Coalition’s economic policy: demand focused, non-green and regressive ’80s style…

We are retrenching back into the 1980s, especially when considering the current onslaught upon the welfare and benefit systems. The government’s economic policies are in a utter mess, with them focusing upon the demand side whilst ignoring the supply. There are a number of recent announcements that should send fear through any progressive. The belated LibDem amendment/rebellion is progress but can only do little to offset the tide. Consider for example, IDS’s argument for changes to the law so that those in council houses who fail to obtain work could move to another part of the country where there is work and still be guaranteed a council house.

This rather misses the point. The reason for why many people are on benefits without work is because there is a shortage in labour – and with the current attack on jobs, the job market will become even more static. Therefore, the government needs to stop trying to make out that the problem is with the demand and realise that there is a need for investment and restructuring of supply – there is the need for real investment in jobs, but as in the 1980s – this side of economic theory is rather conveniently missed by the Tories (and now the LibDems).

As well as a cut on jobs, the government is intent on cutting the welfare bill – no wonder a recent report has found that when accounting for public spending cuts the budget will result in the poorest being 20.5% worse off, whereas the richest will only be 1.6%! Osborne has now also admitted that incapacity benefits will be cut – arguing that it is a “very large benefit”. Again, there is a failure here to understand the supply side of the economic argument. There are many jobs that are frankly breaking the DDA – as they fail to provide services and accessibility for everyone. It is unacceptable that disabled people could be punished by a cut in their benefit or forced into work due to the government and employers being too weak to radically reform society so that we reduce and remove social barriers that prevent disabled people from accessing all areas of society.

No longer should we focus upon the demand side, arguing that it is disabled people themselves who are unable to work because of their impairment – we should instead recognise that it is often the inability of society to provide services that prevents many disabled people from working. However, frankly, this is one of the many bi products of the ineffective capitalist system we live in.

The current governmental strategy (economic specifically) also misses the chance to really reshape the economy so that there is greater investment and focus upon a green future. A Green Deal would have been economically valuable – it would have created thousands of jobs, helped our failing manufacturing industry and would help addressed some of these supply and demand issues that the government are getting rather confused.


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