The Radical Alternative to Austerity

John McDonnell

This post is to help circulate John McDonnell’s recent article. John McDonnell can be found here.

The Radical Alternative to Austerity. 

The austerity programme of the Coalition government is not just failing; it is prolonging and deepening the recession. Cuts in investment in public services, in jobs, wages, pensions and benefits are creating mass unemployment and mounting hardship.

Austerity is creating a spiral of economic decline as cuts produce high levels of unemployment which in turn reduces tax income and prompts another round of cuts and job losses.

The Government’s austerity measures are also unfair as the only people the Government seems intent on protecting from the recession are the rich.

There is an alternative to austerity.

There is no lack of wealth and resources in our country that we can draw upon to tackle this recession. The problem is that this wealth and these resources are held in the hands of too few people and are not being used productively to create the growth and jobs we need.

If we can release these resources, we can overcome the current recession and start to build a prosperous future for our country, linking with others across Europe and the United States to overcome this global economic gridlock.

Releasing the resources within our own country is not difficult.

It simply requires the introduction of a limited range of redistributive measures which will raise the funds we need from those most able to pay and who have profited most out of the boom years.

This redistribution can be achieved through;

a wealth tax on the richest 10%,

a Robin Hood tax on financial transactions,

a Land Value tax,

the restoration of progressive income tax of 60% on incomes above £100,000

and a clamp down on the tax evasion and avoidance that is costing us £95 billion a year.

Investing the resources released can halt the spiral of decline.

With unemployment rising month by month we urgently need to get people back to work and earning a decent living.

We can do this by investing the resources we have released through taxation in modernising our economy, its infrastructure and our public services to meet the needs of our community.

Instead of cutting and privatising our health, education and local services, this means:

Investing in a mass public housing building and renovation programme, in universal childcare, in the modernisation of our public services, in the NHS, in creating a national Caring Service, in our schools and colleges, in our transport infrastructure and in the extension of broadband.

Investing in alternative energy, combined heat and power and insulation to both tackle climate change and create one million climate change jobs.

Establishing a national investment bank with the resources levied from the banks so that there is no shortage of funds to lend for manufacturing growth and research and development.

To be successful the recovery programme has to be fair.

We will need the support of a significant majority of our people if we are to drive through this type of radical regeneration and redistribution programme.

To gain this level of support means the Radical Alternative must be seen to be fair. This means addressing many of the inequalities of our current system.

For those at the top it means ending the bonuses and limiting high salaries to no more than 20 times the lowest paid in any company or organisation.

For all others it means replacing the minimum wage with a living wage and a living pension and living welfare benefits, reducing the working week to 35 hours, closing the gender pay gap, controlling rents and energy prices, and restoring rights at work.

For young people it means a guaranteed job, apprenticeship, training or college place for every young person with the burden of fees abolished.

There is no shortage of resources to implement this programme of reform.

The problem is the distribution of these resources.

The Radical Alternative simply releases the resources we have to regain control of our economy and invest in our future.

Never again can we let them say that there is no alternative.

  • Anonymous

    Trouble with a Robin Hood Tax is that the EU has looked into it and their report concluded it would reduce the economy and the net effect on tax revenue would be to reduce total tax take, the effect being mostly on the UK treasury.

    Trouble with the wealth tax is that wealth, rather than income is based on valuations (such as share prices) which would fall if every year part of the assets had to be liquidated to turn them into cash to pay a tax. Therefore a wealth tax would either be so low (as not to depress asset prices) that it wouldn’t raise much, or it if it were high the spiral decline in asset prices it would bring would reduce the tax take.

    Trouble with tax evasion is that the HMRC has released figures to show that the actual tax gap (rather than Tax Research UK’s dodgy figures everyone on the left quotes), when taking into account late payments and irrecoverable amounts due to insolvency is tiny, less than 0.1% tax collected.

    Basically there is no easy pot of gold to tap that means we can wake up from the nightmare of Austerity. The only way we can get large amounts of money is broad based taxation on Joe Average, increased borrowing or printing money. None are attractive right now.

  • George White

    In Greece, the leader of the left-wing Syriza Party Alexis Tsipras said he would scrap the country’s bailout terms if he leads the next government, speaking at his main camapign speech at Omonia Square in Athens. Elections are this Sunday.http://www.youtube.com/watch?v=u5hIuHfbwv8&feature=plcp 

  • Athensnewsweb

    In Greece, the leader of the left-wing Syriza Party Alexis Tsipras said he would scrap the country’s bailout terms if he leads the next government, speaking at his main camapign speech at Omonia Square in Athens. Elections are this Sunday.http://www.youtube.com/watch?v=u5hIuHfbwv8&feature=plcp 

    • Anonymous

       Hmmm, given the similarity of these two posts looks to me like LabourHome is getting spammed again.

  • Davideeinkl

    John,

    I know your talking shit.  You and I both know full well that if we get another Labour government it will be business as usually, the super rich will get richer and everyone else will get shat on.

    You see, I know this because I know what a Labour government looks like in practice, because I remember the last one.

    All your words in opposition are just hot air, we remember what a Labour government looks like in practice. It is exactly the same as a Tory/Lib Dem one.

  • Mr Miliband out now

    Give me strength! The leadership of the Labour Party is pathetic. Miliband and Balls can’t articulate a decent response to the Tories. Here we are with the cuts devastating peoples lives on lower incomes/benefits and we get the robotic responses from Miliband and Balls. Miliband hasn’t got a hope in hell of defeating the tories in the next election. When the right wing press get there teeth into him he will chewed up and spat out. The complacency of this labour leadership is astonishing. They are not fit to lead this party. Triple dip recession and they both treat is as a debate. We must get them out now.

  • Peter Martin

    Yes all these things are worth doing but Labour needs to get a better understanding of basic economics too. Ed needs to explain why government surpluses are not necessarily a good thing. Google Modern Monetary Theory for a full explanation. Meanwhileyou may want to start with this: