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Thursday, 18 July 2013 00:00

Economy needs a fresh approach

No-one should be taken in by government claims that its massaged unemployment figures indicate an upturn in the economy.

Employment Minister Mark Hoban claims that the existence of half a million vacancies shows that "there are opportunities out there for those who are prepared to work hard, and who aspire to get on in life."

If that's the level of numeracy required to become a minister in the conservative coalition government, it might explain something about its political bankruptcy.

Even taking at face value his half-million figure, setting it against the official and grossly underestimated jobless total of 2,510,000 indicates a shortfall of 2 million.

This alone holes government policy below the waterline, based, as it is, on the false claim that it is unemployed people's inadequacies or refusal to search for work that causes them to be jobless.

Ongoing government refusal to stimulate the economy to increase output and provide jobs makes chronic, long-term unemployment endemic to Britain's economy.

Ministers may congratulate themselves on marginal changes to the headline unemployment figure, but they know that this is kept artificially low by, among other dubious measures, counting every claimant on a dead-end private "training" scheme as being employed.

These schemes that are financed by the government's privatised work programme are a mixture of success and failure.

In terms of finding work for participants, they are less effective than Department of Work and Pensions jobcentres, but if assessed by the publicly funded profits that they generate for the privateers, they are a rip-roaring success.

This has been the priority of the Tories and their Liberal Democrat hangers-on - to convert public funds into private profit for their class.

They would prefer, like their new Labour neoliberal co-religionists, to waste our taxes on private cosmetic schemes rather than invest in productive industry and employment.

Nor is there any likelihood of consumer demand sparking an economic recovery.

When average pay packets are growing by as little as 1 per cent a year and official inflation figures - again understated - are increasing by three times that figure, the squeeze on working people's living standards is intensified.

Far from encouraging higher production through higher demand, most workers have to tighten their belts.

In contrast, big business and the rich are living off the fat of the land, encouraged by government tax handouts.

Advocates of lightening the tax burden on companies and the wealthy elite usually claim that this will encourage investment and a trickle-down benefit for all.

In reality, corporate financial reserves have never been higher, but big business refuses to invest, effectively blackmailing the rest of society into guaranteeing profit levels before it will loosen its purse strings.

Profit is always the bottom line for the private sector, as the Transport for Quality of Life think tank has illustrated in its analysis of payments made to government in the rail industry.

Public company Directly Operated Railways, which operates the Intercity East Coast service, has outperformed the private outfits First Great Western and Virgin West Coast to a substantial degree.

Not that this reality can be expected to convince government or opposition to accept the need to return our railways to public ownership.

There will be no appreciable reduction in Britain's unemployment figures until there is an understanding that government involvement in the economy has to replace blind faith in the power of market forces.

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