Tag Archives: Alternatives

2012: The Year Austerity Economics Started To Unravel

In 2012, austerity economics produced a double dip recession with zero growth across the whole year. Mass unemployment continued, real wages shrank and benefits were cut. Crucially, our budget deficit started to rise. Across Europe, economies continued to struggle, with Greece and Spain now looking to be trapped in a depressionary cycle that has produced 50% youth unemployment. Continued austerity measures across Southern Europe will only make these problems worse.

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Alternatives: Quantitative Easing For The People

This is a post in our series on our suggestions for alternatives to cuts and austerity.
In this post we explain Professor Steve Keen‘s idea – Quantitative Easing for the People.

We all know that over the past 3 years, the Bank of England has printed lots of money to give to the banks, in exchange for their bad debts – £375bn in fact. This money was supposed to stimulate the economy – to shore up the bank’s reserves so that they would lend to business and help to drive the economy forward. In fact very little of that money has found its way into the economy as there is already too much private debt and little willingness to either lend or borrow more money. Quantitative easing (QE) has in fact only helped the richest 10% of people, who have gained an average of £322,000 in value of their assets as a result of QE.
With the economy continuing to stutter, and inflation slowing down (although still rising faster than wages), there is talk of more QE, perhaps another £50bn like in July.

Instead of quantitative easing for the banks, Prof. Keen says we should give it to the people instead – in the form of a debt jubilee, a move he has called “Quantitative Easing for the People”

Skip to 4:07 to hear Prof. Steve Keen talk about his idea of a debt jubilee:

So instead of handing money to the banks, where it will sit in reserves and benefit the richest, this money would be given to everyone. If we assume for the sake of simple maths that there are 50 million adults in the UK (which is probably about right, but I’ve not been able to find an accurate number for this, sure it must be available from the 2011 census somewhere), that would mean £1,000 each in the event of a further £50bn QE being created by the Bank of England.

That money would have to be used to pay off debts, and any money left over people would be free to spend as they wish. That would mean anyone in debt would pay some or all of their debt off, and have a reduction in their outgoings, leaving them with more disposable income each month, whilst people without debt would see a cash bonus that would probably be spent, directly increasing demand in the economy.

Prof. Keen says The broad effects of a Modern Jubilee would be:

  • Debtors would have their debt level reduced;
  • Non-debtors would receive a cash injection;
  • The value of bank assets would remain constant, but the distribution would alter with debt instruments declining in value and cash assets rising;
  • Bank income would fall, since debt is an income-earning asset for a bank while cash reserves are not;
  • The income flows to asset-backed securities would fall, since a substantial proportion of the debt backing such securities would be paid off; and
  • Members of the public (both individuals and corporations) who owned asset-backed securities would have increased cash holdings out of which they could spend in lieu of the income stream from ABS’s on which they were previously dependent.

To read more about this plan, click here and scroll down to the section titled “modern jubilee”

So as the Bank of England talk of more QE for the banks, you should be calling instead for QE for the people. £1,000 for everyone to pay down debt or spend if they are debt free. Money into the economy instead of the bank’s vaults, leading to increased aggregate demand which will give confidence to the private sector, creating jobs and growth.

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Alternatives: Investment in Zero-Carbon Infrastructure and Technology – Getting Birmingham Back to Work

This is the latest post in our series exploring alternatives to cuts and austerity. Rob Marsden from Socialist Resistance explains how Birmingham City Council could look to invest in our local economy, and uses Ten Point Plan created by Birmingham Friends of the Earth as an example of this. This would act as a mechanism for investment in our economy, producing jobs and building confidence in the private sector that will create further investment. As with any structural investment, we should always be looking to achieve other policy aims and improvements rather than just undertaking major works, and here we see an opportunity to put people – as communities, workers / producers, trades unionists, activists and interest groups at the heart of shaping the future – in contrast to the current council’s business led agenda as evidenced in the current make up of the Birmingham City Council Green Commisssion.

The commission, headed by Councillor James McKay, includes representatives of business – Amey and British Gas – academics and the environmental think-tank Green Alliance as well as, we are pleased to note, Northfield Eco-centre. However, there are some glaring omissions.

No representatives of the trades unions representing the interests, knowledge and expertise of the hundreds of thousands of working people in the city. Unions such as the Communication Workers Union (CWU), the Public and Commercial Services Union (PCS) and the University and College Union (UCU) have been centrally involved in the Million Climate Jobs campaign They should have representation on this commission to balance the over-representation of business interests.

