Thursday, 31 March 2011

No alternative to the cuts- a response to Sentinel editorial

I along with a large contingent of people from North Staffordshire was on the March against the cuts last weekend. I am proud that I attended. I also feel that the arguments advanced in the Sentinel editorial – No alternative to the cuts- need to be counted.
I have to admit that when I hear the view that a majority of the political establishment are of one opinion that we have to go through this economic pain then both my thumbs begin to itch. Is this the same establishment that got us in this mess in the first place? Is this the same  establishment that gave us Iraq?
Firstly the level of deficit that we reached in 2009-10 is not a historical high. We were at a level of around 60% debt in relationship to GNP compared to the 240% figure we reached in 1947 when the post-war Labour Government embarked upon the social reforms culminating in the foundation of the NHS. It is not even a national high has many other countries such as France, Spain, the US and Japan have a higher rate of indebtedness in relation to GDP. The arguments that we need to make cuts and balance the books were exactly the same arguments advanced in the 30s when North Staffordshire suffered grievous levels of unemployment an experience it looks like we will repeat.
The principle that needs to be followed outlined by the economist Keynes in the 30s is right now as it was then 'look after Employment, and the Budget will look after itself". How can we reduce the deficit against the current backdrop of rising unemployment, falling tax revenues, growing inflation, dropping consumer confidence and negative growth? It looks like a perfect storm to me.
The level of cuts and job losses that the area will shortly endure will be very damaging to the local economy and most importantly to people who will be loosing their jobs. It is likely that for some especially those in their middle years that they will never again achieve the standard of living they previously enjoyed. A cursory glance at the Wednesday edition of the Sentinel offers proof that many jobs currently on offer are either part time, temporary or commission only. Those who have been earning a salary around the national average of 24K are shortly to find themselves facing a great shock.
I will say that I do not parrot the mantra of no cuts. I am pleased that the coalition has stopped the nonsense over ID cards. I am happy that the database state is being curtailed and the amount of money spent on consultancy and obsessive monitoring carried out by the last Government reduced.
But the level of cuts to basic services and the damage it will do to individual lives, usually the poor and the most vulnerable must be a cause for concern. And it must be unacceptable that many of the top FTSE companies consistently avoid paying tax. Tax avoidance has been estimated to cost the UK economy £95 billion whilst the pay of senior executives of top companies has risen by 55% in recent years. It cannot be morally justifiable that those who are responsible for the global crash should be able to walk away scot free with salaries and pensions enhanced.
I agree that the economy needs to be rebalanced. North Staffordshire needs jobs and we need to rediscover the skills that we had in making things. It was shameful that the local economy was loosing 3, 000 jobs a year in the manufacturing sector during the New Labour years, and linking this with the investigative reporting on the failure of regeneration in the area, woeful that previous efforts have been so disastrous.
We need to rebuild our economy on the principles of environmental sustainability- and given its engineering tradition North Staffs is well placed for this- durability, inventiveness and developing the potential that this area has. Miring people in welfare dependency, a low wage economy and impoverishment that naturally follows a rapid rise in unemployment is both repugnant and bad economics. Our obligations as good workers in the North Staffs economy must be matched by Government and business working for a common good to secure decent jobs, secure homes, proper pensions and fair finance objectives that underpinned the march in London last Saturday
Bill Cawley