A respected economics professor from the University of Plymouth visited Truro College on Friday, and described damningly the dangerous gamble Cameron and Osbourne are taking by inflicting the biggest cuts upon the public sector since the 1930s.
Professor Peter Gripaios said the cuts, which failed to fix the British economy then, are unlikely to restore our economy now, and that going ‘cold turkey’ on public spending could lead to ‘stagnation’ and a possible free-fall in the housing market. The cuts ‘assume the best year for export growth since 1974’, which in the global economy’s current state we certainly won’t see.
Cutting jobs (over 1,000,000 according to a recent CIPD estimate) means the government receives less in tax receipts, the number of people relying on benefits skyrockets, and since jobless people cannot spend as much, businesses struggle and the economy will not be stimulated. Austerity measures have failed in Japan, and now Ireland (which is currently seeking an EU bailout). Only growth measures will get us out of this ‘mess’ – otherwise, unemployment will increase further and it end up taking decades for the economy to recover.
The most prescient part of the presentation was his analysis of how the cuts will affect the South West. The Severn Barrage is being scrapped, which would have created hundreds of jobs and up to 5% of our energy needs. The decision to scrap it is immensely short-sighted and makes the shift from coal and gas to renewables significantly harder.
Halving the 24-hour search and rescue service run by the MOD at Chivener in Bristol will mean a huge area of the South West (as the service covers much of Devon and Cornwall too) could lead to a more dangerous coastline, especially around the Bristol Channel. Furthermore, MOD cuts in Bath put around 3,000 jobs at risk. There have already been protests, but once the cuts hits, the region will take a great deal of action – strikes, protests and other demonstrations are yet to come.
Unison estimate that Exeter could see up to 12,000 workers losing their jobs. Almost 40% of workers in the area are employed in public admin, health and education: key areas under attack in the Spending Review.
Devonport, which employs around 4,000 workers (after employing tens of thousands before the Thatcher years), is set to face millions in cuts. Osbourne is starting again where Thatcher left off.
Unions such as Unison, Unite and the PCS must organise wide-scale action in the South West. The should be a one day general strike nationwide to defend working people and their livelihoods. Communities can also organise to work with unions on this, along with those on the left in the Labour party and other organisations.
Peter Gripaios, no left-winger (he seems to believe most people receiving benefits are ‘scroungers’), outlined in his lecture the dramatic decline in tourism, Cornwall’s primary income source, caused by the VAT rise (less disposable income) and job losses. But as a CND member, it was also refreshing to hear Professor Gripaios speak out against Trident, believing it should be cut and explaining that the UK is trying to ‘punch above its weight’ by having a nuclear weapons system which costs billions of pounds every year to upkeep.
The lecture therefore showed me that the concerns many have about the coalition’s economic butchery are more mainstream than I thought, and that academics are now accepting the Con-Dem savagery does indeed represent a massive threat to the future of the British economy.