On 7 May the Prime Minister delivered a speech in Milton Keynes, declaring the national debt to be £1.4 trillion with interest payments of £70 billion a year.
On the same day the annual Prudential shareholders meeting proved to be a stormy affair. There was anger over the attempt to take over AIA, Asian arm of US parent company AIG. The original offer was $35.3 billion (£24.5 billion), but later reduced to $30.4 billion. This was rejected by AIG, leaving Prudential with costs of £450 million and nothing to show for it. Investors savaged the board, demanding resignations. The chairman did not resign, although he did apologise. At the end of this little tempest most shareholders apparently felt they had “had their moment”.
The original offer was almost a third of Britain’s projected national annual interest payment. Just one company working in finance, the sector that plunged Britain into debt in the first place, has access to such funds, much of it from British workers. And not a single pound was intended for rebuilding British industry or indeed any investment in Britain.
There’s no lack of money, only the will to direct it to meet our common needs here. Even if Prudential’s chairman had resigned to assuage the anger of shareholders, nothing fundamental would have changed. Another chairman would have taken over and then, business as usual. Just like after a general election.
Canada is being cited as the example of the efficacy of intended economic policies. In 1992 its budget deficit was 9 per cent of GDP, which it had reduced to 5 per cent by 1995 and was in surplus by 1997. All due to parsimonious housekeeping by the government, or so it is being claimed: in fact those five years were years of global growth that allowed Britain’s Tories to claim they’d handed on a healthy economy to Labour in 1997.
Canada also benefited from having the USA and its burgeoning economy as its neighbour. There’s no such global pick-up to support Britain’s austerity measures today and the neighbours, the eurozone countries, are mired in crisis. Cutting public spending will most likely depress growth and lose 750,000 jobs with little or no private employment capacity to compensate, so unemployment could officially reach 3 million, adding further pressure to public finance.
Unless the working class realises it is not responsible for the failings of capitalism, and not only refuses to cooperate with the government’s measures, but formulates and fights for its own economic demands, it will be made to pay.
Public services can be defended and investment demanded for production and the cultivation of skills that make the creation of wealth, real wealth not speculation, possible and sustainable. As the Prudential demonstrates, there is the money, now the political will is required to appropriate it.