Alice Martin of New Economics Foundation, speaking at The Mechanics in Nottingham.
A very punchy 25 minutes.
Rough notes follow. I’m not a great scribe so take these notes as hints of what was said rather than absolute statements.
We’re in a period of low growth. A century old premise of ongoing growth perceived as a given and desirable, with only ecologists pointing out that the planet would have limits of what could be supported. “Trickle down” of wealth has not happened.
Three theories on what’s going wrong on growth. 1. We don’t have the right tools. Low interest rates and low wages leading to [secular] stagnation. 2. New technologies are no longer producing big steps in higher productivity. 3. Inequality: lower income groups spend more of their money, creating demand and re-using money, compared to the ultra rich who have run out of things to buy and are hoarding. Aspects of inequality – too many people unemployed or in poor quality employment; trying to prop up spending through confidence – hence measures to prop up house prices.
So can ‘we’ own the low growth period? Two ideas: 1. redistribution of time to tackle overworking (and help gender balance too); can we use new tech more; do more green and purple (health and caring) jobs; 2. land & wealth: a) 30%-50% of land in England and Wales is not registered so use it better; b) 50%-70% of price increases are cos of increases in price of land, which gov’t leglisation forcing councils to sell of land is going to make worse.
Worth noting two micro-economic trends: private renting set to overtake owner-occupiers; self-employment is set to outnumber public sector workers (cos of nature of some new markets (e.g. new internet businesses) and cos of ‘deregulation’ of construction sector).
There will be another crash; there just will. Not as such predicting an immiment one. But UK not in a good place cos of high levels of personal debt.
(Again, a reminder that these points were taken from my rough notes. …
So this is me.)
Many of the above arguments have been rehearsed in full council meetings.
The Government policy is about shifting power and wealth rather than focus on genuine economic growth.
The south-east has grown faster than the rest of us, yet the lastest support for councils has been directed that way and the ‘city’ has decided that the best way for the country to grow is by further investment in the ‘city’.
The talk was to get new ideas for the economy, but it’s like we need a renewed way of getting the basics of what we want from an economy conveyed. (Economics – the allocation of resources.)
You might say what about Beveridge’s ambition for the country about being against the five great evils; but perhaps being more ‘aspirational’ – work for all, health for all, success for all (education), homes for all, neighbourhoods for all (clean, safe and environmental) – yeah, gonna need a better wordsmith. But a common vision that gives people an easy apprectiation that they matter and they count and know why.
For how many years have we had people praise Osborne’s “deftness” on budget day, only for the deftness to fall apart as the understanding of his proposals is obtained? Remember the ‘pasty tax’?
Saw it again this year:
– a living minimum wage of £9 an hour by 2020 – trumping Labour’s manifesto commitment of £8!!
– Reduce the need for social security by making firms pay a proper wage! Why – he’s stolen Labour’s clothes!!
– A tax on firms so that those who offer apprenticeships get the money back!
– A golden rule of stopping people being dis-incentivised from taking work.
And it turns out the pessimistic spending figures he’d presented in March were not figures he believed in, in July! My – what a clever rascal!
Now, it is nice to hear the arguments Labour has been making over the years being embraced.
But whilst listening, there were other bits that sounded very wrong. Car licence fees paying for new roads – what as opposed to roads maintenance? Attacks on green investment schemes.
And in the immediate fall-out, one curious projection arose – that productivity will fall next year, and the year after and the year after.
Still £9 an hour – and Iain Duncan Smith going bonkers – had to be the lead.
So congratulations to those who started posting news of the broken promises by the evening, the misleading statements before the General Election, the unfairness and the cruelty.
The day after, and it became clear that a central plank was undermined – the changes for a significant group of people will work against going into work.
Other “day after revelations” –
– it dramatically favours the rich against the working poor;
(the publication that explains such impacts that usually comes out with the budget was not supplied this year – so deft);
– the living wage calculation is changed if you cut tax credits;
– significant harm to the disabled, and to the young;
– tax raising, not tax cutting;
– not that concerned about balancing the budget as early as possible.
Despite plenty of restrictions on not raising income tax, NI and VAT, Osborne showed plenty of scope for change.
The risks for Labour – constraining our actions when Osborne doesn’t; portraying Osborne as pro-austerity when he’s been prepared to keep borrowing (and leftists keep going on about austerity).
What Osborne is about is restructuring society for the very rich.
Our riposte should be that that is –
– poor for the economy – money leaves the economy too quickly;
– poor for society – we can’t meet the burdens longer living is bringing and continued impact on wider range of services councils can offer, and
– poor for the environment – over £3bn released on corporation tax matched by the burden placed on the green sector.
And there’s still more revelations to come.
For instance, how if some local government workers are on £7 an hour, and some NHS workers are on £7.72 an hour, does 4 years of 1% annual increases reach £9 an hour.
It don’t. 10 pay points in local government miss and 5 in the NHS.
We await a gov’t reaction.
If you’re going to ape Neil Kinnock,
I warn you not to read out your speech;
I warn you not to talk posh;
I warn you not to be cheap;
And I warn you to be prepared for the obvious question about Britain remaining in the EU.
Neil Kinnock’s speech on the eve of the 1983 election – the “I warn you” speech, is almost iconic.
Made more so by weeks of public campaigning that gave his voice a gravelly quality.
Capturing the imagination; making you think.
Vindicated by time.
Quite why David Cameron thought some of that would rub off, when read and delivered with a plum voice, is beyond me.
He was going to get air time anyway.
The rhythm was ruined too, because he felt he had to explain each conjecture.
And totally exposed by a question from the BBC editor who paraphrased Neil Kinnock in a different way, highlighting business concerns on threats to EU membership.
Cameron spluttered he wouldn’t have put it that way.
But business laughed.
“Yet experience suggests that the Creative Quarter concept lacks the robustness to prevent it joining the list of transient policy fashions witnessed over the years. I find little in Creative Quarter policy discussions to reflect the sense of an ecology, a community of businesses whose ultimate success depends on its ability to find collective solutions to common problems and collaborative opportunities to enter new markets.”
Select graphic of N Post article to read the full text.
David Cameron was full of cant when he spoke on his economic policy before the General Election. From 2009 –
“We are not going to behave like flint faced turbo-charged accountants, slashing spending without regard to the social consequences. We are going to behave like progressive Conservatives, pursuing our aims of a fairer society, an opportunity society, a safer society and a greener society in all that we do.”
The biggest slashing – social security. Less fair – tax cuts for the rich. Young people starting out with nothing like the opportunities of their parents. Crime nationally starting to rise. Commitments to green measures dropped and this week at further risk.
And it’s all been for nothing.
Three years on and the growth rates are circa what we had then. 0.8% growth is nothing to shout about when we’ve always understood 3% to be standstill.
Our message of 2010, and something I emphasised in every newspaper and leaflet I published – secure the economic recovery.
Cuts to public expenditure and reducing confidence to spend blew it.
Instead we have an economy geared even more to London, to the financial sectors and to the notion that secure jobs & careers for all poses problems business cannot handle.
We can do better.