, where are the activists? Why aren’t they doing something? People who are too sick to work are being killed by this government.

Yes, as Cameron entertains an equally pampered audience from behind his gilded lectern, talking without a hint of irony about all the “hard choices” and “tough decisions” he has to make in this new age of perpetual “austerity” — does one use the fish knife for spreading one’s caviar? — people less than a mile away are already struggling to find a few coins for the electricity meter or food for the next meal. All of which elegantly sums up the age we are already living in: an age not of shared “austerity”, where “we’re all in this together” (even if we know it was the bankers who caused the crisis), but of “let them eat cake” disparity. Times, for instance, when super rich Premier League footballers (super rich by ordinary standards that is) wear shirts emblazoned with the name of payday loan sharks Wonga and no one seems to notice, no one feels ashamed, and so one begins to wonder, as my friend wrote: “Where is the anger, where are the activists? Why aren’t they doing something?”

*

Yesterday, I received a new article from journalist and political activist Esther Vivas, which is appended below. In it she details the growing despair of the people of Spain as they suffer even more severe “austerity” bringing with it the inevitable mass unemployment, frozen salaries and escalating costs of living. Broadly, what she says about Spain sadly applies to nearly every corner of the western world and beyond.

Spain in 2014: Not a Prosperous New Year
Esther Vivas

We have entered 2014 a little poorer. For those of us with a job, our salaries have been frozen, or even cut; only a few can expect a rise in the New Year. Furthermore, the price of electricity, public transport and water are increasing.

2013 ended with the controversy over a threatened increase in electricity bills by 11%, leaving Spaniards paying well above the European average and Spain ranking the third most expensive electricity in Europe. So, Mariano Rajoy’s Popular Party (PP) government intervened and stopped this rise by decree. As you can see, if the PP wants to, it can intervene. But overall, there is little willingness to confront the interests of multinationals. For now, the government has limited the rise to 2.3%, and we are expected to be thankful.

The rising price of public transport is another traditional New Year scam. Train tickets, are up nearly 2%, and in Barcelona, not to be outdone, the fare raises on the subway are an abusive 5% with the most popular travelcard, the T-10. However, if you usually take the high speed train (AVE) , which is only used by a minority of citizens, do not worry, because the price has been frozen . Lucky too, are the drivers who use the highways from Castelldefels to Sitges and Montgat to Mataro, where the tolls have been reduced by 30% and 10% respectively, provided they use teletac card, the automatic payment system. Lower the cost of private transport and increase the cost of public transport – that’s the approach of Catalonia’s [right-wing nationalist] CiU government.

And in Barcelona, we face further rises, for water too, even if money appears to be in plentiful supply, especially for the city council, as we saw with the celebrations on New Year’s Eve at the Montjuïc fountain. The tourists are happy at least. But for the rest of us, water bills will be going up by 8.5 % on average in the metropolitan area of Barcelona, thanks to the votes of CiU and [Catalan Socialists] PSC, and the abstention of the [left nationalists] ERC. In the end, those who criticise the cuts are the first to sharpen the scissors. We will not forget.

Meanwhile, the minimum wage remains frozen, as was the case last year, leaving it at a meagre 645 euros per month, while public sector workers remain on the wages they received in 2010. Pensions of those ten million retirees who worked all their lives, will see their incomes hit by a change in indexation that means rises are tied to below inflation (CPI ); this year they will rise by just 0.25% , the minimum set by the Government. An increase that will barely buy a cup of coffee.

We enter this 2014, a little poorer. Our purchasing power slowly falls. Every year that passes we have less. They want to make poverty normal. Do you remember those stories, not so long ago, of those struggling on 1000 euros a month? The new precariat. Today an employer offering a job paying a thousand euros monthly would be swamped by curriculums. And yet some, like the Prime Minister, dare to say that 2014 brings “the beginning of the recovery.” What a bunch of thieves and liars.

*Article published in the Spanish digital newspaper Público.es, 02/01/2014. Translated by Revolting-Europe.com.

+info: http://esthervivas.com/english/

I would like to thank Esther Vivas for allowing me to reproduce this article.

Not all of the views expressed are necessarily views shared by ‘wall of controversy’.

*

Update:

On January 6th, Chancellor, George Osborne, delivered a New Year economy speech at the West Midlands headquarters of Sertec in which he continued from where Cameron had left off, announcing that:

If 2014 is a year of hard truths for our country, then it starts with this one: Britain should never return to the levels of spending of the last government.

We’d either have to return borrowing to the dangerous levels that threatened our stability, or we’d have to raise taxes so much we’d put our country out of business. Government is going to have to be permanently smaller – and so too is the welfare system. […]

We’ve got to make more cuts. £17 billion this coming year. £20 billion next year. And over £25 billion further across the two years after. That’s more than £60 billion in total.

Click here to read a full transcript of George Osborne’s speech at gov.uk

From a report in the Guardian published the same day (co-authored by Nicholas Watt and Rowena Mason), we also learn that:

In an interview on Radio 4’s Today programme, Osborne said he would seek to achieve some of the £12bn savings by targeting housing benefit for under-25s and by means-testing people on incomes of £60,000 to £70,000 who live in social housing. But one Whitehall source said that targeting those two areas would produce “laughable” savings. Department of Communities and Local Government figures show that the 11,000 to 21,000 council tenants, who earn more than £60,000 a year, each cost the taxpayer £3,600 a year. Targeting this group would produce savings of £40m-£76m a year.

