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The Economy

“Austerity” just makes things worse

This government adopted “Austerity” as a policy to tackle the huge public debts incurred due to the banking crisis. Now the International Monetary Fund itself has admitted that Austerity policies have done far more damage to economies worldwide than expected.

In the UK, we have experienced our longest economic downturn in living memory, and few of us are feeling the effects of the supposed “recovery”. And no wonder: George Osborne’s Austerity agenda of slashing public spending has actually slowed recovery and increased our debts. Such growth as has slowly reappeared is funded by another debt bubble: house prices soar, real wages fall, and so more and more families can maintain their living standards only by taking out loans against their property while interest rates remain low. This is not an option at the bottom of the scale, of course, where low-paid workers face huge interest charges when they need to borrow.

There has been a very genuine recovery, though, for the wealthiest in society – at the expense of the poorest. Even in a recession, money does not simply disappear – it changes hands. In this time of Austerity, the UK has more millionaires and billionaires than ever before, and they're getting richer all the time. Some of these millionaires are also MPs who said that the country couldn't afford to pay nurses their 1% pay rise but were unable to stop their own 11% rise through going through.

Meanwhile, more and more ordinary people fall into the class of the “working poor” – hard workers who nevertheless remain in poverty and need state benefits just to put a roof over their heads and food on the table. George Osborne’s rigid economic strategy that has brought us here is set to continue if he is given another term in office. This can only lead us towards another economic meltdown, with even greater consequences for those that can least afford it.

There is compelling evidence that people's health is made worse by public spending cuts, reducing social security, privatising public services and reducing employment to insecure, temporary, and low-paid or unpaid jobs. There is no evidence that these policies are benefitting the economy. On economic, public health, and moral grounds, therefore, we reject Austerity policies as the way ahead in the next parliament.

 

Common sense on taxation and public spending

We understand that current debt levels cannot continue to increase indefinitely. Our deficit and overall debt must be addressed. We believe that this can be achieved.

These are our policies

Progressive taxation. Taxation policies should be based on maintaining a decent standard of living for all, and as income soars way above the level of comfort to ridiculous excess, tax bands should reflect that. We support the re-instatement of – and efficient collection of – the 50p higher rate of tax and we support higher taxes on luxury goods and services

A determined tax avoidance and evasion clampdown. The Tax Justice Network estimates up to £70 billion in tax is evaded each year – just under half the amount of income tax that was actually collected in 2013-14. Tax avoidance is estimated to cost the UK up to £20 billion per year. The Public and Civil Service Union says more than £120 billion is lost to avoided, evaded and uncollected tax. Whatever the true figure, it's clear this money could have a huge impact on stimulating our economy and bringing down our debt. We demand that all due taxes are collected, that greater efforts are made to close the  tax loopholes which enable tax avoidance and that short-sighted cuts to HMRC staffing levels are reversed and inspectors increased  to  focus on tax  evasion by the richest corporations and individuals.

A financial transaction tax. A small levy of 0.1-0.5% on all financial transactions could raise billions of pounds that could be used to stimulate private sector growth and generate more revenue for public services. To be effective, the tax would need to be adopted by all the major economies. Eleven European nations have signed up for it, but the UK, as yet, has not.

 

Taxes on goods and services that are harmful to health.

Increased spending on public services and infrastructure have been shown to give a positive economic return (eg health, education, transport and energy infrastructure). Compelling evidence from the IMF and Oxford and Stanford Universities shows that each pound of public spending put into health and education generates several times as much cash in the economy. This is not just because of the positive economic effects of a healthy and well-educated workforce. Money spent on publicly delivered services circulates within the UK economy instead of being siphoned off to foreign shareholders and offshore tax havens.

We would also encourage investment in our transport and energy infrastructure: in particular, it is crucial to improve cities' transport links outside London, to stimulate their local economies.

Better banking. Small businesses and entrepreneurs need access to loans to grow their businesses. We support the idea of stronger local community banking, and a national state-run bank to support business lending and encourage growth of UK manufacturing industry and small businesses.

Better regulation of the financial sector at EU and G20 level, as our politicians of every hue have shown themselves incapable of controlling sharp operators at national level. The retail and investment arms of major banks must be separated.

Your working life

We support policies to promote full employment. We reject the right-wing ideology that says that a certain rate of unemployment is “natural”. Unemployment is a scourge on the economy, individuals and families. In times when the private sector is failing to provide jobs, judicious public spending on infrastructure projects, and policies to support the growth of UK manufacturing and small businesses, we will offer opportunities for all.

We oppose enforced zero hours contracts. In the case of home care workers, they must be paid at least the Minimum Wage for the time they spend travelling between clients as well as the time spent with them.

We support an increase in the minimum wage with an aim of £10/hour by 2020 and we will also press for individual employers to at least pay the living wage, currently £9.15 an hour in London and £7.85 an hour in the rest of the UK . This would transform the quality of life and health of low-paid workers; slash billions from the benefits bill (actually a state subsidy for low-paying employers); and stimulate economic growth. A Living Wage creates jobs by pumping more money into the economy at the level where it will be spent locally.

We support provision of comprehensive and universal childcare support system. This would pay for itself by freeing parents to contribute to the economy through their taxes for paid work. We would increase investment in the evidence-based early years programmes.

We support gender equality in pay and oppose all forms of discrimination in the workplace. Workers’ rights, their health, and their safety, must be protected.