LEAP publishes 'Ready Reckoner' on Osborne’s economic strategy

Ahead of the Comprehensive Spending Review later this week, LEAP has published a dossier 'The Osborne Ready Reckoner' (free download) testing the statements the Chancellor of the Exchequer, George Osborne, made at the June Budget Statement.

The dossier highlights the flawed assertions, mistakes and u-turns contained within that statement and puts the arguments against the coalition government's economic strategy.


John McDonnell MP, LEAP Chair, said:

"In the short space of time George Osborne has been Chancellor he has already been proved wrong time and time again.

"Our community is now about to be devastated by four years of cuts in valuable public services with hundreds of thousands losing their jobs as a result of his faulty economic calculations and recklessly risky policies."

Fundamentally, the Osborne economic strategy is simply a Thatcherite ideology that wishes to ‘roll back the state’. Today the small government idea is the ‘Big Society’. This is not about strengthening society, but burdening it.

The same Party that tells us the Big Society will take on the role of the state in key areas, also tells us we are living in a ‘broken society’. The effect of the cuts planned on this scale would be, if implemented, to leave Britain with a legacy of a ‘broken government’ to match the Tories’ broken society.

Government revenues have fallen due to the recession – there are more people out of work claiming benefit and paying taxes, because there are fewer jobs. Today there are 2.5 million people unemployed and less than 500,000 vacancies.

The Tories have no strategy for job creation or economic growth – only for cutting spending down to the level of revenues from an underperforming economy. The only outcome of their pessimistic strategy is misery for millions of families.

This dossier puts the economic arguments against the Osborne strategy. Download here.

The Solution

Wouldn't it be easier for the people to dissolve the markets and elect another?

Gordon Nardell

After the uprising of the 17th June
The Secretary of the Writers Union
Had leaflets distributed in the Stalinallee
Stating that the people
Had forfeited the confidence of the government
And could win it back only
By redoubled efforts. Would it not be easier
In that case for the government
To dissolve the people
And elect another?

Bertold Brecht, The Solution, 1953

Brecht's acerbic irony came to mind after reading the umpteenth piece of right-wing post-Budget punditry justifying severe, long-term cuts in public spending and debt because otherwise – to paraphrase – governments will forfeit the confidence of the markets.

This nonsense turns democracy on its head. Decision-making by elected governments is in thrall to those same markets whose judgments have been palpably wrong for the last 20+ years: consistently marking up the value of equities, Sterling and USD on the myth of stable, unstoppable growth while the debt crisis quietly accumulated, followed by the abrupt volte-face of demanding deficit reductions that threaten to choke off such feeble recovery as some economies have managed since 2008. The analysis ought to be that the markets have forfeited the confidence of governments – and more importantly of the people who elect them. So: why can't the people dissolve the markets and – well, not necessary elect another, but replace them with democratic mechanisms for providing liquidity?

The economy, and the question of public sector deficits in particular, has been a near-taboo subject during most of the Labour leadership election so far. But when Andy Burnham broke cover recently, it was to say Labour shouldn’t be "in denial" about the need for deficit reductions. The logic of private markets infects all. The real point of this paper is this. The cuts agenda, now revealed as the price of solving a crisis in private markets, makes it no longer possible to avoid a simple choice of political position. We are either for an economic system based on the dominance of markets, or against it. And if we’re against it, then what we now need to provide is a carefully constructed, popular set of arguments in favour of something else.

Budget: Redistribution from poor to big business

The Coalition Government's concept of 'fairness' is obviously about fairness to their mates in business. Today's Emergency Budget will redistribute wealth from the poor to big business.

In response to the Chancellor's Emergency Budget today, John McDonnell MP, LEAP Chair, said:

"The budget is a significant redistribution of wealth from the poorest in our society to big business. Cuts in welfare benefits to children, pregnant women and the homeless are being used to fund cuts in corporation taxes for big business. Welcome to the Coalition's concept of 'fairness'

"People rightfully perceive a grotesque unfairness in that they are being forced to pay with cuts in their jobs and services for a crisis caused by the greed of the bankers. Cuts on this scale will inevitably be met by resistance from not just trade unions but from across our community".

The Budget announced a 4% cut in corporation tax from 28% to 24%, a higher threshold for employer NI contributions and employer NI exemptions for new businesses, and a cut in the small business rate of tax.

Meanwhile, £11bn of cuts are announced on welfare, benefits will only now be uprated in line with CPI not RPI, maternity grants are abolished, child benefit will be frozen for three years and public sector pay frozen for two years.