No representatives of environmental campaigns, in particular the key activist grouping Friends of the Earth. Birmingham FoE has already produced a set of policies for the city – we reprint their Ten Point Plan for a Better Birmingham below. Surely the Commission would benefit from their input?

And no representation of local communities. The Council is committed to more devolution and more local empowerment – why doesn’t it put it into practice by involving local communities in the Commission? We note that the Council’s Districts and Public Engagement O&S Committee has just launched an inquiry into ‘Devolution: Making it Real’ and they are inviting participation from trade unions and citizens – why doesn’t the Green Commission do likewise?

The Green Commission hasn’t yet published its schedule of work, but we would argue that it should include- before it draws up its findings – a series of public forums and/or a major public conference to take on board local views- not as a tokenistic ‘consultation’ exercise but in order to fully engage with the people of Birmingham.

What would a Green Birmingham mean?

Cllr James McKay is absolutely correct to say “we need a clear plan and carbon and energy road map if we are to drive that progress forward at the pace we need to.” However, if it is to really achieve significant reductions in carbon emissions, this road map will have to be one with far fewer cars on it than at present! Transport (accounting for approximately a quarter of carbon emissions), along with housing, energy efficiency and greater use of renewable sources, must be at the heart of the plan.

There needs to be a huge expansion in heavily subsidised, public transport linking all parts of the city- a carrot rather than a stick to reduce car use to a bare minimum. Clearly, bus deregulation has failed to deliver and the council should use its powers to the full extent to restore a publicly owned and funded service. This should go hand in hand with measures to pedestrianise more of the city, reduce speed limits in residential areas and make our roads much more cycle-friendly.

Domestic housing is the single biggest contributor to greenhouse gas emissions in Britain yet the energy saving and insulation techniques to remedy this exist right now.

The city council has already announced ambitious plans to increase the numbers of houses built in the city of the next few years. We welcome this and intend to hold them to their promise, but we would go further and insist that all new housing developments be built to the highest possible standards of energy efficiency and utilizing only the most eco-friendly construction materials available.

However, the council must also draw up plans to properly insulate the entire stock of both private and social housing in the city. This cannot be left to the private sector. Council direct works departments must be expanded to recruit and train an army of bricklayers, glaziers, carpenters and electricians to take on this urgent task.

Finally, the council needs to set itself the short term goal of moving to 100% renewable energy. A city which prides itself on the creation of its own electric, gas and water supply utilities under Joseph Chamberlain in the late 19th century should show similar vision in investing in projects to generate its own electricity from wind, solar and geo-thermal sources.

Renewable energy is far more labour intensive per kilowatt hour than either fossil fuels or nuclear power so the transition to a sustainable, zero-carbon future would mean a net gain in high quality, skilled jobs. Let’s put thousands of former workers in the car and engineering industries back to work and also start to transfer the scientific, technical and engineering skills from industries such as aerospace and power generation to develop the green technologies of the future.

Birmingham Friends of the Earth – our ten-point plan for a better Birmingham

1. Plan to phase out the burning of rubbish as a fuel – make Birmingham a ‘no incineration’ city with a zero carbon waste system and clean air.

2. Create jobs by re-using or recycling waste items and working with social enterprises to help them develop locally relevant projects.

3. Street bins will have sections for recyclable items.

4. Aim to get 5% of journeys within the city made by bicycle in the next 4 years by prioritising safety on the roads through 20 mph speed limits and creating safe cycling corridors. Also, aim to massively increase the number of school journeys made by walking or cycling by resourcing “walking buses” or “bike trains”.

5. Plan a bus system for the 21st century, so people have a real alternative to the car – this would include better stops with cycle facilities, better interchange between different bus routes and bus and other modes, clear mapping of bus routes and interchanges, better frequency, dedicated lanes and smart ticketing.

6. Energy conservation should be made the major priority, especially on council-owned buildings, as it is deliverable much more quickly and the returns on investment are higher than any other measure.

7. Birmingham Energy Savers should be expanded in a way that maximises the potential for local job creation, the development of local manufacturing, training up young people and dealing with the most acute cases of fuel poverty first.

8. Local procurement should be a major part of the council’s strategy to create jobs and also drive sustainable practices amongst local companies by building in expectations on environmental standards to contracts.

9. Spaces for growing food should be an integral part of every neighbourhood and access to these spaces a right of every citizen. This should be part of local planning policy on new developments.

10. Recognition of the importance of Green Infrastructure (parks, trees and green spaces) needs to be core to planning every area of the city because of the benefits it provides.

