Economy fails as jobs go
WORKERS, JULY 2009 ISSUE
All the parliamentary parties support the free trade policies that underpinned Labour’s economic mirage, which has seen 1.3 million manufacturing jobs destroyed since 1997. In machine production, 30 per cent of the jobs have gone, and a £3.8 billion surplus in 1997 became a £17.4 billion deficit in 2007. In road vehicles, a £6.9 billion deficit worsened to £15.2 billion. In scientific and photographic equipment, a £0.9 billion surplus became a £0.5 billion deficit.
Officially, unemployment in April had risen to 2.26 million. The National Institute of Economic and Social Research forecasts that unemployment will carry on rising until 2011, to more than three million. Unemployment among 18-24-year-olds has risen to 16.6 per cent. In 1995, 20 per cent of this age group worked in manufacturing industry; by 2008, only 9 per cent.
The incomes of the poorest 20 per cent have fallen since 2005. In fact, wages have fallen more than we have ever seen. Only the rich have got richer. An economist with BNP Paribas said, “we will continue to lose jobs and we will continue to see downward pressure on wages.”
Gordon Brown told us in June 2007 that deregulating Britain’s banks would bring “the beginning of a new golden age”. The same month, he told the City that growth was “expected to be stronger this year than last and stronger next year than this. We will succeed if like London we think globally … advance with light-touch regulation, a competitive tax environment and flexibility.”
After the financial crisis, the government bought the banks’ debts as dearly as possible, so as not to penalise them, running up huge debts and printing money, to save the banks, whatever the cost to the economy. Worldwide, there are $10 trillion worth of toxic loans, only $1 trillion of which has been written off so far. Their own banking system can no longer work.
Brown has buried the Cruickshank report urging curbs on profiteering. He sank a plan to encourage new investment in industry. He has saved the tax havens and the shadow banking system. He has fended off demands to regulate the derivatives market and to stop banks gambling our money away in the stock market. He opposes even a 0.005 per cent tax on the $1000 trillion annual trade in foreign currencies.
Now the Financial Reporting Council proposes to end audits for banks’ subsidiaries, even though it was Northern Rock’s subsidiary Granite that sank the Rock, when it held the lethal liabilities in £49 billion of mortgages that the Rock sold and moved offshore to Jersey.