Photos: “Britain Needs A Pay Rise,” The TUC-Led Protest in London, October 18, 2014 (2/2)


See my second set of photos of “Britain Needs A Pay Rise” on Flickr.

On Saturday October 18, 2014, after I took part in “Britain Needs A Pay Rise,” a march and rally in London organised by the TUC (Trades Union Congress), I posted a photo set on Flickr, and an accompanying article. I have now posted a second set of photos, and, to accompany that set, this article follows up on some of the themes of the march and rally, which, I was glad to note, was attended by around 90,000 people.

The event was called by the TUC to highlight the growing inequality in the UK, and to call for an increase in pay for those who are not in the top 10% of earners, who, it was recently revealed, now control 54.1% of the country’s wealth.

In the Observer on Sunday, Cambridge University economist Ha-Joon Chang addressed some of the issues addressed by the TUC event — and, more generally, by those of us who are dismayed by the failure of the Labour Party to challenge the myths peddled by the Tories and their Lib Dem facilitators regarding the need for savage austerity programmes, which, it seems, will be as endless as the “war on terror.”

Chang begins his article, “Why did Britain’s political class buy into the Tories’ economic fairytale?” by pointing out that a large proportion of the British voting public has bought into the Tories’ narrative about the economy — that only an ongoing programme of savage cuts has put the economy on the road to recovery after the previous Labour government’s irresponsibility. As a recent IBM poll showed, people “trust the Conservatives more than Labour by a big margin when it comes to economic management,” as Chang put it — and the situation has become so ridiculous that the Labour Party “has come to subscribe to this narrative and tried to match, if not outdo, the Conservatives in pledging continued austerity.”

And yet, the root of the problem is, of course, not the need for cuts in government spending, but the repercussions of the 2008 financial crisis, brought about not by welfare claimants and immigrants, as the current narrative insists, but by criminally irresponsible investment banks, aided, it should be noted, by politicians (of all the major parties), who had been doing all they could to deregulate financial dealings since the 1980s.

As Chang points out in his article, the Labour Party has lost control of the narrative, even though all of Britain’s financial woes can be traced not to their spending policies, but to the recession that followed the 2008 crash. As he explains:

First, the recession reduced government revenue by the equivalent of 2.4% of GDP — from 42.1% to 39.7% — between 2008 and 2009-10. Second, it raised social spending (social benefit plus health spending). Economic downturn automatically increases spending on many social benefits, such as unemployment benefit and income support, but it also increases spending on things like disability benefit and healthcare, as increased unemployment and poverty lead to more physical and mental health problems. In 2009-10, at the height of the recession, UK public social spending rose by the equivalent of 3.2% of GDP compared with its 2008 level (from 21.8% to 24%).

When you add together the recession-triggered fall in tax revenue and rise in social spending, they amount to 5.6% of GDP – almost the same as the rise in the deficit between 2008 and 2009-10 (5.7% of GDP). Even though some of the rise in social spending was due to factors other than the recession, such as an ageing population, it would be safe to say that much of the rise in deficit can be explained by the recession itself, rather than Labour’s economic mismanagement.

Chang proceeds to explain that the Tories — and their supporters — would counter this by claiming “we had to control the deficit because we can’t live beyond our means and accumulate debt.” However, he describes this as “a pre-modern, quasi-religious view of debt,” adding:

Whether debt is a bad thing or not depends on what the money is used for. After all, the coalition has made students run up huge debts for their university education on the grounds that their heightened earning power will make them better off even after they pay back their loans.

The same reasoning should be applied to government debt. For example, when private sector demand collapses, as in the 2008 crisis, the government “living beyond its means” in the short run may actually reduce public debt faster in the long run, by speeding up economic recovery and thereby more quickly raising tax revenues and lowering social spending. If the increased government debt is accounted for by spending on projects that raise productivity — infrastructure, R&D, training and early learning programmes for disadvantaged children — the reduction in public debt in the long run will be even larger.

