STUC Congress 2011 Speeches - Economy and Industry

Speech moving Composite A There is a Better Way - Growing the Economy and Creating Jobs, delivered by Anne Douglas, Prospect and STUC General Council - 18 April, STUC Congress 2011

Congress, we meet almost exactly a year since the coalition government took office. The General Council was under no illusions about the nature of this government and we quickly moved to explain why deep and rapid cuts to public spending would be a disaster for the economy. Of course the Government didn’t listen – to us or anyone else for that matter.

Instead they proceeded with the emergency Budget of June last year followed by the Spending Review in October which confirmed a package of spending cuts without precedent in an advanced and solvent nation.

All through this process, Ministers acted as if growth and jobs would be unaffected – indeed they often had the audacity to argue that cuts would boost employment. They refused to learn the lessons of economic history, which tell us that cutting in a crisis will lower growth and increase unemployment. Ministers appear to believe, on the basis of nothing more than ideology, that reducing the size of the state will necessarily unleash a wave of private sector investment.

As we predicted, this smug, evidence-lite approach is proving hugely detrimental to the economy. The Office for Budget Responsibility – established by this Government – reported on the state of the economy at the time of the Budget last month. How had their forecasts changed since their last report in October?

·                     They now expect GDP growth to be lower;

·                     Inflation to be higher;

·                     Employment to be lower;

·                     Unemployment to increase on both claimant count and ILO measures;

·                     The balance of payments to worsen;

·                     Average earnings to decline; and,

·                     Household disposable income to decline.

And these last two points are particularly important. Even the Governor of the Bank of England has acknowledged that real wages are likely to be no higher in 2011 than they were in 2005. The last time real wages fell over a period of 6 years was the 1920s.

So –

·                     Real wages are falling;

·                     Household incomes declined in 2010 for the first time since 1981;

·                     Growth forecasts are being revised down;

·                     Unemployment is high and widely predicted to rise – and to remain high for at least the next couple of years;

·                     Long-term unemployment is stubbornly high;

·                     Long-term youth unemployment is still rising;

·                     All forward looking indicators of consumer confidence are collapsing; and,

·                     Understandably given collapsing demand, the private sector can’t see sufficient investment opportunities to plug the gap.

And Congress, all this before spending cuts begin in earnest. In these circumstances we simply have to ask where are jobs and output growth are going to come from?

The Government’s latest response is simply pathetic: A Plan for Growth based almost exclusively on business tax cuts and deregulation; a plan developed on the most spurious of evidence and one guaranteed to further embed the economic and social model which imploded so spectacularly in the banking crisis.

The Government has claimed that its spending cuts and unfair tax rises are ‘unavoidable’; with utter shamelessness, they have claimed that austerity is fair and progressive. They have claimed that we are ‘in this together’.

The General Council firmly believes that their programme is entirely avoidable, unfair and regressive – we have set out our case in detail; we have watched with little surprise but some dismay as Ministers have embarrassed themselves trying to respond to our arguments.

Congress the General Council will

·                     continue to develop positive alternatives – just today we have published a significant new piece of work on the future of manufacturing;

·                     we will continue to expose the dogma and ineptness of coalition economic policy.

This composite shows that:

·                     there is a better way on tackling the deficit – through fair and progressive taxation and forcing the super rich and corporations to face up to their taxation responsibilities;

·                     It shows there is a better way to sustainably grow the economy and create good jobs.

Congress, I ask you to support.