Miliband's offer of austerity in a red rosette is failing voters

If austerity is wrong and counter-productive when the Tories do it, it will be wrong and counter-productive whoever does it.

On Saturday, days before the wildly out-of-touch George Osborne stands up in parliament to deliver another message of gloom and despair, thousands gathered in London for the People’s Assembly. We came together knowing we are facing a huge crisis in the UK today – both an economic and a human crisis – and there was passion and anger. There is a lot to be angry about.

We are angry that this government is inflicting the longest and deepest economic slump since the 1870s; angry that more than £50bn has been cut from workers' wages every year since the start of the recession in 2008; that almost £30bn is being slashed from social security for the poorest and most vulnerable; and that half a million of our friends and neighbours are having to rely on food banks to get by.

We are angry that as executive pay continues to soar and millionaires enjoy even more disposable income thanks to a tax cut from their friendly millionaire Chancellor, many others face the threat of losing their homes as a result of the bedroom tax. And we are angry because we recognise that, in doing all this, the Tories and Lib Dems are attempting to privatise even more of our public services and roll back decades of gains we have made in terms of our welfare state, and in education and health.

Anger is inevitable and entirely justified under these circumstances. But as Owen Jones noted in his opening address, anger is meaningless if we do not believe we can do anything about it. So the People's Assembly is a necessary attempt to provide hope and inspiration, with some real alternatives to these vicious policies.

Because there is also a political crisis. The sickening demonisation of people who are having to rely on benefits continues, with one odious commentator suggesting at the weekend that the government should publish the names and addresses of all benefits claimants in a bid to deter them from claiming what they are legally entitled to claim.

The political space being created on the right by these so called "think" tank ideologues, and a right-wing press all too eager to print their bile, is being exploited by the Tories to drive through policies many of them could only ever have dreamed of in the past. That there has been far too little pressure from the left to counter this onslaught is the tragedy of our age. The joint pensions strike on 30 November 2011 – more than 18 months ago – was the high water mark that we have so far failed to regain. And Labour, well. The party appears to be in a state of complete confusion.

As we gathered on Saturday, people were talking – in less than polite terms – about Ed Miliband's statement that morning that a future Labour government would stick to Tory spending limits. By Sunday, Ed Balls was calling for Osborne to inject more money into the economy. Labour spokespeople still wearily trot out the "too far, too fast" mantra. But the party's core message is that there is simply less money around and we all need to get used to it.

This is not only economically stupid, it is politically inept. If austerity is wrong and counter-productive when the Tories do it, it will be wrong and counter-productive whoever does it. Austerity in a red rosette is no less brutal and damaging than in a blue one. In failing to articulate a clear economic alternative, or to challenge the pernicious myths about our social security system, Labour is not only failing to offer hope and inspiration, it is failing to offer voters a choice.

This is why harnessing the unity and sense of purpose at the People's Assembly is so important. The assembly brought together dissatisfied Labour party members with trades unionists and campaigners from a broad spectrum of political and community groups, as well as members of the public fed up with being told there is nothing that can be done. How we organise ourselves now is crucial.

Since March, not a week has gone by without some members of my union being on strike in a determined attempt to defend their pay and conditions. Working people have no more powerful weapon than the withdrawal of their labour. And the more of us there are taking co-ordinated strike action together the stronger we become and the more pressure we can exert. But union members also need to make alliances with others who are bearing the brunt of austerity.

On Saturday, we agreed to build for a day of resistance on 5 November, of civil disobedience where all of us – students, workers, the unemployed, disabled people, families, pensioners – unite to cause as much disruption as possible through marches, protests and direct action. And then we need to set the date for the next, and the next after that.

We met out of necessity to provide hope where, at the moment, there is only anger. We cannot afford to let this opportunity slip, we need to build a movement that will hound this government from office and send the clearest message there is to Miliband and Balls that they are mistaken if they think they can just waltz into Downing Street and pick up where the Tories left off.

Mark Serwotka is general secretary of the PCS

Ed Miliband has pledged to stick to George Osborne's spending limits for 2015-16. Photograph: Getty Images.
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Leader: The unresolved Eurozone crisis

The continent that once aspired to be a rival superpower to the US is now a byword for decline, and ethnic nationalism and right-wing populism are thriving.

