What difference would the red Tories make to Croydon?


By - Thursday 6th August, 2015

Labour is failing to address structural inequalities, and would have clobbered Croydon just as hard as the Tories, argues Peter Latham


The recent Tory budget, as Croydon North Labour MP and Shadow Minister for Local Government Steve Reed correctly notes, is a disaster for thousands of Croydon families because:

  • Cuts in tax credits will clobber low-paid working parents who could be up to £1,000 worse off, according to the independent Resolution Foundation
  • Croydon is facing a housing crisis, but the budget will reduce the amount of affordable homes being built
  • Croydon has the biggest shortage of school places in the country, but the chancellor did nothing to build the schools we need
  • Croydon has much lower funding for health per head of population than the London average. leading to long waiting times to see a GP, but there was no urgent action to put this right
Labour has allowed the Tories to frame its policies

Steve Reed’s unstated assumption is that the position would have been different if Labour had won the May 2015 general election. Yet, as the table below shows, before the general election the Tories, Labour, the Liberal Democrats and SNP were all committed to cutting the level of public spending in the UK as a percentage of GDP by 2019/20 to that of Estonia, where public spending, according to the International Monetary Fund, is 38% of GDP compared to 55% in both Finland and France.

Moreover, as George Monbiot noted, Labour “allowed the Conservatives to frame its politics”: as the table also shows, they planned to cut ‘unprotected services’ (such as local government) at a slightly faster rate than the Tories. Therefore Labour’s manifesto claim that “[f]air funding will be restored across England… so that local authorities can plan ahead on the basis of need in their areas and protect vital services” was vacuous rhetoric due to its refusal to confront structures of inequality.

Post-election austerity: parties’ plans compared

Conservative

Labour

Liberal Democrat

SNP

Total public spending

2014/15

40.7

40.7

40.7

40.7

2015/16

39.6

39.6

39.6

39.6

2016/17

38.3

39.2

38.7

39.2

2017/18

37.0

38.7

37.9

38.8

2018/19

36.1

38.3

37.9

38.3

2019/20

36.1

38.3

37.9

37.7

Total unprotected spending

2014/15

10.2

10.2

10.2

10.2

2015/16

9.7

9.7

9.7

9.7

2016/17

9.2

8.7

9.2

9.2

2017/18

8.7

8.2

8.7

8.7

2018/19

8.2

8.2

8.2

8.2

2019/20

7.6

7.6

7.6

7.6

Total social security spending

2014/15

11.9

11.9

11.9

11.9

2015/16

11.5

11.5

11.5

11.5

2016/17

11.0

11.4

11.2

11.5

2017/18

10.5

11.1

10.9

11.2

2018/19

10.3

10.9

10.7

11.2

2019/20

10.0

10.6

10.5

10.8

Source: Crawford, R., Emmerson, C., Keynes, S. and Tetlow, G. 2015. Post-election austerity: Parties’ Plans Compared, Institute for Fiscal Studies, Briefing Note 170, April, Table A.4, p.41, Table A5, p.42, Table A.7, p.43

 

It is vital to persuade people that austerity is unnecessary

The July 2015 forecast by the Office for Budget Responsibility is that total UK public spending as a percentage of GDP will now fall from 40.7% in 2014/15 to 36.3% in 2019/20. The promised budget surplus by 2018/19 has now been shifted to 2019/20, but this does not “represent a let up in the overall scale of cuts”: since the total cuts between 2009/10 and 2019/20 are now expected to be £120 billion in today’s terms. In particular, local councils have already had to make £2.5 billion further cuts this financial year, moreover; and the funding gap is expected to be £9.5 billion by the end of the decade.

As the Croydon Assembly and the People’s Assembly argue, there is vital work to do to persuade people in Croydon and across Britain that austerity is unnecessary and that spending on local government and other public services can be increased. Consider the following opportunities to gain revenue by measures not being considered at present:

  • a 2% wealth tax on the richest 10% of the population – who owned 44% of Britain’s wealth in 20010-12 estimated to be £4.2 trillion – would raise £84 billion a year
  • ending tax dodging by the super-rich and big business would raise £70 billion a year
  • a ‘Robin Hood’ tax on city transactions would raise £7.5 to £112 billion a year
  • the de-commissioning of Trident – estimated to cost more than £100 billion over 30-40 years – would raise £3 billion a year
Croydon’s only Labour MP remains committed to neoliberalism and austerity

Meanwhile Chris Leslie, the Labour Shadow Chancellor – when asked whether he supported George Osborne’s new budget surplus law – said: “Absolutely”. And Labour’s national leadership (including Steve Reed) remains committed to neoliberalism, austerity and ‘corporate welfare’ – i.e. all the subsidies and grants paid to business, as well as the corporate tax loopholes, subsidised credit, export guarantees – which now stands at £93 billion: and amounts to £3,500 a year given by each UK household. This is greater than the entire public sector deficit in the latest financial year (excluding the effects of the bank bailout) of £89.2 billion.

As economist Michael Burke argues: “It is business, not the poor, people with disabilities, women burdened by increased carer responsibilities or public sector workers, who should shoulder the burden of the crisis it created”. Therefore our only hope is that the Labour leadership contest is won by Jeremy Corbyn – who, according to private polls by his rivals, is now on course to win.

Jeremy Corbyn MP speaks at Ruskin House, Coombe Road, Croydon, at 7:30pm on Tuesday 4th August. 

Peter Latham

Peter Latham

Dr. Peter Latham, pictured here with Councillor Andrew Pelling, is a former researcher on direct labour at the London School of Economics and full-time official in the University and College Union. From 1999 to 2006 he was Treasurer and then Secretary of the Labour Campaign for Open Local Government. His previous publications include The Captive Local State: Local Democracy under Siege (2001), New Labour’s US-Style Executive Mayors: The Private Contractors’ Panacea (2003), The State and Local Government: Towards a new basis for ‘local democracy’ and the defeat of big business control (2011) and The Imminent Demise of Local Government? (2014). He is also a member of the Communist Party of Britain, the Labour Land Campaign and Croydon Trades Union Council’s Executive Committee.

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  • Anne Giles

    Jeremy Corbyn would be a disaster. He wants to nationalise everything, resulting in very poor services.