Jeremy Hunt duly trotted out carefully crafted alliterative nonsense last week. His four ‘Es’ – enterprise, education, employment and everywhere – produced what Macbeth would call a tale told by an idiot, “full of sound and fury. Signifying nothing”.
Both the Financial Times and Guardian addressed the IMF report which indicated that the UK had slipped from the top to the bottom of the G7 league table and its economy was expected to shrink further. Both papers found Hunt’s response disappointing, as did the business community. But, while the Guardian offered no advice, the FT did, including maintaining some kind of super super-deduction on capital spending to boost investment and more child support to encourage parents to find jobs. But this waffle about ideas for the longer-term, ducks addressing today’s priorities.
Get money into people’s pockets
The most pressing issue today is pay. It is clear that the public sector, in particular, has been exploited for years. Real earnings for most are lower now than ten years ago, while company directors’ salaries have spiralled.
The vocational ethos of teachers, care workers and medical staff can be taken advantage of. I know: my wife and I stood with our daughter, a nurse practitioner, on the picket lines outside Sheffield’s Royal Hallamshire Hospital. None of the strikers wanted to be there. They could not wait to get back to work. And each of the nurses were losing about net £90 that day. As a union member (UNITE), I felt really proud that the unions were helping these dedicated workers in all trades to get their voices heard.
A government in hiding
Why did all these workers out on strike need to take action? Because a tone deaf, intransigent and at times cowardly bunch of Conservative ministers would not engage with them. Hiding to avoid questions seems to have become a habitual trait of the cabinet. I had thought it was only Boris Johnson who resorted to hiding in fridges to avoid scrutiny, but it’s a long-standing conservative tradition that dates back to Jeremy Hunt avoiding junior doctors when he was health secretary.
The good news is that the country now sees where the real leaders are – in among the workers. Whereas union leaders are upfront, very well-briefed, well-prepared and persuasive, leadership is barely discernible among ministers like Grant Shapps, Steve Barclay, Suella Braverman, Gillian Keegan and Thérèse Coffey. I only wish the union leaders were in the cabinet, then we would not be having these strikes in the first place.
Union membership in the UK rose by 118,000 to 6.6 million in 2020, the fourth consecutive annual increase. The Trades Union Congress (TUC) report that online enquiries into trade union membership have surged by some 700%.
Economic illiteracy?
So, what is the priority? To get the money into people’s pockets as soon as possible because then they will spend it, mainly in their local communities. They will not give dividends to their shareholders to hoard in tax havens. Consider this: £570bn is held by Britain’s super-rich in offshore tax havens. The UK tax authority has admitted that it has no idea how much of this amounts to evasion. HMRC has failed to collect, at its most recent estimate, some £35bn in tax annually, but this is not solely due to evasion and avoidance.
When workers spend money, it is put to work in local communities. But if given to the bankers, it is used to create more debt on which to charge interest. This is what the UK’s banker PM seems to prefer. He has lifted the ceiling on bankers’ bonuses while denying those most in need of money, monetary breaks. What kind of logic is that? Where is the virtue? Where is the value to the country?
To quote Professor Michael Hudson:
“By subsidizing the financial sector and its debt overhead, this policy is deflationary instead of supporting the ‘real’ economy. The effect has been to empower the banking sector, whose product is credit and debt creation that has taken an unproductive and indeed extractive form.
“This can clearly be seen by dividing the private sector into two parts: The ‘real’ economy of production and consumption is wrapped in a financial web of debt and rent extraction – real estate rent, monopoly rent and financial debt creation. Recognizing this breakdown is essential to distinguish between positive government deficit spending that helps maintain employment and rising living standards, as compared to ‘captured’.”
Fair pay
Perhaps the government does not understand the economic need for fair pay. Or can’t join the dots. When the strikers ask for a rise, the response from government is:
“It’s unaffordable”. But isn’t it more a case of the government choosing what it wants to afford using public money (our tax) than a case of relative affordability? The PPE losses of about £15bn could have funded a 20% pay increase for all the nurses represented by the Royal College of Nursing for the next five years.
That money could have been spent in the UK, mainly locally, generating another 235,000 jobs, based on the multiplier effect used in the New Health and Social Care Economy report for the Northeast. The tax returns of 705,000 employees alone would more than justify the investment in fair pay. Contrast that with PPE payments, many of which it appears have left our economy and gone out of the country.
I will end with this warning. In Finland in November 2019, the prime minister and local government minister were accused of giving misinformation, specifically about the transfer of work-contracts of Finland’s state-owned postal service package handlers, which would result in lower pay. The strike led to a one-day sympathy strike by Finland’s transport sector. This transformed into a trade-union solidarity protest in the country and led to the resignation of Prime Minister Rinne and his cabinet, and a change of government. If only, here in the UK!