No doubt desperately intent to put some clear blue water between his own party and the truer blue Tories in the run up to the 2015 general election, the same article reports on Nick Clegg’s entirely belated fightback against what are in any case his own government’s “austerity measures”:

Clegg chose to describe Osborne’s plans to target cuts on the working-age poor – while ruling out tax increases – as “lopsided and unbalanced”. In a sign of how coalition relations will remain fractious until the election in May 2015, the deputy prime minister said: “You’ve got a Conservative party now who are driven, it seems to me, by two very clear ideological impulses. One is to remorselessly pare back the state – for ideological reasons just cut back the state.

“Secondly – and I think they are making a monumental mistake in doing so – they say the only people in society, the only section in society, which will bear the burden of further fiscal consolidation are the working-age poor.”

Signalling how he will waste no time in publicly criticising Tory plans over the next 16 months, Clegg later added: “I literally don’t know of a serious economist who believes that you only do it from that lopsided, unbalanced approach. Almost all serious economists say you have some kind of mix.”

Meanwhile, professional clown and London Mayor, Boris Johnson, managed to upstage both Osborne and Clegg on LBC radio by comparing Nick Clegg to a condom, describing him as “David Cameron’s lapdog-cum-prophylactic protection device”.

This is taken from The Mirror, published January 7th:

The London Mayor likened the Deputy Prime Minister to a “prophylactic protection device” as relations between the Tories and Lib Dems sank to a new low. The tirade came during a radio phone-in after Mr Clegg claimed George Osborne’s “extreme” plan to cut £12billion from welfare was a “monumental mistake”.

Furious Tory MPs called on the Lib Dem chief to apologise. Leading the backlash on LBC radio slot Ask Boris, jabbering Johnson said: “Clegg is there to perform a very important ceremonial function as David Cameron’s lapdog-cum-prophylactic protection device for all the difficult things that David Cameron has to do.

“He is a lapdog who’s been skinned and turned into a shield.”

You can listen to Boris Johnson’s latest rant against Coalition teammate Nick Clegg embedded below:

 

*

Additional:

On November 27th, Alexis Tsipras, leader of Syriza in Greece, wrote an op-ed for the Guardian entitled “Austerity is wreaking havoc, but the left can unite to build a better Europe”. Here are a few pertinent extracts:

Those European leaders who claim that the current medicine is a “success” are hypocrites. For millions of people, the European dream has turned into a nightmare. Eurobarometer surveys show the growing crisis of confidence in the EU and the catastrophic rise in the popularity of far-right parties. What should give us hope is the emergence of new solidarity groups and community-based movements. They can and will lead to greater democratic participation and control. […]

Europe needs an anti-austerity and anti-recession front, a solidarity movement for its working people, north and south. This could deliver a pact for democracy, development and social justice. We must rebuild solidarity among the young, the workers, the pensioners and the unemployed to break down the new dividing line between Europe’s rich and poor, the “mur d’argent” to use a historical phrase that has become topical.

Click here to read Alexis Tsipras’ full article.

*

1 From an article entitled “Cameron: Austerity should last for ever and Britain must get used to being a ‘leaner, more efficient state’” written by James Chapman, published in the Daily Mail on November 11, 2013. http://www.dailymail.co.uk/news/article-2501697/Cameron-Austerity-Britain-used-leaner-efficient-state.html

2 From an article entitled “David Cameron makes leaner state a permanent goal” written by Nicholas Watt, published in the Guardian on November 12, 2013. http://www.theguardian.com/politics/2013/nov/11/david-cameron-policy-shift-leaner-efficient-state

3 From an article entitled “David Cameron warns of ‘new age of austerity’” written by Deborah Summers, published by the Guardian on April 26, 2009. http://www.theguardian.com/politics/2009/apr/26/david-cameron-conservative-economic-policy1

4 A comparison can be easily made from studying a graph published by the BBC in late October. Figures from the ONS for UK GDP growth are as follows: 2009 Q4, 0.4%; 2010 Q1, 0.5%; 2010 Q2, 1.0% compared against 2013 Q1, 0.4%; 2013 Q2, 0.7%; 2013 Q3, 0.8%. Indeed, the accompanying article begins: “The figures mean that the economy grew at its fastest pace for three years.” After three years of Coalition government, in fact! http://www.bbc.co.uk/news/10613201

5 From an article entitled “Check Out What GDP Growth Would Look Like If The Government Were Using The Right Inflation Numbers” written by Henry Blodget, published by businessinsider on May 30, 2011. http://www.businessinsider.com/gdp-adjusted-for-inflation-2011-5

6 In October 2011, Denis Campbell and James Meikle investigated and reported in an article published by the Guardian entitled “£20bn NHS cuts are hitting patients, Guardian investigation reveals”.

They write: “This Guardian investigation details the latest evidence of increased cuts – the cuts that, according to the government, should not be happening – being implemented across a wide range of the NHS’s many care services. With £20bn due to be saved by 2015, and the NHS receiving only a 0.1% budget increase each year until then, experts predict that tough decisions – about the availability of services and treatments, staffing levels and which clinics and hospitals provide care – will become increasingly common.”

http://www.theguardian.com/society/2011/oct/17/nhs-cuts-impact-on-patients-revealed

1 Comment

Filed under austerity measures, Britain, Esther Vivas, Spain

One response to “how can there be any talk of recovery in this “age of austerity”?

  1. Jenny B

    Excellent article. The policy of this Government is to set one section of society against another. Divide and conquer and at the moment it is working against us all.

    Like

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