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Report and Recording from our Meeting about Social Housing

On Monday, we held our meeting with Tom Holness speaking about the case for a new generation of social housing, how this would provide an affordable and – in the medium to long term – profitable investment and why this policy should form part of our alternatives to the cuts. Godfrey Webster then outlined Labour’s plans for Birmingham, and we had a wide ranging discussion about housing in Birmingham, about how many empty properties there are and the difficulties that have been experienced in the past when attempts have been made to bring them back into use, about the potential problems with housing in Birmingham following housing benefit cuts and with anticipation of increasing demand and about how we can push this issue to ensure that decent affordable housing is available for everyone who needs it.

You can listen to the meeting below, or if you prefer to read, Tom has previously posted about social housing and this is more or less what he said at the meeting. Unfortunately, we don’t have the time or skills to transcribe the audio, but if anyone out there does and would like to do it for us, that would be great.

Our next meeting will be held on Monday 10th September (please note, no meeting in August as people are usually away), and Linda Burnip from DPAC will be talking about the cuts to welfare and it’s effects on disabled people.
6:30pm, Unison Offices, 19th Floor McClaren Tower, Priory Queensway, B4 7LR.
Unison offices are wheelchair accessible with accessible toilets. Children are welcome but we cannot provide creche facilities. If you have any questions or accessibility needs please email us at BirminghamAgainstTheCuts@Gmail.com

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Why We Need a New Generation of Social Housing, and How We Achieve That – Public Meeting

On Monday 9th July at 6:30pm we will be holding a meeting with speakers and discussion looking at housing benefit cuts, the case for investment in council housing and Labour’s plans for Birmingham.
This will be held at the Unison Offices, 19th Floor McClaren Tower, Priory Queensway, B4 7LR. This is wheelchair accessible with accessible toilets, and children are welcome though we cannot provide a creche facility. If you have any accessibility requirements please contact us at BirminghamAgainstTheCuts@Gmail.com

Tom from Birmingham against the cuts will be talking about how a new generation of social housing provides and alternative to the cuts and to cuts in housing benefit, which threatens to make thousands homeless in Birmingham and hundreds of thousands homeless around the UK.
We will also be talking about the new Labour council’s plans for Birmingham housing. Labour have said that Birmingham needs 70,000 new houses by 2026, but have not said how this will happen.

This will be followed by around 30 minutes of discussion about the issue and what we can do about it.

After this there will be around 45 minutes for organisational and planning discussion about anti-cuts activities in Birmingham.

Please come along to this meeting, especially if you are concerned about cuts to housing benefit or the introduction of universal credit.

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As Austerity Drives Us Back To Recession, The Rich Get Richer – For a Future That Works – Mass Demonstration London 20th October

UPDATE: Free coaches are available from Birmingham for unwaged and low paid people, and there are spaces available on union coaches for ununionised people. Click here for details.

Does austerity work? It would appear that if you are already very rich, it does. The Sunday Times rich list for 2012 it shows that last year, the richest 1,000 people got richer, taking their wealth to a record £414bn. In the past 3 years this tiny group of people have amassed an additional £155bn in wealth – enough to cover the annual deficit with some £30bn to spare. In Birmingham, the Birmingham Post does a local rich list of 50 people, and the 2012 list also showed them getting richer – by £3.37bn in the past year alone..

Meanwhile, austerity has put the economy back into recession, public sector pay has been frozen and overall average pay rose by just 1.4% – a real terms pay cut with inflation running between 3%-5%. Unemployment has increased, and workfare is supplying this pool of labour to companies for free. Ever rising fuel and food prices are hitting hard, not helped by rises in VAT. Meanwhile, the richest 1% – those earning over £150,000 a year – see their tax rate fall.

Pregnant women in Birmingham are getting their meals from foodbanks, and across the country hundreds of thousands depend on charity for food. People with disabilities are having benefits cut and withdrawn, and housing benefit caps are going to force hard working families with low incomes to leave their homes and community – not just in London, as a recent report highlights Birmingham as somewhere that is expected to have problems with homelessness following the implementation of the Local Housing Allowance (LHA) that will replace housing benefit. The government is criminalising squatting of empty, unused residential buldings, creating a new group of criminals amongst this vulnerable group.

Our schools are being portioned off as academies to for-profit education firms; our NHS is being handed to Virgin and Serco piece by piece; fraudsters A4e and killers ATOS rake in the profits by failing to help benefit claimants; G4S, responsible for deaths in custody, are in line to take over policing duties. How long before Blackwater are being contracted in to run our armed forces?

