Workers' Weekly On-Line
Volume 51 Number 9, March 13, 2021 ARCHIVE HOME JBCENTRE SUBSCRIBE

Need for New Direction for Economy Further Confirmed by Government Budget and Economic Policy

Chancellor Rishi Sunak's Budget of March 3, as his Spending Review had done last year, was put forward as posing serious questions on the present and future of the economy. His outlook in answering them was that of what will favour the wealthy. As many commentators have pointed out, there was nothing in it for the working class. And what has caused more outrage than anything else is the pay rise of only 1% for NHS workers, which is by no means keeping in pace with inflation, and therefore consolidates a pay cut. However, the issues are not simply whether it is the rich or the workers who benefit, but of the whole question of the direction of the economy which the Budget and the overall economic policy of the government confirms. His plan to "protect the jobs and livelihoods of the British people", part one of his three-point plan, will not do so, neither will the third part, that of beginning "the work of building our future economy". Both of these are in contradiction with the second part of his plan, which is to "begin fixing the public finances".

This is once more the tired argument for austerity, that funding of social programmes must be curtailed, that the function of government is to balance the books. And all the while, the government has been throwing money at the rich. It is well-known what a scandal the contracts handed out to private concerns has been, totally contrary to the public good. Furthermore "fixing the public finances" does not recognise that precisely the opposite is required for a modern economy that serves the public interest. And neither does it recognise the full scale of the economic crisis, which has been exacerbated by the Covid pandemic.

If public well-being is not put at the centre of considerations of the economy, then what is the aim of an economy? The government should realise that for an economy to thrive, or at least to find a way to resolve its crisis, then it cannot be that more is taken out of the economy than is invested in the public sector. The government's measures are short-term, and geared to hand-outs to the billionaires and oligarchs. And this is done in the name of "Global Britain" and "Build Back Better".

For instance, the government believes that to take responsibility for the economy is abnormal. As long as the pandemic persists - and it shows callous disregard for the well-being of working people here as well - the government will extend the furlough scheme. But it is perfectly content to suffer mass unemployment when the scheme ends. It is enmeshed in crisis, because it does not want to recognise the social wealth which is produced by working people. It is perfectly willing to back social programmes when it facilitates private interests. In fact, their whole economic outlook is to act on behalf of those private interests.

What is required from a government which has the interests of a human-centred economy at heart is the defence of the producers of all value, the working class, to take hold of what belongs to them by right. This in turn requires a fundamental change in the direction of the economy. Before the pandemic, the economy did not provide stability and security for all. With the pandemic, Rishi Sunak is recklessly ignoring these challenges. Despite his claims of protecting the jobs and livelihoods of the British people, he is instead opting for what favours the interests of the financial oligarchy. The Chancellor is looking for an excuse to perpetuate austerity, the approach to the economy that funnels wealth which has been claimed for the public treasury to the rich and reduces the claims of working people and public services. The treatment of the NHS and its workers is a case in point. When all the rhetoric is stripped away, the disgraceful slap in the face for its staff as they work in intolerable conditions is the reality, along with turning more and more aspects of the health service to private concerns who suck up public funds like there is no tomorrow.

The concern to overcome the economic crisis exacerbated by the pandemic is a charade. The concerns of the financial oligarchs are what is being pursued. The long debates in the House of Commons are to no effect because the vantage point is not that of empowering working people to make decisions on what is produced, what is useful and necessary for the economy and that the working people should have control over their lives and conditions. It is as if human beings had no control over the fate of the economy. This cannot be allowed to continue. It means otherwise that corruption as a symptom of the state funds being under direction of private interests will flourish.

The elephant in the room also is the spending on war. Not only is this a component of "Global Britain", and puts a wholly different light on "Build Back Better", and therefore consistent with Britain's intervention globally to the detriment of peace, security and sovereignty. But it is immensely destructive to the economy, and to the natural and social environment. The ruling elite can always find the funds to spend on war, yet it does not figure in the Budget calculations as elaborated by the Chancellor.

Yet using the argument that government borrowing is comparable only to that during two World Wars and must be paid back, and must not be allowed to rise unchecked, the Chancellor plumps for "sustainable public finances" as though the government is a long-suffering victim of circumstances. Working people are to bear the brunt, while interest paid out to the financiers and big business is staggering. At the very least, a moratorium on debt repayment is called for, and government borrowing from private moneylenders restricted. A procedure could be instituted whereby the government borrows from itself, not the rich, and the debt repaid from the new value workers create in an expanding and stable economy. If the government used the money borrowed from itself to invest in public enterprise then the increased value and income from those enterprises would quickly repay the debt and more. The National Debt in that sense as an ideological construct is there to benefit the rich. There is much propaganda which obscures the source of the funds in the public treasury, which is the claim the government makes on the social wealth produced by working people, and instead government debt is used to try and justify reducing investments in social programmes.

There are other features of the Budget besides the real pay cut for the nurses which reveal the callous indifference to the conditions of the working people, especially the poor and vulnerable. There is the £20 cut to universal credit, for example. The freezing of the income tax allowance is another example. The crisis in investment in education is another feature, which makes a mockery of the government's boast of creating a "world-class education system". Education is being geared to the needs and interests of the big corporations, and strict budgets are the order of the day. The "kick-start" scheme itself is a fraud where the economy is in a state of devastation. The fraud of "balancing the books" is used to justify this indifference. It even prompted the head of the UN's Office for Humanitarian Affairs, Mark Lowcock, to declare that ministers have decided to "balance the books on the backs of the starving people of Yemen". This is the funding crisis that the government is creating, one in which there is no protection for living standards and guaranteed employment.

The government does not seem to realise, or wilfully ignores, that an unemployed workforce does not produce social wealth for the economy. It does not have to be this way. The balance between going to work and being safe from the pandemic is a false dichotomy. The people themselves can find a way out of this crisis, hold the government to account, and work out solutions. The enterprise of human beings themselves in the society is an important way to deliver funds to the government, as well as insisting the monopolies and oligopolies provide the funds for the public services and infrastructure which they utilise.

The working class and people must reject as a whole the present disastrous direction for the economy, as exemplified in Rishi Sunak's latest Budget, and champion a new direction. Competing in the global market and searching for the maximum private profit is the old direction, which includes destruction of the means of production, blocking extended reproduction of the productive forces, in favour of what gives the oligarchs the highest and quickest return. A new direction would be to plan for an economy which produces for people's needs, trades on the basis of mutual benefit, and puts international trade in the hands of public authorities not of the marauding international oligarchs. The working class with its independent programme has the project of becoming the decision-making power and building such an economy.


ShareThis

Link to Full Issue of Workers' Weekly

RCPB(ML) Home Page

Workers' Weekly Online Archive