Home > General Politics, Labour Party News, Laughable Lib Dems, Local Democracy, Terrible Tories > Don’t be deterred by Osborne’s trap – strike today!

Don’t be deterred by Osborne’s trap – strike today!

Today will see schools, prisons and courts employees, represented by trade unions, take strike action against the government on the grounds that public sector workers will work longer while contributing more towards their pension pots.

Union leaders have responded ahead of today explaining their positions. Christine Blower of the National Union of Teachers (NUT) has called the action “regrettable” but “due to the position that the government has taken, unavoidable”. TUC General Secretary Brendan Barber pointed out that pay has been frozen for two years despite high inflation, and that the feeling is public sector workers are being punished for a poor economic outlook they had no part in creating.

Strike

It is beyond despair that Ed Miliband has dismissed the strike out of hand, given that he is the leader of the Labour party. More depressing is he’ll gain nothing for it; David Cameron will continue accusing him of being in the pockets of the unions, while the laughing tabloid press continue running headlines to suit.

Ed Balls, the shadow chancellor, has hardly pledged undivided support for mass action, but what he has said is of interest. Commenting on Osborne’s strategy, he called on public sector workers not to fall into the chancellor’s trap. The trap being laid out is one, not too dissimilar from the bad snow episode – where if recovery appears slow, Osborne can raise the alarm that public sector workers are the cause.

It would seem that if Balls is saying this he knows it to be dishonest – therefore him and his party should not be giving undue credence to Osborne’s trap by withdrawing strike support.

To be sure Balls knows, and opposes, Osborne’s plans (he calls Osborne joining the Treasury another “fork in the road moment”). At a speech given at the LSE earlier this month (seen to counter the chancellor’s speech at Mansion House the day before) Balls noted that Britain’s slow recovery could cost families £3,300 by 2015, as well as leaving Britain £58bn worse off. The economies in America, France and Germany have all returned to pre-crisis levels, whereas Britain is still below that by 4%.

Commenting on recent ONS figures for growth, Balls said “These final figures confirm that in the six months since George Osborne’s spending review and VAT rise the economy has flatlined and the recovery has been choked off.”

The former children’s minister can see the risks, has been keen to point out that this is ideological (or what William Keegan calls Osborne’s “political straitjacket”) and so should respond in turn by supporting strike action, while preparing to brush aside excuses given by the chancellor for possible poor economic recovery.

What Recovery?

Esther Armstrong writing for Interactive Investor yesterday said “This was supposed to be the year economies the world over got back on track.” In fact George Osborne was hoping the whole mess would be sorted by now, but his inability to change tack through fear of looking weak has meant the British economy is shooting below target (indeed Jonathan Portes, director of the National Institute of Economic and Social Research and former chief economist at the cabinet office, was reported saying “you do not gain credibility by sticking to a strategy that isn’t working”).

The Office of Budget Responsibility (OBS) has downgraded UK growth projections for 2011 three times now, while we also face a wave of what Duncan Weldon has called “consumer recession”.

Osborne himself admitted that recovery will take longer than he expected, but this has also been compounded with the flatlining of many low and middle income earners. In fact real wages have fallen for the last 17 months and are likely to do so until 2013 – earnings falling below inflation does nothing for consumer confidence, and as Chris Dillow noted (as one of the differences between 1981 and 2010) the ability for people to run up personal debt through loans, in turn offsetting the decline in public spending, is a privilege (if you can call it that) we cannot enjoy today while banks are reluctant to lend.

If Osborne wasn’t so stubborn about saving face, he might have listened to Ed Balls’ idea for a temporary cut to VAT, which would instantly lower inflation, increase real wages, be as easy to implement as to reverse while the cost to do so is way under borrowing forecasts (the former being around £12-13bn versus the latter of £40bn). But alas the horrible show must go on.

What do we have to lose in striking?

In spite of proper Labour support, strike action is necessary. Unions are the only bargaining chip available to the workforce, and the government have been very clear they are not listening.

The damage being done by the cabinet of millionaires (whose pensions, along with other MPs, even after changes “will be among the most generous in the country“) must be challenged. As a Labour party member I’m loathe to say this; but we cannot wait for the opposition any longer – this fight will come from the bottom up, from those most affected by Tory/LibDem bullying, and it is high time this battle was won. This country will no longer be walked all over by the undeserving rich.

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  1. June 30, 2011 at 12:00 pm

    I was on strike today – and a good day it was too. Great turn out from our place – and teachers and civil servants were fraternising, tea and biscuits being handed out and strikers giving out leaflets from all participating unions not just their own.

    • June 30, 2011 at 3:44 pm

      Glad it was a good day for you Dave. Was there any singing?

  2. Edgar
    June 30, 2011 at 6:37 pm

    Balls don’t fall into the trap just put your head in the noose argument perhaps sums up New Labour more than anything I can think of.

    Problem with his VAT reduction idea is that it won’t get the economy going, it will merely slow down the fall. People have become so squeezd that any reduction in VAT will have little affect. This is a problem for capitalism, they can rejoice that the unions are so weak as to be irrelevant but that means the workers have become so worn out, so impoverished that they have nothing much left to give and that impacts capitalist business. Whichever way they turn the inherent contradictions of capitalism remain in place.

    The only thing that can save the economy is export led growth. I would start saying less about China’s human rights record and more about the wonders of the Chinese Communist party!

    • June 30, 2011 at 7:13 pm

      Export led growth is all we have! The VAT reduction will not solve the problem, it will mean for a short time wages are indexed above the rate of inflation, minor savings will be made – the worry is this extra money might only be paying back debt for many families. It’s not a long term solution, but it could kick start a little consumer confidence and that, save for exports, is what we’ve come to rely on. What’s George’s idea? If Richard Murphy is to be believed, Osborne’s notion of expansionary fiscal contraction expects that even though tax cuts are not yet on the cards, we will all be spending money we don’t have in anticipation of them – to him we don’t need a temporary cut to VAT because we should be spending money regardless with money from tax breaks that haven’t happened yet. What fucking planet is that man on!

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