GFTU BGCM 2019 Minutes

seemed to me to be completely unsustainable and I expected there to be a

shift to a new progressive left of centre settlement which would put right many

of those fundamental flaws of the Thatcherite and Reaganite revolution of the

1970s and 80s and it just did not happen. It just did not happen. There was a

shift, but actually the people who filled the vacuum were the right.

There was a brief period where the Labour Government of 2007 to 2010,

Gordon Brown’s Government, moved in a sort of Keynesian direction. There

was some attempt to actually have an industrial policy, to actually shift politics

in a more Keynesian direction, but it did not really take hold and after 2010

there was a fundamental shift towards austerity, towards saying that all the

problems of the economy had been caused by Labour Governments

overspending and that actually was the root cause of the problem. This was, in

my view, a fundamental travesty of what had actually happened, but it became

very quickly embedded in political discourse in 2010. Labour did not mend the

roof while the sun was shining and if consumers were tightening their belts,

which they were back then, then it made sense for the Government to tighten

its belt as well and this was economically completely illiterate, because if the

consumer is tightening its belt, businesses are not investing, then it requires

the Government to act as a spender of last resort to prevent there being an

even deeper contraction. But back in 2010 the myth quickly became

established that all the problems of the economy were caused by

overspending, too much borrowing, too much State and that the answer was to

actually contract public spending, deal with the deficit, raise taxes, cut public

investment and get the public finances back on track within five years. That

was the plan and for one reason or another, which we do not need to go into

now, that became the accepted political wisdom of the time.

The result, as might have been expected, was that the economy grew much

less slowly than expected. Raising taxes, cutting spending slowed down the

rate of growth and it took much, much longer for the public finances to start to

come round. It was supposed to be dealt with in one term and then it became

two Parliamentary terms. Now it is going to be the mid-2020s by the time the

Government hits its targets. So that was the second big anniversary, 2009, the

113