Austerity Is a Choice, Labour Must Offer Another – Jeremy Corbyn

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Austerity is a political choice not an economic necessity. When the Chancellor rose to his feet at the emergency Budget in July, and when he does so for his Spending Review in October, what is being put forward is an ideologically-driven rolling back of the state.

The analysis published today by the TUC reveals how the Budget gives money to the rich, but takes away from the poor.

jeremy corbyn

This is the Conservative project, dressed up in the post-crisis language of budget deficits and national debt for extra impetus. Inequality doubled under the Thatcher government, and her heirs seem to be doing all they can to ensure that legacy is extended.

The Budget showed austerity is about political choices, not economic necessities. There is money available: the inheritance tax cuts announced in the Budget will lose the exchequer over £2.5billion in revenue between now and 2020. What responsible government committed to closing the deficit would give a tax break that only applies to the richest 4% of households?

The Conservatives are giving away to the very rich in inheritance tax cuts twice as much as reducing the benefit cap will raise by further impoverishing the poorest, and socially cleansing many towns and cities.

Another choice was to cut UK corporation tax to 18%, which at 20% is already the lowest in the G7, lower too than the 25% in China, and half the 40% rate in the United States.

The Treasury estimates that this political choice will see our revenue intake from big business fall by £2.5billion in 2020. That’s nearly twice the amount saved by cutting the tax credits available families with more than two children.

In such circumstances, Labour must be clear: we oppose the Budget, and we oppose austerity. As a group of 40 economists wrote to the Observer a few weeks ago, “opposition to austerity is actually mainstream economics, even backed by the conservative IMF”.

The language of “bringing down the deficit” is non-controversial, it is the method (austerity) that reveals the Chancellor’s agenda as just a cover for the same old Conservative policies: run down public services, slash the welfare state, sell-off public assets and give tax cuts to the wealthiest.

I stood in this race because Labour should not swallow the story that austerity is anything other than a new facade for the same old Conservative plans.

We must close the deficit, but to do so we will make the economy work for all, and create a more equal and prosperous society. Bringing down the deficit on the backs of those on low and average incomes will only mean more debt, more poverty, more insecurity, more anxiety and ultimately more crisis.

We must invest in a more productive economy. Our national infrastructure – energy, housing, transport, digital – is outdated, leaving the UK lagging behind other developed economies. In the Budget, the Chancellor cut back public investment even further.

You cannot cut your way to prosperity. We need to invest in our future. And that takes a strategic state that seeks to shape the economy so that it works for all.

That is the choice for Britain and the choice that Labour must offer.

Jeremy Corbyn is the Labour MP for Islington North and Labour Party leader.

This article was originally published on 7.09.15

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Pictures courtesy of Robert Livingstone

 

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14 thoughts on “Austerity Is a Choice, Labour Must Offer Another – Jeremy Corbyn

  1. Austerity leads to more privatization & increased costs to tax payers for the same services. Osborne’s austerity policy between 2010 – 2015 didn’t balance the budget deficit but it did double the national debt. Money creation must be put back in public hands & the bankers who caused the crash must be held to account.

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  2. The austerity policy was never ever about reducing the deficit, it was only ever about further enriching the already wealthy, and it was planned long before the last recession, as evidenced by that thoroughly unpleasant and weird character Oliver Letwin, who, before the recession inadvertently made a remark indicating that the Tories intended to carry out a policy of “austerity”

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    1. Yep, something I’ve been saying since 2010, and writing about since 2012. We were actually out of recession by the last quarter of 2009. That was reported by the BBC at the time. The Tories put us back in by 2011.

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      1. I remember us being I. Recovery In late 2009 and through first quarter of 2010 right before the Tories took office. There was even a quarter of growth during their first few months of office before it started to decline in late 2010 early 2011.

        Still bugs me how the electorate could go with the Tories for the second term give that we lost our AAA credit rating while under their watch and seen the selling off of Royal Mail and our Royal Bank Of Scotland shares at a loss. How in hell is it that Tory voters can even think the above things are financially credible.

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      2. Yes, despite Osborne promising to keep our triple ratings, he lost the Fitch and the Moody ones, hardly lend to their economic credibility. Yes, how worrying that the Tories have got away with not only lying so adeptly, but with suppressing the truth, too.

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    1. The title says it’s by Jeremy Corbyn, and I have credited him on the article as well, saying when the article was originally published, and providing his twitter account details. The article comes up under kitty jones because it’s my blogsite, and I have no control over that. As I said, Mr Corbyn is credited twice, so you have no reason to be concerned at all.

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  3. Thanks for posting this article. I am in two minds about Corbyn, as I wouldn’t count myself a socialist, more a social democrat, believing in a more socially just as well as a more productive capitalism. Investment in infrastructure seems to be badly needed, and if it contributes to growth would help to bring down the deficit. The Tories are indeed ideologically committed to a smaller state, although The Economist magazine has reported that satisfaction about public services has not fallen despite the cuts. The cuts plus the Eurozone crisis created a stagnant economy, and recovery happened when Osborne eased up on austerity in 2012. It is also based more on consumption than investment, and this cannot be sustained in the longer term. So higher public investment: yes. People’s QE to fund it? Maybe, if the economy is really struggling, otherwise it could be funded through borrowing at the current very low interest rates.

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