Brussels isn’t the bad guy. Tory cuts cause Britain’s troubles

Phillip Inman in The Guardian


The current and previous governments are to blame for our economic woes, not Brussels. Photograph: Frederick Florin/AFP/Getty Images

Don’t blame the EU for your troubles, blame Tory austerity. This is the message Labour voters should hear from Jeremy Corbyn. It is a message Ed Miliband could have made more forcefully during his term as Labour leader, when the conversation on the doorstep turned to immigration. Instead, he appeared to choke with embarrassment.

Corbyn has a higher embarrassment threshold. He could look the immigration question in the eye and not blink. Unfortunately, the Islington North MP considers debating immigration off limits.

So, last week, Corbyn tried to persuade voters that the EU is the workers’ friend and a bulwark against a bonfire of employment protections. That’s not an unreasonable position. Yet if immigration is the main source of anger outside the south-east, and if it is driving the Brexit campaign to a possible victory, the subject needs to be tackled head-on. If you think Britain is a great place to live that has been ruined by an alliance with other EU nations, you are mistaken and Labour needs to make that point.

Here are five reasons that the former coalition government and the current Tory administration are to blame, and not Brussels.

Jobs


It is easy to walk around an engineering practice in London, a hospital in Leeds or a leek farm in Lincolnshire and conclude that foreigners are stealing “our” jobs. But, in the main, the roles would be unfilled if they were kept out. The work would probably go abroad.

On one level, the fault lies with consumers and employers, large and small. Consumers would buy a foreign leek before one grown here picked by a Brit who was paid more and treated better. Employers are at fault for not training school leavers, older workers and job switchers because it’s cheaper to hire foreigners. Profits are calculated on this basis. Moreover, without cheaper labour there would, in many cases, be no business.

So foreigners allow employers to expand the number of jobs. That’s what the figures tell us. Compared to this time last year, there are 461,000 more people in work. People from the rest of the EU grabbed a majority of the jobs, but the substitution effect with UK nationals was only at the margins. Overall, the number in work just keeps going up and the UK now has a record employment rate of 74.2%.

Look a little closer and it is clear the government has played a big part by cutting skills and training budgets, laying waste to further education and demanding workers accept precarious employment, whether it be zero-hours contracts or self employment.

Vacancies


Job vacancies are running at a higher level than we have seen at any time this century. A small dip in recent months still leaves the number at 750,000. Most are for services jobs, as one might expect, with the largest number among retailers and wholesalers. Car repair firms reported a 143,000 shortage. The NHS and social work sector accounted for 119,000 of the total.

Finding a mechanic, or hiring a nurse, is as much a problem in Leeds as in London. It’s not just about a lack of skilled jobs being created in the north, but also a mismatch of people to jobs – not a problem invented in Brussels.

Wages

Adjusted for inflation, average wages have collapsed since the 2008 crash. Workers absorbed cuts in overtime and basic hours to keep their jobs.

Since the recovery got into full swing in 2014, wages have nudged ahead of inflation, but not enough to fill the gap. Part of the reason is the lack of investment by employers who rely on cheap workers.

But the UK, like all developed economies, is also suffering from the effects of globalisation, which allows multinationals to invest where subsidies are most generous. Ford has centred much of its European operations in Turkey for that reason. Without investment in skilled jobs there will be no increase in wages, but that is not on the Tory agenda.

Housing

If the worry is that housing is either poor quality or too costly, for yourself and your children, blame successive governments for failing to support good quality state-sponsored housing.

The taxes from migrant workers could be used to fund it, but the current and previous governments have preferred to reduce the top rate of tax and protect pensioners’ benefits.

There is no evidence in the last 100 years that shows private builders can meet the nation’s needs. This means housing associations have to find funds to build – but ministers are denying them access to finance, and councils can’t offer builders land when they are forced to sell to the highest bidder.

Health service

If the queue at the hospital and GP is a problem, this is the result of austerity measures that cut spending growth from 4% a year in real terms to 1% since 2010. The NHS, coping with an ageing society, was supposed to implement reforms to fill the gap but, to no one’s surprise, this project has so far failed. Worse, in his last budget, George Osborne slashed council spending on health by £800m. That’s cash used for local mental health services and preventative policies, such as tackling obesity. He told local authorities to put up council tax by 2% to fill the gap.

It’s cuts that lead to queues – in a race to the bottom that Osborne, despite his rhetoric, thinks is just fine.