We publish here the annual report by the President of the Coventry Trades Union Council, Darrall Cozens, who discusses the impact of Tory austerity so far, the rising inequality in Britain and internationally, and the perspective for class struggle on the horizon.
We publish here the annual report by the President of the Coventry Trades Union Council, Darrall Cozens, who discusses the impact of Tory austerity so far, the rising inequality in Britain and internationally, and the perspective for class struggle on the horizon.
There are few things in life that are certain; but one thing we do know in advance is that whoever wins the general election in May of this year will continue with massive attacks on working class living standards under the guise of austerity. All four of the main political parties are wedded to the capitalist system, and that system can only survive by cutting the share of wealth that goes to working class people. So the never ending trend continues – the rich amass vast fortunes and the rest of us suffer direct cuts in wages, jobs, terms and conditions, and indirect cuts in the social wage of public services.
Cuts, attacks, and austerity
Since 2010 the onslaught on our living standards has continued unabated. Yet despite the massive cuts that have taken place, the original current account deficit of £170bn has only been reduced to just under £100bn. Take one fact: local government expenditure comes under non-protected government spending. In 2009 that totalled £188bn. In 2014/15 it will be down to £147bn. By 2019/20 it will be £86bn, as by then the Coalition wants a surplus of £23bn. George Osborne’s Autumn Statement from December 8th 2014 makes grim reading. By 2019/20, spending on public services per head will fall from £5,650 to £3,880.
Has all this sacrifice worked to end the economic crisis? The economy is growing and jobs have been created, but almost all of them pay such low wages that virtually no tax is paid or people have become self-employed on even lower wages. Real wages for the majority have fallen by between 8-10%, the biggest fall since the 1920s. Public sector workers have seen real cuts in living standards of around 15%. Public spending is set to fall to 1938 levels, with 60% of cuts still to come.
And how have ordinary people managed to survive, despite historically low interest rates that have benefited those with mortgages? People have cut back on spending and have thus reduced demand in the economy. For that reason Cameron has recently echoed the demand of the TUC that employers should raise wages to stimulate economic growth. Survival has also come through more loans being taken out. In 2008, household gross debt was 170% of GDP. On present trends it will be 185% of GDP by 2020.
So massive attacks on the way! Even the so-called protected areas will be cut, with school budgets not rising with inflation leading to a £1bn shortfall or the loss of 27,000 full time teaching posts at a time when school populations are rising.
Inequality rising
While we suffer, the rich are doing very well. The recent HSBC scandal has shown that those who own and control banking and finance determine the rules of the game. In addition to companies and individuals evading and avoiding tax, tax changes made by the Coalition mean that Corporation Tax receipts have fallen from £7.3bn in 2006/07 to £1.6bn in 2013/14. In January of this year Oxfam published figures that show that the top 1% of the world’s population now own 48% of the world’s wealth, up from 44% in 2009. The bottom 80% own 5.5% of the wealth. One billion human beings struggle to exist on 80p per day. By 2016, 1% of the world’s population will own more wealth than the other 99%. 80 people own the same amount of wealth as more than 3.5 billion people, down from 388 people in 2010.
This is not just a world phenomenon. At the same time as the Oxfam report, separate research by the Equality Trust, which campaigns to reduce inequality in the UK, found that over the past six years the richest 100 families in Britain in 2008 had seen their combined wealth increase by at least £15bn, an average increase of £150m per family during a period in which average income increased by £1,233. Britain’s current richest 100 has the same wealth as the bottom 30% of UK households. The Joseph Roundtree Foundation states that 4 out of 10 families are “too poor to play a part in society”.
And it is going to get worse. Nobel Prize winning economists and the former USA Treasury Secretary Larry Summers have all coined the new term of “secular stagnation”. This fits in with the latest OECD prediction for the next 60 years. We will experience stagnating economies that might experience occasional growth stimulated by credit and asset bubbles. This new period will also see rising inequality as the rich amass even greater fortunes.
This economic instability will produce political instability. It was no accident that the head of the IMF, Christine Lagarde, stated at the Davos summit meeting in January 2015 that inequality was bad for growth, sustainability and stability. She gave no thought for the plight of the poor. Her main concern was the effect of rising inequality on the future of the capitalist system.
Political solution needed
It is against this background that over the past year Coventry TUC has tried to carry out its mission of defending working class people, at home and abroad, against the ravages of capitalism. We have worked with trade unions in Coventry, especially UNISON at the city council – the marvellous march and rally of February 21st 2015 is testimony to this – to defend their members. We have supported with finance various campaigns nationally and internationally, and I hope that we will continue to do so. When we are asked for support, the criteria we have used are whether the cause is genuine and whether those who ask are democratically accountable.
Coventry TUC is not a political party, but though our discussions – and we have many – most of our delegates have realised that the problems facing our people – working class people – can only be resolved through political action. In this way we are no different from the time when trade unions created the Labour Party as they sought political solutions to day to day problems. It is indeed unfortunate that the LP has disappointed so many. It is also unfortunate, from my point of view, that there is no mass alternative to Labour as there is in many European countries – Syriza, Podemos, Front du Gauche, die Linke and so on. If there were such an alternative, I am sure that many members of my party, the Labour Party, would seek political solutions elsewhere.
Battles on the horizon
And now back to certainty. All the conditions that were prevalent before the 2008 crash are once again present but on a far larger scale. Mighty battles are on the horizon to defend what we have won as the organised labour movement through decades of struggle. As the Coventry TUC we will continue to work with organisations at work and in the community, both near and far, which seek to defend and enhance the gains we have made.
However, I strongly believe that so long as we have a capitalist system that reels from one crisis to another, we will have attacks on gains made by working class people. The only way to put an end to this is by fighting to change the system, to put an end to capitalism and create a new society – a socialist society, where the wealth created socially is socially owned and managed for the benefit of all, and not just the 1% who presently sit at the top of society.
