The Chancellor of the Exchequer, Rishi Sunak, last week announced his Spending Review. He was careful to spell out the extent of the economic damage caused by COVID-19 – though he did not mention that other countries, with different COVID strategies, had done far better.
And he used phrases like “economic emergency” to describe the state of government finances.
He then went on to set out various spending measures.
As he probably hoped, much of the media picked up on the economically illiterate scare stories about the state of government finances, and there was little scrutiny of his spending package. Hardly any indeed questioned whether he had spent enough.
But this is the question the media should have been asking.
He announced a pay freeze for around 2 million public servants. A pay freeze, of course, means a real-terms pay cut: their money will buy less after inflation next year than it bought this year. A real-terms pay cut for 2 million people is a substantial contribution to prolonging the mass impoverishment which has plagued the UK since 2010.
And he claimed to be protecting jobs and livelihoods. As the Metro reported,
“Mr Sunak announced the launch of a three-year ‘Restart’ programme, worth £2.9 billion. It aims to help more than a million unemployed people get back into work over the coming months and years.”
And on the face of it, this sounds like a lot of money. But let’s consider the facts. On the Chancellor’s own estimates, we are heading for unemployment around 2.6 million people. The number of vacancies in the UK is only around 434,000.
If his Restart package – which amounts to just under £1 billion per annum – is intended as a way of matching people to the vacancies, it is a reasonable amount of money: over £2,000 per vacancy.
But even if every vacancy were filled by this matching process, almost five in every six of the unemployed would still be unemployed.
If his restart package is intended to create jobs for 2.6 million unemployed, it is woefully inadequate: less than £400 per person.
What Sunak should be doing is what Franklin D Roosevelt did to end the Great Depression. What he is doing is much more like Andrew Mellon.
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2 comments so far
In one of your YouTube presentations you pointed out the influence that the press is under due to the support the owners of each newspaper want to give to the government and their policies. The Guardian remains independent. So, is the Guardian able to report more truthfully on such stories as you have outlined above, since they do not have the same compulsion to support? Is there any news outlet that can see through the deceptions – or are you alone in this?
And the thing that really bothers me, is why does so much of the long term policy of these market fundamentalists get into print which eventually can be viewed by the public? Why do they not just meet in secret and not document their decisions and ideas? It seems to me rather stupid that they should find it necessary to write everything down, when they are planning such a deeply injurious coup. Their cover could be blown if someone like you comes along.
Hi Robin,
The Guardian is more likely to give a balanced view but it’s not immune from influence. Advertisers spend a lot of money with the newspaper and it sometimes tones down its criticism. It is the most widely read paper with a degree of independence though.
Overturning the government narrative, however ill-founded it might be, is really difficult. Explaining macroeconomic reality is a tall order when journalists and politicians alike share an interest in promoting false ideas. The notion that the government can run out of money is widespread and held even by economists, who should know better! As the old adage goes, “if you’re explaining, you’re losing”, and this is the big problem. A biased media can easily distract from an involved argument using cheap one-liners, such as “maxing out the credit card”. Dumb ignorance often wins because you can sum it up more easily.