Ditch austerity and try another route

Two letters from The Guardian on 17/02/12:


As the Greek public order minister says his people "can't take any more", it's timely that Simon Jenkins (Austerity fails, yet we're too shy to think outside the box, 15 February) says the failure to take economic management beyond the diktats of austerity has become the great intellectual treason of today.

It is not just in Greece that austerity is failing but in the UK, too. George Osborne's emergency budget was supposed to bring Britain back from the brink but has, instead, pushed us closer to the precipice. Where he predicted growth of 2.3% last year, we got 0.3% – less than in the US, Germany, France, and even Italy where their leader's economic incompetence got him deposed.

This failure to generate growth – which Osborne pledged to create by cutting the public sector, which he said had been "crowding out" the private sector – means his government is borrowing billions more than planned, necessitating further cuts. Unemployment is the highest for a generation, with youth unemployment the highest ever on record.

The alternative required is the exact opposite of austerity; it is investing for growth, creating jobs to get people working again, and raising wages and benefits to create demand. We have distributed over 250,000 copies of our "There is an alternative" pamphlet, explaining how this would work. Even the modest stimulus in the US has meant falling unemployment and higher growth. Mr Osborne should at least aspire to that, rather than following Greece into a death spiral.

Mark Serwotka
General secretary, Public and Commercial Services Union


• Simon Jenkins rightly wails that "thousands of citizens across Europe are having their lives ruined ... because a financial elite, once burned, is too shy to think out of its box". Fair enough, but maybe part of the problem is that the Guardian, like most of the media elite, is itself too shy to publish outside the box. With the unemployment trajectory on course this week for 3 million by the end of the year, it is remarkable that the renowned policy analyst Peter Taylor-Gooby was not even mentioned when he recently published his research study linking the potential for civil disorder and riots to the legitimacy of the austerity measures taken by western governments over two decades and suggesting that without change further unrest will follow.

Similarly, when tackling the economic deficit Greg Philo offers a radical proposal of a wealth tax of 20% on the assets of the richest 10%, but his work never gets beyond the Guardian's website. There's a comforting staleness in reading the same old establishment faces in the Guardian and watching them on Question Time or the Politics Show. Exceptions apart, to have a Guardian journalist decry others for a lack of radical thinking when the paper has been a fervent advocate of the timidity of British politics is a bit rich.

John McDonnell MP
Hayes and Harlington

Unemployment: the tragedy continues, as does Osborne

Today the ONS revealed that there has been a big rise in unemployment over the last three months. The jobless rate rose to 7.9%, meaning there are now 2.49 million people without work.



According to the BBC and a Press Association newswire this was a "surprise", with most economists apparently believing unemployment would fall. Quite why this should have been the case is not clear. Then again these same 'expert' economists also thought the economy would grow by around 2.3% this year, and the 2008 crash came as a surprise to them. You might as well ask your cat!



While 2.49 million people are unemployed, there are another 1.26m working part-time who are looking for full-time work, which means there are 3.75 million looking for work. Compounding this misery is the news that the number of vacancies has fallen again to just 449,000.



Tragically, 409,000 people have now been unemployed for over 2 years. Welfare cuts and more conditionality cannot possibly work when there are no jobs (and there's no evidence they do even when there are). Training opportunities are also being cut.



Youth unemployment rose to 20.2%, up 15,000 to 949,000. Male youth unemployment makes particularly grim reading: 40.8% of 16-17 year olds + 19.9% of 18-24 year olds. Of course the persistent and unprecedentedly high youth unemployment levels are entirely coincidental to the recent riots that swept London and spread to many other UK towns and cities.



Economic growth is stagnant, inflation is rising, unemployment is up, real wages are falling, and more cuts are promised. Osborne's policies are "sheer criminality, pure and simple".



The PCS union is right to highlight the idiocy of closing jobcentres at time of rising unemployment. That policy has a rival for most stupid of the day in enterprise zones, which will apparently solve everything (Cameron told the press today that they will be "trailblazers for growth, jobs and prosperity throughout the country"). Yet they are only projected to create 30,000 jobs over four years, when unemployment is nearly 2,500,000 and rose by 38,000 in the last 3 months alone.



Instead, the clue to recovery lies in revealing where the biggest slump in employment has been: the worst hit public sector employment sector has been construction, down 8.5% over the last year. This has happened due to the massive capital spending cuts made centrally and enforced upon local councils. The solution to this malady must be to invest in infrastructure: renewable energy, public transport and council housing - which would create jobs and help to solve the environmental and housing crises that we also face.



Osborne though seems set on more of the same failed hard right dogma: tax cuts, spending cuts and more privatisation. It will fail and the misery will continue for the swelling ranks of the unemployed.