Belfast Telegraph

Thursday 30 October 2014

Join us and strike a blow against City's dominance

Re-balancing the economy is vital, but the public sector isn't the enemy. Try 'Big Finance', says Mark Langhammer

On the eve of the first major strike in a generation, trade unions are pilloried for the narrow defence of public sector interests. Were that true, it'd fail.

It is a measure of the presentational skills of David Cameron that the collapse in revenues since the 2008 crash has been deftly used as an opportunity to shrink the state.

But the public-versus-private dichotomy is false. The truth is good public services are essential for private sector innovation and growth.

Tomorrow's strike is not merely a rejection of counter-productive austerity. It's about creating a better, fairer way. It's not just about 'our' jobs, but about investing in new, productive, useful private jobs.

Austerity disproportionately affects regions like Northern Ireland, the North East and Merseyside precisely because our private sector manufacturing has collapsed.

The public sector is not 'crowding out' the private sector. The private sector is simply too small - too often creating low-skilled, service-orientated 'McJobs'.

Austerity cuts on public infrastructure has crippled our private construction sector. That's why mere redistribution between the private and public sectors is inconsistent with growing the economy.

Our public majority shareholding in banks should enable us to direct investment - using the current cheap money environment - to tackle over-reliance on the socially useless 'Big Finance' and invest in armies of jobs producing green energy technologies. The Green New Deal is where we should be at.

Re-balancing the economy is vital, but the issue is not private-versus-public. An economy over-dependent on the City and its web of tax havenry has been disastrous for our regions. All political parties cling to the imperial Square Mile project as the 'goose that lays the golden eggs'. Not for the regions, it doesn't.

The UK has a profoundly dysfunctional financial system - yet timid banking reform can wait luxuriously until 2019. Bank nationalisation has socialised vast losses, privatised obscene gains and choked investment in real businesses.

Stephen Hester, Royal Bank of Scotland's chief executive, is effectively the highest-paid UK public servant, with an annual package of some £9.6m. Amid savage welfare cuts, this sort of banker welfare has to cease - period.

Which brings us to the biggest elephant in the room - tax fairness. Total cuts across this five-year Parliament are projected at £130bn. This is overshadowed by the annual tax-gap of £123bn, made up of £70bn in tax avoidance, £25bn in tax evasion and £28bn in uncollected tax. Here is the real black hole, facilitated by 'Big Finance', without which there would be no need for any austerity measures.

Collecting tax - whether ducked or evaded by a super-wealthy elite - will kick-start growth. Instead of laying off 12,000 staff at HMRC, an additional 20,000 tax collectors would transform the UK's financial position.

The coalition Government has used the 'Tina' (There Is No Alternative) argument for austerity. Ordinary workers at tomorrow's rally argue that there is an alternative.

Collect the taxes, invest in people; civilise banking, de-financialise the economy and invest, instead, in socially useful jobs in the Green New Deal, paying down the deficit from a position of secure growth.

The Irish Congress of Trade Unions is not defending public against private, but promoting the futures of the many over the sectional interests of the few. It's the shape of things to come - and it's time to pick a side.

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