A Brexit free zone. GIMMS reports on the real news: austerity hurts (and what we can do about it)

Published by Anonymous (not verified) on Sat, 31/08/2019 - 9:50pm in

Neon sign slogan For the WorldPhoto by John Tyson Tang on Unsplash

“…under the Covenant, all States parties should avoid at all times taking decisions which might lead to the denial or infringement of economic, social and cultural rights. Besides being contrary to their obligations under the Covenant, the denial or infringement of economic, social and cultural rights by States parties to the Covenant can lead to social insecurity and political instability and have significant negative impacts.”

Chair of the UN Committee on Economic, social and Cultural Rights.

In the news this week the Chancellor Sajid Javid pledges money for schools, the NHS and the police in a pre-spending review announcement. Thanking the British people for their hard work over the last decade he said ‘we can afford to spend more on the people’s priorities – without breaking the rules around what government should spend […]. But at the same time, it’s vital that we continue to live within our means as a country’. Reminding the public that the government mustn’t allow its public finances to ‘get out of control’ he also said that when it came to spending ‘taxpayers’ money’ he would make ‘no apology for challenging every decision and making sure every pound is wisely spent’.

The promise to open the purse strings a tad comes with the same tired old language and false narratives about how money works. A worn-out record endlessly repeated as if to brainwash the public with its truth.

But, if the government keeps repeating the false household budget narratives of tax and spend and fiscal rules then those of us who know differently must keep challenging it, must call it out for what it is. A falsehood which has left many in the country bereft of the dignity and economic security that well-paid works brings, exacerbated by a pared down public service sector which has stripped people of the support they need through good times and bad and in the service of creating a functioning more equable society.

What the Chancellor offers with one hand, he takes away with the other in his reference to living within our means and sticking to the spending and borrowing rules set out by his predecessors. The implication is that as the Tories have been so careful with the public finances they have collected enough pennies in the state piggy bank to give them some room to spend. At the same time, long-suffering citizens get a pat on the back for having sacrificed so much so that the government could get its finances back into order and now here’s the reward for pulling in their belts! Better public services. Except that the price for pulling in our belts has been catastrophic. For the last nine years, spending on public services and welfare has shrunk, hunger and homelessness have increased and our most precious planetary cargo our children, (as reported in last week’s MMT Lens) who will carry the consequences of austerity forward, have all borne the brunt of cuts on the back of the lie. Not a week goes by without proof of the damage that has been caused both to people’s lives and the economy.

Austerity hurts and it was a choice.

It is quite amazing what the prospect of an election can bring forth, as the Conservatives attempt to airbrush their image to hoodwink the public into believing that they have been good custodians of the public accounts and the economy whilst claiming yet again 9 years later (a boring record now) that they had no alternative as they were clearing up Labour’s financial mess. Labour has paid a high price for Liam Byrne’s message left in the Treasury that there was no money left

However, this money on every count from schools, to the NHS and policing, whilst welcome, is too little too late. It cannot make up overnight for the consequences of the last nine years of austerity, but then it probably is not meant to. As Aditya Chakrabortty noted in an article this week about funding for education it also has political aims attached. Not only won’t the £2.8bn reverse the cuts made over the last 10 years, most schools won’t benefit at all since the government has indicated that the cash will go to areas which have been underfunded in the past which just happen (not by chance of course – do you hear the election trumpets?) to be full of Conservative target seats for a coming election.

Chakrabortty also notes that ‘classrooms have been turned into the new frontline of the welfare state, with staff filling in for councils in financial collapse and parents in precarious jobs or terrible housing’. This emphasises the wide-ranging consequences of cuts to welfare spending on the most vulnerable people in our nation from those that are sick or with disabilities to those who are involuntarily unemployed or in insecure, low paid employment.

If MMT Lens readers caught the ITV video report on Thursday evening which captured the raw reality of life for people in Liverpool then it surely must bring a heavy heart to many and pose questions about the Conservative’s economic record.

