Economy, In Focus

The British recession: cutbacks, strikes and general discontent

Popular discontent is brewing throughout Europe in response to its governments’ neoliberal proposals to tackle the consequences of the financial crisis. Now it takes firm hold of the United Kingdom as trade unions reject cuts to public spending.

Odalys Buscarón

As with Greece, Spain, Portugal, Germany and France, the time of tightening belts now appears to have caught up with London.

Some believe that it was inevitable given the damage to the British economy caused by the recession, and that such steps might have been expected from a conservative government.

Even so, during a speech at the EU summit intended to solve the crisis in Greece, German Chancellor Angela Merkel demanded responsible measures to be taken by all member states in view of the mess amid the Eurozone.

The arrival of conservative forces into power, along with their plans for budget adjustment and welfare state reform, has sparked resistance amongst main trade unions warning of further loss of jobs, salary reductions and a reversal of social benefits.

In office for only a matter of weeks, the conservative Prime Minister David Cameron announced last May how he himself foresaw the painful adjustment plan. He admitted that it would change the lives of the British population for years to come.  His ally in the coalition government, Deputy Prime Minister Nick Clegg, explains flatly, “the decisions [about the plans] will not be received well by the public”.

The government has proposed public spending cuts of £6.2bn (some €7.26bn) in order to cap a fiscal deficit equivalent to 11 per cent of GDP.

However, these numbers are only a draft of the budget package that Cameron’s government intends to use to clean up its domestic finances.

In the midst of a wave of neoliberalism many risk drowning; some 300,000 jobs in the Public Sector stand to be lost, say the unions.

Other sources, such as TheTimes, The Sunday Times and The Guardian, speak of up to 700,000 jobs being dropped in coming years.

To add to the bad news, the leader of the Tories (meaning Conservatives) claimed at their recent annual party conference that many social benefits would be axed. Notably, this includes many child benefits (the so-called baby cheque) and housing benefits.

The plan envisages an initial period of reduction in 2011, including a VAT rise from 17.5 to 20 per cent, and subsequent heavier cuts of up to 25 per cent throughout different departments and sectors.

According to the Chancellor of the Exchequer, George Osborne, it is a matter of taking the first of a series of steps to re-establish stability for the economy, in the wake of the most serious financial crisis in the UK for half a century.

Social Costs

In response to arguments put forward by the British government to justify their fiscal adjustment policy, labour organisations and independent experts warn of those workers who will bear the biggest brunt of the cutbacks, particularly the most vulnerable in society such as poorer families, retired workers and single mothers. Preliminary estimates in a recent article by The Sunday Times, suggest that 300,000 public sector jobs will be immediately slashed.

Across the huge range of people to be impacted, up to 120,000 National Health Service workers could lose their jobs, including nurses and doctors. It is the country’s greatest ‘austerity’ plan since the post-war era.

The Trade Union Congress (TUC) has more than 6 million members, almost the entire public sector, and is one of the largest trade unions currently at the forefront of anti-government protests.

General Secretary, Brendan Barber, claims that the cutbacks offend the basic British sense of fairness, reminiscent of the protests occurring during the 1990s.

He mentioned that the Tories will not be well received by workers who have already seen their salaries frozen and their workloads escalating as thousands are fired.

One particularly sensitive issue for Public Sector staff is that of the pension reform devised by the previous Labour government, in power between 1997 and 2010.

The controversial plan put forward by former Secretary of State for Work and Pensions, John Hutton, seeks to calculate retired workers’ pensions on the basis of their medium salary across their working lifetime.

As in France and Spain, the British government intends to incorporate changes to the minimum age of retirement, raising it from 60 to 65 years and eventually to 66 by 2020. They also wish to introduce greater contributions from workers to pension funds in order to reduce the State allowance.

According to the unions, these reforms, proposed by Hutton, will leave 6 million nurses, teachers and town workers in worse circumstances once they retire.

The TUC regards plans to increase the pension contributons made by public sector workers as a significant blow to their salaries, one which will spark protests similar to those recently seen in France.

Bob Crow, General Secretary for National Union of Rail, Maritime and Transport Workers, provided a succinct summary of what the executive proposals signified: “work more, pay more and receive less”.

“This attack on the people who make this country tick will spark a furious backlash and drive millions on to the streets in French-style protests to stop the great pensions robbery,” states Crow.

The National Pensioners’ Convention warned that the proposals could trigger future generations of poorly paid public sector workers who are condemned to poverty after retirement.

Newspapers, such as The Guardian and The Independent, have published a series of comments in response to the cutbacks. They seek to draw the government’s attention to those worst affected by the reforms who will not reap any benefits from them.

Left-wing Labour MP for Islington North Jeremy Corbyn claims that, “this is the time to mobilise, organise and defend the welfare state—to stand for a society based on the needs of everyone, not the needs of a few.”

Activists from the Right to Work campaign argue that if general strikes against the austerity measures can be organised in Greece, France and Spain, then they are a possibility in the UK too.

Considering the reality Britain faces, some analysts pose the question of whether or not it will be worth relying on savings in the future, given the current destruction of the welfare system and the rise of popular discontent throughout the country. PL

(Translated by Amy Crawley – amanda.crawley@my.westminster.ac.uk)

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