The Government plans to use cuts to cut living standards for the poor, a leading economist told a Tribune meeting.
Michael Burke, a former senior advisor for City banks, said the planned cuts – to be unveiled in Chancellor George Osborne’s first Budget next week – had little to do with reducing the national deficit. Previous rounds of drastic public sector cuts had, such as those under Margaret Thatcher and in Ireland had resulted in bigger deficits and massive unemployment as high street spending and Exchequer income fell.
A deficit, though not on the current scale, could work well for the economy, and cutting it requires investment not cuts, said Mr Burke.
Labour MP Jon Trickett told the breakout meeting at the Compass annual conference called for a new economic alternative strategy including a green investment bank and high-speed rail links, saying that Labour’s abandonment of any critique of capitalism had hobbled its argument.
Lisa Nandy, the new Labour MP for Wigan, called for an end to the “top-down” culture of economic and decision policy making to involve those affected by cuts. London Mayoral candidate Ken Livingstone said one cut should be the renewal of the Trident missile programme.