In Liverpool, one in three children live below the poverty line – that is equivalent to more than 35,000 children. That is a shocking statistic. But statistics don’t tell the full story. Families on the breadline with no reserves to fall back on, living hand to mouth, relying on food banks and parents going hungry to feed their children. A life lived in fear of the knock at the door that might render them homeless.

Shirley Marshall, who runs a community store in Liverpool, commented in the video ‘We’re turning into a third world country, that might sound overdramatic, but I don’t think it is, people have got nothing at all, absolutely nothing’. Liverpool is just one of many towns and cities where similar conditions are occurring. We are failing our children and whilst the government extols the virtue of balanced budgets future generations will pay a heavy social and economic price.

While government continuously lauds from its propaganda towers its employment record reiterating at every opportunity its ‘work pays’ mantra it masks the upsurge in insecure work which is pushing people into the red. It masks the people who are working two or three jobs just to make ends meet as people become trapped in chronic poverty and have to rely on charity to exist. It masks the fact that women, who have been affected most by government cuts to public spending, have to work as many part-time jobs as they can fit in just to keep their children fed, clothed and sheltered. The same women who then struggle during the summer holidays to cover the cost of childcare which pushes them into the red and into debt.

This is a vicious circle which once entered becomes increasingly difficult to extricate oneself from. People are made to feel inadequate, as if they alone are in control of their fate and are not subject to the deliberate and harmful intentions of government policy. The mantra of ‘work pays’ is inextricably linked to a neoliberally inspired blame culture which suggests that people are either feckless and improvident or responsible and good with their money. We become winners or losers in a competitive, dog eat dog world and which one you are is down to your personal qualities and hardworking attitudes rather than the time or place in which you were born and brought up and the government policies which were or weren’t enacted.

In the week when Boris Johnson suggested that patient morale might be improved by hot buttered toast and a national tabloid claimed that health tourists have totted up £150m in unpaid bills which could have funded more nurses, doctors and operations, Javid also promised more money for the NHS.

After having deprived it of adequate funding for nearly a decade, closed hospitals, cut services and staffing levels (not to mention the ones who have left through the intolerable stress caused by the pay cap and endless firefighting) it is simply laughable to suggest that hot buttered toast and employing a celebrity chef to improve food will improve patient morale. After a long line of previous celebrity chefs who failed in their task to improve food quality, the latest appointment will have her work cut out. Last year, figures were released which showed that hospitals are spending as little as £3 a day on food for patients. This at a time when records show that the number of patients admitted to hospital with malnutrition has more than doubled since 2009/10.

The problem of malnutrition is becoming so serious that earlier this year MPs recommended that the government appoint a minister for hunger in the UK (yes you read that right) to confront the growing problem of food insecurity which according to figures affects one in five children.

According to the Commons Environmental Audit Committee, the UK has among the worst levels of food insecurity in Europe and up to 2 million people may be undernourished including those admitted to hospital, care homes and mental health units.

Human Rights Watch, in a report published earlier this year Nothing left in the cupboards’ , examines how the changes to the welfare architecture and austerity motivated reductions in government expenditure on welfare are responsible for the huge increases in the distribution of food parcels through the food bank network to meet the needs of those families in food poverty.

Interestingly, it also examines whether austerity motivated cuts to welfare were a political choice or a necessary bitter pill. It was, of course, presented to the public as necessary to restore the public accounts to health as the new Conservative government rejected Labour’s fiscal stimulus and set the country on its austerity path. As Cameron is quoted as saying at the time ‘The age of irresponsibility is giving way to the age of austerity…The age of austerity demands responsible politics. Over the next few years, we will have to take some incredibly tough decisions on taxation, spending, borrowing – things that really affect people’s lives. Indeed, the authors of the report claimed that ‘reducing the public deficit could be a legitimate aim for state policy and may be genuinely unavoidable’ thus confirming yet again the extent of the misunderstanding about how our money system works. That said it also said that

In carrying out such cuts to spending a state cannot, however, disregard its duty to protect people’s human rights. Even where unavoidable, decisions taken in the context of fiscal contraction should not have a disproportionately negative impact on rights. States are required to assess their plans against their obligations under international human rights law.”

