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End austerity now call

Unite and Labour pile on the pressure to end austerity ahead of Budget
Hajera Blagg, Friday, October 26th, 2018

Labour has called on the chancellor Philip Hammond to use next week’s budget to make good on the prime minister’s pledge to end austerity.


In a speech to trade union and business representatives, Labour’s shadow chancellor John McDonnell said on Thursday (October 25) that the government’s Autumn Budget on Monday (October 29) would prove whether Theresa May was being true to her word when she said earlier this month ‘austerity is over’.


He pointed to research showing the scale of the task ahead of the government if it really is to end austerity – at least £7bn will be needed to halt planned cuts and £17bn will be required to undo the damage of the last decade.


Acknowledge the damage

But McDonnell said that the ‘first step’ the government must take in honouring its commitments is to “acknowledge the scale of the hardship eight years of Tory austerity has inflicted on our people and our communities.”


He highlighted how different groups of people – from children, four million of whom are now living in poverty, to elderly people who cannot access social care, to university debt-laden students, to low-income working families crushed by the introduction of Universal credit and more – who’ve borne the brunt of austerity.


“Eight years of Tory austerity have undermined much of the social fabric of our society and is putting our future at risk,” he said.


“Faced with this scale of damage inflicted on our community we need decisive action to end and reverse austerity not some vague promises for the future and a few financial conjuring tricks.”


The shadow chancellor slammed the government for its botched handling of Brexit, which will only worsen prospects for ordinary people hit by nearly a decade of austerity.


‘Trick or treat’ budget

McDonnell accused May of throwing Hammond “under the proverbial bus with her unilateral announcement of the end of austerity.


“The result has been that in the weeks since Tory party conference the lights have been burning very late into the night in the Treasury as the quiet Budget gets dumped and the officials have to dress up existing announcements and a few off the shelf stunts into something much more grandiose.”


He predicted that under “the pretence of a big Budget” on Monday, people instead will be handed down “a trick or treat Budget” two days before Halloween.


The Labour frontbencher set out his party’s own approach to undoing the damage wrought by Tory austerity and to growing the economy under a future Labour government.


This will include an investment programme and “an industrial strategy with a mission-based approach prioritising innovation, tackling climate change and regional growth”.


He pledged “to share the prosperity we create by ensuring decent wages, trade union rights, representation of workers on boards and spreading ownership within our economy.”


Commenting on McDonnell’s speech, Unite assistant general secretary Steve Turner said the pressure was on for the government to end austerity once and for all.


“We will hold this government to account for the explicit pledge May made at the Tory Party conference this year that austerity was supposedly over,” he said. “The untold damage this government has done to ordinary people must end.


“McDonnell’s speech today has again shown that only Labour has a plan to not only undo a decade of austerity but it has a bold vision for a future Britain whose public services are well-funded; whose infrastructure is properly invested in and whose wealth is shared fairly.  If this government can’t make good on its promises over austerity then it must make way for a Labour government that can.”


PFI U-turn?

Meanwhile, Unite has welcomed reports that the government may be considering a U-turn on Public Finance Initiatives (PFIs) in the wake of Carillion’s collapse earlier this year.


The construction giant held a network of PFI contracts – after its demise the failure of PFIs came to the fore as vital public projects such as Royal Liverpool Hospital were thrown into limbo. Research has also shown that PFI projects, far from providing value for money, end up costing 40 per cent more than publicly financed initiatives.


“Industry insiders” have reportedly said that while the government won’t undo already existing PFIs, Hammond may “kill off PFI for good”.


Unite assistant general secretary Gail Cartmail said that “if these reports are correct this is a step forward as PFI schemes cost taxpayers billions of pounds, with the spivs in the city coining it”.


“However if the government is serious about using the budget to tackle bandit capitalism then it needs to go much further,” she added. “It must not only end the PFI scam but adopt Labour’s policy of reviewing all PFI contracts and bringing the worst offenders back in house.


“Carillion’s collapse was not just a result of problems on major construction projects but was equally about its addiction to outsourced contracts, many of which were linked to PFI contracts. This type of facility management, maintenance and cleaning contracts should be the first to be brought back in house.


“While the demise of PFI is long overdue, the government needs to be entirely clear about how it will be replaced,” Cartmail went on to say. “The UK is crying out for infrastructure investment, including hospitals, schools and roads, and these schemes must not be delayed or mothballed.


“If the government has learned the lessons of PFI, then future infrastructure projects should be directly funded by the taxpayer, entirely removing financial speculators from the equation.”


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