Chang then addresses the Tories’ next retort — that the current, much-trumpeted recovery “is the best proof that the government’s economic strategy has worked.” But as he asks, “has the UK economy really fully recovered? We keep hearing that national income is higher than at the pre-crisis peak of the first quarter of 2008. However, in the meantime the population has grown by 3.5 million (from 60.5 million to 64 million), and in per capita terms UK income is still 3.4% less than it was six years ago. And this is even before we talk about the highly uneven nature of the recovery, in which real wages have fallen by 10% while people at the top have increased their shares of wealth.”

Even the argument that we are enjoying a “jobs-rich” recovery, creating 1.8m positions between 2011 and 2014, is punctured. As Chang notes, “The trouble is that, apart from the fact that the current unemployment rate of 6% is nothing to be proud of, many of the newly created jobs are of very poor quality.” He adds, “The ranks of workers in ‘time-related underemployment’, doing fewer hours than they wish due to a lack of availability of work — have swollen dramatically. Between 1999 and 2006, only about 1.9% of workers were in such a position; by 2012-13 the figure was 8%.”

He also highlights an increase in self-employment, “whose historical norm (1984-2007) was 12.6%,” but which “now stands at an unprecedented 15%,” and as he explains, “With no evidence of a sudden burst of entrepreneurial energy among Britons, we may conclude that many are in self-employment out of necessity or even desperation.”

Totting up all these figures, Chang concludes that, “in between the additional people in underemployment (6.1% of employment) and the precarious newly self-employed (2.4%), 8.5% of British people in work (or 2.6 million people) are in jobs that do not fully utilise their abilities — call that semi-unemployment, if you will.”

As he also explains, the success of the Tories’ narrative has allowed the coalition government to pursue what he describes accurately as “a destructive and unfair economic strategy, which has generated only a bogus recovery largely based on government-fuelled asset bubbles in real estate and finance, with stagnant productivity, falling wages, millions of people in precarious jobs, and savage welfare cuts.”

We are, he notes, “in desperate need of a counter narrative that shifts the terms of debate” — one in which  the government budget “should be understood not just in terms of bookkeeping but also of demand management, national cohesion and productivity growth,” and in which jobs and wages “should not be seen simply as a matter of people being ‘worth’ (or not) what they get, but of better utilising human potential and of providing decent and dignified livelihoods.”

However, that counter narrative is, sadly, one that is not readily apparent in the mainstream — and without it, as Chang notes, Britain can only continue on a path of “stagnation, financial instability and social conflict.” If the Labour Party refuses to wake up, we will need to pursue new approaches — via the Green Party, for example, or through organisations like UK Uncut and the People’s Assembly Against Austerity, which have articulated coherent narratives that also puncture the Tory-led coalition government’s lies.

A link to the photos is also below:

No Cuts

Andy Worthington is a freelance investigative journalist, activist, author, photographer and film-maker. He is the co-founder of the “Close Guantánamo” campaign, and the author of The Guantánamo Files: The Stories of the 774 Detainees in America’s Illegal Prison (published by Pluto Press, distributed by Macmillan in the US, and available from Amazon — click on the following for the US and the UK) and of two other books: Stonehenge: Celebration and Subversion and The Battle of the Beanfield. He is also the co-director (with Polly Nash) of the documentary film, “Outside the Law: Stories from Guantánamo” (available on DVD here — or here for the US).

To receive new articles in your inbox, please subscribe to Andy’s RSS feed — and he can also be found on Facebook (and here), Twitter, Flickr and YouTube. Also see the six-part definitive Guantánamo prisoner list, and “The Complete Guantánamo Files,” an ongoing, 70-part, million-word series drawing on files released by WikiLeaks in April 2011. Also see the definitive Guantánamo habeas list, the full military commissions list, and the chronological list of all Andy’s articles.

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2 Responses

  1. Andy Worthington says...

    On Facebook, Paul Staples wrote:

    Should Conservative MP’s be given a 61% pay increase?

  2. Andy Worthington says...

    Thanks, Paul. Yes, it must be so difficult for the poor dears to get by on £67,060 a year (not including their often lavish expenses!)

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Andy Worthington

Investigative journalist, author, campaigner, commentator and public speaker. Recognized as an authority on Guantánamo and the “war on terror.” Co-founder, Close Guantánamo and We Stand With Shaker. Also, photo-journalist (The State of London), and singer and songwriter (The Four Fathers).
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