As we are now witnessing, Cameron’s ‘age of austerity’ and ‘responsible politics’ have turned sour. Austerity has touched every aspect of ordinary people’s lives and affected the good functioning of our society as the public and social infrastructure is taken apart and the welfare system stripped to the bone.

It is a vicious circle where low incomes, insecure employment and poor housing, combined with changes to welfare benefits impact on health – which in turn creates more pressures on a health service which is itself crumbling under the strain of austerity and cuts to its budgets. And now, after 9 years of pain, the Conservatives have the audacity to claim that as a result of their careful stewardship of the public finances they have money to spare. Which is a little surprising since in the real world of the state finances governments can’t have money to spare as they can’t save it in the first place.

The front-page headline about health tourism and unpaid bills covered in two tabloids plays to a primed audience and is a distraction from the realities of government austerity policies and their ideological purpose. Firstly, to note that when considering that the total annual spend for the Department of Health is approximately £124.7 BILLION, £150 million is a drop in the ocean!

In this age of austerity which has wrought division and aroused suspicion of foreigners (not to mention immigrants), focusing on health tourism in such a hateful way is a deliberate distraction designed to drive a wedge between people with the suggestion that their tax money is being diverted to pay for treatment of foreign visitors. Aneurin Bevan, the founder of the NHS was clear in his essay ‘In place of Fear’:

“The fact, is of course, that visitors to Britain subscribe to the national revenues as soon as they start consuming certain commodities, drink and tobacco for example, and entertainment. They make no direct contribution to the cost of the Health Service any more than does a British Citizen’

As our NHS is being carved up and reorganised to create a US-style Medicare health service shaped as Integrated Care, how convenient it is to focus on hot buttered toast and health tourists to stir up animosity. While the real prize is being sliced and diced into private hands the public has been blinded by emotive arguments with sleight of hand in mind.

The idea of ‘taxpayers’ money’ is a divisive one and intended to be. It separates us into categories of hard-working people or shirkers, citizens or foreign visitors and immigrants. Instead of seeing human beings, we see money and entitlement.

With better knowledge of how government spends, we can challenge that story. Indeed, unless we do challenge these false narratives about how government spends then the future could be a bleak one for us all, but most especially our children’s children.

We can point to the fact that the government as the currency issuer, is never short of money and neither needs tax revenue or to borrow before it can spend.

We can point to the fact that from a macroeconomic point of view austerity was always the wrong path given that spending whether by government or the private sector equals income to someone. It is that which keeps the economic wheels turning.

We can point to the fact that the government made a deliberate choice to restrict funding to pursue an ideological agenda under the guise of creating financially sustainable public finances and public sector services, but which had nothing to do with monetary realities.

We can point to the fact that contrary to the ‘There is no alternative’ mantra which has been thrust into the public consciousness on a daily basis, that there is one. It starts with asking fundamental questions of those who suggest that our future is dependent on financial considerations. It starts with challenging the notion that we can’t afford the vital programmes needed to deal with climate change and rising inequality.

We can show that a government has choices which are not related to balancing books. We can demonstrate that it’s not money that constrains government spending but resources. We can illustrate how government can put them to work to deliver public purpose; human and planetary survival in the first instance and in the second to address the huge inequalities that have arisen as a result of government policies designed to fill the pockets of the rich at the expense of the majority.

As one of the US Presidential candidates pointedly noted: ‘If the environment were a bank it would have been saved already’. The same could be said of poverty and inequality.

Let’s get informed and let’s get cracking.

If you have questions and want further information on these important issues you couldn’t do better than exploring our website. It has all the information you need from the basic to more in depth knowledge.

Give us a whirl and you won’t regret it.


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The post A Brexit free zone. GIMMS reports on the real news: austerity hurts (and what we can do about it) appeared first on The Gower Initiative for Modern Money Studies.