The economic impact of the Coronavirus crisis – Birmingham TUC Zoom meeting Thur 4 June 7pm

with Michael Roberts, Marxist economist

and a Birmingham NEU rep on the NEU trade union response to the 1st June opening of Birmingham schools

 Zoom ID 895 9289 1353 no password

As a result of the Coronavirus crisis the Office for Budget Responsibility (the official government financial forecasting body) has predicted a deficit for the 2020/2021 tax year of £273 billion.

A Treasury medium-term forecast in a leaked Treasury document (published in the Daily Telegraph 13.5.20.) was a £337 billion deficit. Its best case scenario was a £209 billion deficit. The deficit in 2009/10 (which provoked a decade of austerity, pay freezes and public expenditure cuts) was only £154 billion!

The internal Treasury document had three main proposals for the Tory government to balance the books: “an increase in income tax, the end of the triple-lock on state pensions increases and a two-year public sector freeze.”

The Tory dominated Coalition government in 2011 implemented a two year pay freeze leading to a 10% real fall in the real wage level for teachers, nurses and other public sector workers over the period 2009-2018.

Michael Roberts’ introduction to his talk is below:

Coming out of the pandemic – the task for the labour movement

The COVID-19 pandemic has led to thousands of extra deaths in the UK and elsewhere.  Because health systems were run down and inadequately resourced, most governments were forced into lockdowns of the economy in varying degrees to contain the virus. This has led to the collapse of production, investment and employment across most major economies.  In the case of Britain, it is the largest drop in economic activity for 300 years!

Workers have been sent home, sacked or furloughed.  The damage is most felt by those in key necessary jobs and among the lower paid.  While professionals and others can work at home, millions of others must go to workplaces and travel to do their jobs, putting themselves at risk of infection.

The government has announced a series of spending programmes to provide incomes for those out of work or furloughed.  The Bank of England has printed money for banks to lend to small and large businesses to tide them over.  But these measures will run out by the end of the summer. Most worrying, millions of workers may find that there are no jobs for them to come back to as their employers make them redundant or go bust.  Many other companies are preparing to reduce the hours of work and demand pay cuts. The TUC has called for jobs to be protected and is promoting a jobs guarantee for at least six months, particularly for young workers who will be the first to lose their jobs.  Colleges remain closed for those who need to study for qualifications and apprenticeships.

Despite the emergency measures, millions can be expected to take significant hit to their income and employment for years to come.  At the same time, the British government is running up a huge bill with the annual budget deficit set to triple this year and next.  The public debt will rocket to levels not seen since the end of WW2, as large and small companies demand bailout funds. Once the pandemic is contained and the lockdowns are ended, we shall not return to normal.  Moreover, the Conservative government is very likely to want to re-introduce the policies of austerity that workers experienced after the end of the Great Recession ten years ago.  There are plans for tax rises, cuts in spending on public services and a new public sector pay freeze -despite the courageous efforts of health and other essential workers during the pandemic.  Companies too will be demanding that workers accept poorer work conditions to ‘make ends meet’.

How should the labour movement react to this likely new attack on incomes, jobs and public services?  Michael Roberts, former City economist and long supporter of the labour movement, will discuss how the labour movement must prepare to defend working class livelihoods when the pandemic is over.

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