Shifting the problem
The data supports McDonnell’s claim:
- The number of English secondary schools in deficit has almost trebled in three years.
- 61% of acute hospital service providers finished the 2016/17 year in deficit.
- Of 150 councils, the average deficit is £14.7m.
Last year households spent on average £900 more than they earned, with the poorest households spending the most relative to their income. As a result British households are more indebted than those in the US, France, Germany, Italy or Japan, with unsecured debt at over £300 billion.
The deficit con
It’s worth noting that the very idea that we need to cut our way to prosperity is a demonstrable con. When Clement Attlee’s post-war Labour government founded the NHS and built over a million new homes – 80% of which were social housing – public debt was at 225% of GDP. It is currently at around 85% of GDP, showing that public debt levels are not a constant on public investment.
In fact, it’s the opposite. Calculated public investment actually helps reduce public debt. Between 1945 and 1980, public debt actually fell from 225% to 45% of GDP. The post-war creation of the welfare state cost money in the short-term, but brought returns in the long term. One reason why is that a welfare state redistributes money to the working and lower-middle classes, meaning there’s a huge increase in demand for services and products.
That investment can generate income for the public purse is also reflected in nations that, unlike the UK, have not dramatically shrunk the public sector since the 1980s. Relatively progressive Scandinavian governments – Sweden, Denmark, and Norway – were running budget surpluses before the 2009 crash, not after cuts, but on the back of a robust public sector and welfare system.
Now people are turning against cuts, Theresa May has ‘announced’ that austerity is over, but only in rhetoric. McDonnell is quite right to point out that the ruling government has only shifted the deficit onto struggling public services. The Conservatives’ whole dog and pony show amounts to a scam to serve their real constituency: the rich and powerful.
– Keep writing to your MP to express any discontent.
– Support The Canary so we can keep holding the government to account.
Featured image via John Ranson for The Canary
We need your help to keep speaking the truth
Every story that you have come to us with; each injustice you have asked us to investigate; every campaign we have fought; each of your unheard voices we amplified; we do this for you. We are making a difference on your behalf.
Our fight is your fight. You’ve supported our collective struggle every time you gave us a like; and every time you shared our work across social media. Now we need you to support us with a monthly donation.
We have published nearly 2,000 articles and over 50 films in 2021. And we want to do this and more in 2022 but we don’t have enough money to go on at this pace. So, if you value our work and want us to continue then please join us and be part of The Canary family.
In return, you get:
* Advert free reading experience
* Quarterly group video call with the Editor-in-Chief
* Behind the scenes monthly e-newsletter
* 20% discount in our shop
Almost all of our spending goes to the people who make The Canary’s content. So your contribution directly supports our writers and enables us to continue to do what we do: speaking truth, powered by you. We have weathered many attempts to shut us down and silence our vital opposition to an increasingly fascist government and right-wing mainstream media.
With your help we can continue:
* Holding political and state power to account
* Advocating for the people the system marginalises
* Being a media outlet that upholds the highest standards
* Campaigning on the issues others won’t
* Putting your lives central to everything we do
We are a drop of truth in an ocean of deceit. But we can’t do this without your support. So please, can you help us continue the fight?