The headlines say it all. “George Osborne rallies support for austerity.” “UK coalition must cut budget deficit faster, ratings agency warns.” “David Cameron: Cut now or we’ll pay £1 billion a week in interest.” “Britain’s bloated government needs to go on a diet.”
The whole dynamic of British politics is being organised around a consensus that we must cut now and make deep cuts that will change – and damage – the way we lead our lives. Count me out of that particular consensus. The problems we face are not caused by public services, or public sector pay, or public sector pensions. They were caused by the banks and the global economic crisis. It is the unfettered agenda of Margaret Thatcher and Ronald Reagan, not public services, that has failed.
Veteran economic commentator Samuel Brittan pointed out last autumn that the problem was not the budget deficit but the need for recovery. “The British political classes are going through one of their occasional bouts of masochism, with party leaders vying with each other on the theme of who can cut public spending faster and more effectively”, he wrote. “If we have a normal economic recoverym the red ink will diminish remarkably quickly. If we don’t, it won’t and won’t need to.”
The position of public finances has deteriorated for two reasons. First, because of the cost of bailing out the bankers and their shareholders. Second, because the worst collapse in economic growth since the Second World War has seen tax revenues fall.
Tax revenues have fallen with output, profits and employment, while immense sums have been transferred from taxpayers to bank shareholders. These two factors far outweigh the inincrease in state benefits as people lose their jobs.
The progressive way out of the crisis is not cuts or attacks on public sector pay but a restoration of economic growth. That requires tackling its real cause, a huge drop in private investment.
Instead, the majority on middle and lower-incomes are being forced to pay. That’s plain already – with child trust funds cut, employers’ National Insurance contributions held down but employees’ contributions to be raised; 10,000 fewer university places and hundreds of millions axed from spending on schools.
The economic and political agenda now being set in Whitehall will form the framework for London’s City Hall and the context of the London elections of 2012.
Labour has opened the process for the selection of a candidate for London Mayor and I have decided to run for the nomination.
My motivation for running is for one overriding reason: if I am elected, my focus will be to do everything I can to protect Londoners from the recession and the effects of the Government’s policies. I will use every lever to make sure our quality of life is protected and improved. I will not be a Mayor who spends his time defending bankers, but one who will use mayoral budgets and powers to protect ordinary Londoners.
I aim to overhaul London’s budget priorities in favour of Londoners as a whole, not hedge-fund managers or polluters. Real work to make the living wage in London a reality will be key. I will press the Government for powers to raise money on the bond markets to build affordable homes, including for rent, to break the back of the housing shortage and create work.
Instead of Boris Johnson’s wasteful projects, the expensive reduced-capacity “new bus for London”, the obsession with academy schools, the zany floating airport in the Thames Estuary, we should concentrate on defending public services and holding down fares. Under the Tory Mayor, a single bus fare has risen by one third, as has the price of a weekly bus pass.
This week, we’ve started to set out new policy ideas, such as using smart technology to help reduce congestion and cut energy bills.
My focus will be on the day job. I will only have one job, unlike Boris Johnson, who works as a Daily Telegraph writer paid £250,000 a year – a salary he calls “chicken feed”.
He had a 5 per cent rise in his mayoral salary in his first year, despite his other earnings. His chief executive got a 12 per cent boost, crashing through £200,000 a year.
If elected, I will take no pay rise during this term and I will oversee a four-year pay freeze for all senior mayoral appointments at City Hall.
To deal with the more difficult circumstances, we need the best possible dialogue within the London labour movement to get the best for Londoners. I want to see regular meetings that bring together trade unions, Labour Assembly Members, London Labour MPs and council leaders.
From MPs such as David Lammy and John Cryer, to young Labour activists and council leaders, the early backers of my candidacy show that London Labour is ready to unite to help London get through hard times.
To secure the best for Londoners in hard times, we will need a different approach to the Tories. Serious times require serious solutions that protect Londoners – to protect public services in the capital, create new jobs, make the streets safer, hold down fares and build more affordable housing.
* Murad Qureshi: Why the London mayoralty is Labour’s first big test in opposition