The eurozone crisis was never resolved. It was merely conveniently forgotten. The vote for Brexit, the terrible war in Syria and Donald Trump’s election as US president all distracted from the single currency’s woes. Yet its contradictions endure, a permanent threat to continental European stability and the future cohesion of the European Union.

The resignation of the Italian prime minister Matteo Renzi, following defeat in a constitutional referendum on 4 December, was the moment at which some believed that Europe would be overwhelmed. Among the champions of the No campaign were the anti-euro Five Star Movement (which has led in some recent opinion polls) and the separatist Lega Nord. Opponents of the EU, such as Nigel Farage, hailed the result as a rejection of the single currency.

An Italian exit, if not unthinkable, is far from inevitable, however. The No campaign comprised not only Eurosceptics but pro-Europeans such as the former prime minister Mario Monti and members of Mr Renzi’s liberal-centrist Democratic Party. Few voters treated the referendum as a judgement on the monetary union.

To achieve withdrawal from the euro, the populist Five Star Movement would need first to form a government (no easy task under Italy’s complex multiparty system), then amend the constitution to allow a public vote on Italy’s membership of the currency. Opinion polls continue to show a majority opposed to the return of the lira.

But Europe faces far more immediate dangers. Italy’s fragile banking system has been imperilled by the referendum result and the accompanying fall in investor confidence. In the absence of state aid, the Banca Monte dei Paschi di Siena, the world’s oldest bank, could soon face ruin. Italy’s national debt stands at 132 per cent of GDP, severely limiting its firepower, and its financial sector has amassed $360bn of bad loans. The risk is of a new financial crisis that spreads across the eurozone.

EU leaders’ record to date does not encourage optimism. Seven years after the Greek crisis began, the German government is continuing to advocate the failed path of austerity. On 4 December, Germany’s finance minister, Wolfgang Schäuble, declared that Greece must choose between unpopular “structural reforms” (a euphemism for austerity) or withdrawal from the euro. He insisted that debt relief “would not help” the immiserated country.

Yet the argument that austerity is unsustainable is now heard far beyond the Syriza government. The International Monetary Fund is among those that have demanded “unconditional” debt relief. Under the current bailout terms, Greece’s interest payments on its debt (roughly €330bn) will continually rise, consuming 60 per cent of its budget by 2060. The IMF has rightly proposed an extended repayment period and a fixed interest rate of 1.5 per cent. Faced with German intransigence, it is refusing to provide further funding.

Ever since the European Central Bank president, Mario Draghi, declared in 2012 that he was prepared to do “whatever it takes” to preserve the single currency, EU member states have relied on monetary policy to contain the crisis. This complacent approach could unravel. From the euro’s inception, economists have warned of the dangers of a monetary union that is unmatched by fiscal and political union. The UK, partly for these reasons, wisely rejected membership, but other states have been condemned to stagnation. As Felix Martin writes on page 15, “Italy today is worse off than it was not just in 2007, but in 1997. National output per head has stagnated for 20 years – an astonishing . . . statistic.”

Germany’s refusal to support demand (having benefited from a fixed exchange rate) undermined the principles of European solidarity and shared prosperity. German unemployment has fallen to 4.1 per cent, the lowest level since 1981, but joblessness is at 23.4 per cent in Greece, 19 per cent in Spain and 11.6 per cent in Italy. The youngest have suffered most. Youth unemployment is 46.5 per cent in Greece, 42.6 per cent in Spain and 36.4 per cent in Italy. No social model should tolerate such waste.

“If the euro fails, then Europe fails,” the German chancellor, Angela Merkel, has often asserted. Yet it does not follow that Europe will succeed if the euro survives. The continent that once aspired to be a rival superpower to the US is now a byword for decline, and ethnic nationalism and right-wing populism are thriving. In these circumstances, the surprise has been not voters’ intemperance, but their patience.

This article first appeared in the 08 December 2016 issue of the New Statesman, Brexit to Trump