We don’t need fairer austerity, we need to get rid of it

Today’s announcement by our Party leader on our deficit reduction plan is somewhat misguided. We don’t need milder and fairer austerity, we need to get rid of it. Labour rightly says that falling living standards are significantly reducing tax take. However, further reductions in public expenditure will entrench this by dampening economic activity. Given this, why continue with a failed economic strategy?

In better news, this week saw the publication of a report from the OECD which clearly mapped out how a radical departure from the ‘conventional wisdom’ could deliver a far stronger economy. The report shows how growth has been significantly curbed by rising inequlity over the past 30 years. Our economy is over 9% smaller than it would have been had this not been the case – at least £170bn – an astronomical amount. Over £65bn of this would have been available to fund public spending without any need for tax increases.

However the report went much further. What it calls for is hardly rocket science and should be music to socialist ears – redistributive policies. The last three decades were supposed to have delivered the golden age of neoliberalism. Sadly, its legacy is one of growing inequality and economic failure. Labour urgently needs to move on from neoliberalism. This also means ditching failed austerity which cements inequality – the appalling growth in the need for food banks is one of the most visible signs of this. Labour ought to clearly state that it favours redistribution of wealth to secure stronger growth and a more equal Britain.

Sadly, at times, key people in our Party appear captured by failed neoliberal ideology. They look incapable of providing the radical alternative that our country so badly needs. To win in May we must develop an economic strategy which looks beyond the failures of the past three decades.

Yes, there were flashes of this in today’s speech by Ed when he talked about the need for productive investment and building an economy based on high wages and high skills. However, we need to join up the dots if we are to build the new economy that our country so badly needs.

Austerity is part of the problem – not the solution. The big question facing Labour’s economic team is, can they can rise to the challenge posed by the OECD?

Manuel Cortes is General Secretary of TSSA