We have a cabinet of millionaires, who have no understanding of what living on an average wage means, let alone on minimum wage or benefits. They do not know the price of milk, or when they last had a pasty. They have no connection to anything other than the world of the 1%, the group of people who are doing rather nicely right now. Bankers and lawyers, the sons and daughters of bankers and lawyers. Is it any surprise that they think austerity is working?

We need a future that works, an alternative to austerity and ultimately the demands for growth and consumption of capitalism that is environmentally unsustainable. We need to invest time and money now in creating a zero-carbon future, and housing and living environments suitable for a post-oil world.

It is clear this government is failing to deliver economic recovery, and are only calling for more of the same set of failed policies that have driven Greece, Spain, Ireland, Portugal and Italy to depression and the Euro to the brink of collapse. It is up to us to demand change – and we cannot wait for the next election in 2015 and the hope that Labour policy evolves into a true alternative to cuts.

(c) Geoff Dexter Sherbourne PublicationsThe TUC have called a mass demonstration in London, on Saturday 20th October. Trade Unions are organising coaches from Birmingham and we will be seeking pledges from them to provide spaces for benefit claimants, pensioners & unionised workers and to ensure that coaches are booked with wheelchair spaces. As details of coaches are confirmed, we’ll collect them here.

You can find out more about the demonstration on the TUC Website dedicated to it: AFutureThatWorks.org

Two weeks before that, the Tories are in town for their conference and there is a demonstration on Sunday 7th October.

In March last year over 500,000 people took to the streets to demonstrate against cuts, long before the effect had begun to be felt. In November, 2 million went on strike around the UK. By October we could see unemployment topping 3 million and a full year of recession, pay freezes and price rises continuing to squeeze everyone’s household budgets.
The work to make October the biggest month of demonstrations and resistance to austerity begins now. If you are in a trade union, start putting motions to your branch asking them to book coaches. Start asking friends if they are going. Print off an A4 poster for the Birmingham demo and stick it up in your workplace, local shop or window. Read about the alternatives and why austerity won’t work.

Only through mass action, on the streets, in our workplaces, job centres and public services, can we change the course of this government.

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Alternatives: Scrap Trident Nuclear Weapons

This post is part of our series exploring the alternatives to cuts and austerity. We already posted about how money spent on war could be spent on welfare, and now will examine one specific proposal – scrapping trident and trident replacement.

This week, the first of £3bn of contracts was awarded – £350m to start the design of new nuclear submarines to replace the current ones when Trident is taken out of service in 2028. The full cost of building the submarines is expected to be £25bn, with an additional £4bn-£6bn for the nuclear warheads and infrastructure costs. (PDF, page 9)
There would then be an annual expenditure of at least the £2bn per year that Trident costs us now.

Aside from the cost, there are other reasons to get rid of Trident nuclear missiles:

They make us less secure and safe
Senior British military figures have declared that nuclear weapons are completely useless as a deterrent to the threats and scale of violence we currently face or are likely to face, particularly international terrorism.
• There is no threat to our security from any other nuclear weapon state according to the Ministry of Defence (MoD). Instead it identifies the main threats to our security as coming from terrorism, cyber-attacks and major accidents (all of which nuclear weapons can never be useful against).
• Yet by having nuclear weapons the UK continues to encourage others to develop them too. If we say we need nuclear weapons for our security then any other country in the world can say the same, particularly those that are more vulnerable or threatened.

The UK agreed to begin disarming in 1970
• The UK signed a legally binding international treaty many decades ago (the nuclear Non-Proliferation Treaty which entered into force over 40 years ago) agreeing us to negotiate in good faith the goal of general and complete nuclear weapons disarmament.

It is illegal to use or threaten to use nuclear weapons
• The International Court of Justice in 1996 judged it generally illegal to use or threaten to use nuclear weapons.

So what does that money represent? Well £350m is similar to the amount that is being cut from the annual budget at Birmingham City Council. This cut has come at the cost of over 6,000 jobs, pay cuts and changes to conditions and the closure or cutback of council services.
The £2bn annual cost of trident is the same as is being cut from the Ministry of Justice, where 15,000 public sector workers are expected to be made redundant, and many courts and court services will close.

CND have an excellent interactive site to help show what is being cut in order to keep trident.

Clearly there would be some jobs lost both in the military and in the areas that the arms companies that will build the submarines exist, and money saved from scrapping trident should rightly be spent in these places, to ensure that any communities dependent on these businesses do not suffer disproportionately. Programmes around house building or creating climate jobs and businesses would be suitable replacements.

Between now and 2016, the government will spend £3bn, before even deciding that they will definitely replace Trident. At a cost of around £800m each year, that decision should be made now – scrap Trident replacement, invest the money in our economy and communities.

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