For the first time in many years we are faced with an election where there is a very clear difference between the two main parties. For me this is a choice between hope and despondency. It is now nine years since the global economic crisis, seven of those years under a Conservative government yet we are told that we face many more years of austerity, further cuts to services, tough working conditions and low pay.
In the past I worked with businesses that were failing. In some businesses it was necessary to make cuts to spending, in others it was pricing policy where they were covering marginal costs but not the underlying costs of the business. Often it was about growing the business out of trouble, typically by investing in the business to make it more effective and able to sell more products. In many ways this country is the same. In some areas there may be the need to make some savings but after so many years of cuts I doubt there is much left. If anything I think the cuts have gone too far restricting our ability to grow the economy and that has created a vicious circle from which we seem unable to escape without a radical change in policy. As such we need to invest in the country, building infrastructure, enhancing employment skills stimulating demand and positioning Britain as a forward thinking, effective and growing economy. Part of that is also about getting companies and the very richest in society to pay their fair share of tax to cover the underlying costs of our society, such as schools, hospitals and care for the elderly.
I looked at the Office of National Statistics figures for underemployment in the UK. Those are people who are willing and capable of working more hours. The latest figures show that there are 3.5 million in that group, a massive under-utilised resource that could be generating growth for the economy. However, the incentives to invest in new equipment and machinery seem limited if the growth of the economy is uncertain and if people have little spare money in their pockets to buy products. I have spent the last three weeks looking for jobs. What continues to shock me is how many employers in central London still expect people to hold down responsible jobs for £7.50 and hour and for under 25s, even less (£5.60/hour for 18-20 year olds and £7.05 for 21-24 year olds). Given that the tube fare into London can be £47/week it leaves a minimal amount to survive on. Pushing the minimum wage up to £10/hr will help some of the very poorest, allowing them to spend some of that extra money buying goods and services. It will save on state benefits that will no longer be payable and generate additional tax income, both income tax and VAT on goods and services purchased.
Labour's proposals for investing in major infrastructure projects, building lots of new affordable homes and pushing up minimum wage all seem entirely sensible solutions creating jobs, creating demand for products and putting money into people's pockets. The construction sector reckon that around 90% of construction supplies are sourced in the UK. That is why it is such an effective economic stimulator as well as meeting the need of millions who are in cramped, expensive and insecure accommodation. In addition, the more people who are in work and spending money, the more tax is generated and the fewer benefits are paid out. Again it just makes sense.
Another Labour policy is the abolition of University tuition fees which also seems an eminently sensible idea. From my perspective the Student Loan scheme is one of the largest Ponzi schemes ever conceived. The House of Commons Library analysis of student loan debt says; "The Government has projected that the outstanding cash value of publicly owned student debt in England will increase to around £100 billion in 2016-17, £500 billion in the mid-2030s and £1,000 billion (£1 trillion) in the late 2040s". The report also says that it estimates that 60% of post 2012 students(when tuition fees rose to £9,000 a year) will have some of their loans written off due to the failure to repay them in 25 years. This means the amount written off will run to hundreds of billions of pounds. In effect the government is lending money today and in 25 years time someone else will have to pick up the mess. At least a government paying for fees now is an honest way of treating this investment in growing our skills base.
Investing in the NHS is also an eminently sensible idea, There does need to be change to make sure patients get the best possible service, cost effectively, but closing A&E departments and running hospitals at 98% bed occupancy isn't the way to do it. The Conservatives will press ahead with the Naylor report which will result in NHS land and assets being sold off. The risk is that it will generate some cash in the short term but will limit the options for developing new treatment solutions such as polyclinics, and intermediate/ re-ablement care facilities in the future, something that seems to happen with depressing regularity.
There are lots of other reasons why voting Labour seems the only sensible option but probably more than anything else, it offers hope that things will get better. Another five years of austerity, low wages, declining public services and a growing inequity in society seems to be what the Conservatives are offering and that is not for me.
Standing up for common sense in New Barnet