WHAT’S WRONG WITH AUSTERITY? An account of the public meeting by Andy of Brighton Benefits Campaign

Brighton Stop the Cuts Coalition Public Meeting – Friends Meeting House Brighton – Tuesday 2 October 2012

Chair: Garry Hassell from the National Union of Rail Maritime & Transport Workers


Ozlem Onaran Professor of Economics at Greenwich University

Caroline Lucas MP

Pip Tindall from Brighton Benefits Campaign                      

(Southampton Anti-Cuts Union unable to attend)

Ozlem outlined the broad economic picture. In 2012 there is no sign of a recovery. The recession is deeper and longer than the great depression. GDP  has fallen 4% compared to before the crisis. The focus has been on quantitative easing, liquidity, and saving the banks which are now far more cautious in respect of mortgage lending.

Exports have suffered and recently the largest trade deficit in history was reported. Reduced council spending, lowered household income, and more insolvencies have been experienced. Despite historically low interest rates, investment is very limited. Real wages are falling and inequality increasing. The gender wage gap has widened whilst the wealth of the richest has gathered pace leaving society even more polarised. Demand for workers has fallen and the pressure on those who still have a job has become more intense.

She explained how financial deregulation, and irresponsible gambling and lending by the bankers had led to the financial crisis of 2008. A brutal redistribution of income has stemmed from the austerity measures. The income of top earners has rocketed with the abolition of the 50% tax rate.  Given that the earnings of the mass of workers are stagnant or falling who is going to buy products and services? An export-led recovery is not possible due to the global nature of the crisis.

The crisis was repackaged as a, “public crisis” to redirect the blame. The deficit is not even being reduced. Before 2008 public debt to GDP ratio was 44%, by 2009 this had risen to 77%, and it now stands at 90%. Not only has the situation been worsened by the cuts but the UK could have dealt with debt levels in the long term.

Ozlem highlighted the need for the anti-cuts campaigns coupled with increased taxes on high incomes and higher corporation taxes. She also reflected on the 83% top income tax between 1974 and 1979. To address the issues of inequality, lack of sustainability, and environmental degradation, redistribution of wealth is crucial, underpinned by democratic public ownership.

Caroline shattered the myth that austerity is a necessary evil. It is a con trick as the media has sought to shape public opinion by saying, “there is no alternative” in a similar way to the approach to the Iraq War. Politicians have not fully been brought to account. The government has seemingly cut everything that moves and whilst demand has been bled out of the economy, both nationally and globally, there is a crying need for affordable housing, a green economy, and progressive taxes. Tax should not be regarded as evil.

The much vaunted quantitative easing has seen £400 billion issued to the banks but it has not filtered down.  Each year £120 billion is lost to the economy via tax evasion. The social cost of the crisis in terms of unemployment and lost housing is vast. The Liberal Democrats may try to dissociate themselves from the Conservatives but in reality are not curbing the excesses of the latter, merely propping them up. Would they not be better served by leaving the Coalition?

Caroline expanded further on the gravity of the situation. The Uk has the 7th largest economy in the world yet one in four children live in poverty. Even the Institute Of Fiscal Studies estimates there has been a  15% drop in income for the poorest. Two- thirds of people claiming Housing Benefit are in fact working. The Council Tax Benefit budget has been slashed by 10% and local authorities will have to take responsibility. The crisis should not be paid for by the ordinary people who did not create it.

The issue of how to counteract the media was raised from the floor.  More people could contact such as the BBC to express alternative views. Trade unions can also be utilised in this respect. Also, there is the use of direct action to raise awareness of issues. The need to reach out to people more broadly was highlighted. This can be achieved through use of street stalls and leafleting.

Garry outlined the implications of the McNulty Report on the rail industry. There will be far more unstaffed stations and fewer guards on trains. Clearly security and Health & Safety are compromised by this.  There will be a loss of 2,000 station ticketing jobs. Also, 6,300 signalling jobs will go with a plan for merely two hubs to serve the country, one at Manchester and one at Three Bridges. The RMT and ASLEF are campaigning   intensively against the threat of McNulty.

Pip alluded to various attacks on the welfare state including disabled people being assessed as fit for work by Atos Healthcare and denied Employment & Support Allowance, and the passing on of the Council Tax Benefit shortfall arising from the government grant cut.

She then focussed on the issue of workfare whereby people have to work for their Job Seekers Allowance. This is a huge state subsidy to private companies, both providers and users. It is not new and has its origins in the United States. Superdrug is one of the companies   involved.  For   example they are not taking on temporary Christmas staff, instead exploiting workfare. There is very little scope for students, saddled with £9,000 tuition fees, to get part-time or temporary jobs. The schemes also impact in reducing the general level of wages and undermining conditions.

A specific campaign against another user, Holland& Barrett, initiated by Solfed and embracing Boycott Workfare and Brighton Benefits Campaign, forced the company to backtrack. Pip emphasised that workfare is an attack on the entire working class, including disabled people who have been made to sign on and single parents who are now forced to look for work when their youngest child reaches the age of five.  We need a broad based approach. It can be challenged effectively from different angles such as trade union motions as well as picketing.

From the floor, Phil Mellows referred to the forthcoming T.U.C. national demonstration on October 20. It is a chance to fight back and inspiration can be taken from the 2011 protest march on March 26 and pensions strike on November 30. He said it will give a sense of power.  The TUC have discussed the practicalities of a general strike, and that the government is weak. People need to book their places on the train which leaves Brighton at 9.30am and returns from London Victoria at 5pm.

From the floor there was further reference to Superdrug’s use of workfare and that in addition to working for nothing people face the humiliation of being searched when going for a break to see if they have stolen goods. Also the anguish of the many sick and disabled claimants turned down for ESA with zero points, and the hardship of surviving on pension credits were outlined. A further suggestion was to compile a list of shops that are not tainted by workfare.

Andy Richards said there was a crucial need for a political strategy to resist and educate. Only 20% of the cuts have actually been implemented so far. The council was lobbied over the proposed closure of homes for adults with learning difficulties. Two homes were closed on the basis of the casting vote. The social fund is to be devolved to local authorities. Councils need to oppose the government.

Giuseppina explained that workfare is based on divide and rule tactics. After the US introduction of workfare, in Wisconsin and New York half of all municipal workers were replaced by people on the dole. We need to be active together and coordinate by such means as the blog.

A point raised from the floor was that there should be more support for companies that don’t use workfare with perhaps a logo displaying this fact. It was also argued that cuts such as the care home closures are a complex matter with the local council facing stark choices when the problem stemmed from the government. However, Pip pointed out that at some point Green councillors have to stand up to the government and not administer the cuts or they are no different to the other parties.

Steve Guy said that in 2011 momentum was gained from the March 26 protest up to the pensions strike when 2.3 million workers came out on November 30. What will follow the October 20 London demonstration? With reference to the situation in Greece a general strike is not an abstract concept.

Mike Waterman alluded to an increase in police violence on demonstrations. He cited attempts to throw the Queers against Cuts group off the Brighton Pride parade and also to prevent the use of a microphone by the Palestine Solidarity Campaign.

Upcoming Events

06/10/12   Anti-workfare pickets of Poundland stores in Western Road and London Road.  Meet at the Clock Tower 12 noon

13/10/12  Pro-Squatting march. Meet at Victoria Gardens at 2pm.

1/11/12  – Brighton Stop the Cuts Coalition organising meeting.  King & Queen 7.30pm

About Brighton Benefits Campaign

Fighting the assault on welfare since 2010
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