What are the alternatives?

With the results of the government’s Comprehensive Spending Review now published, Sarah McCulloch considers potential alternatives to the impending spending cuts. From getting rid of Trident to clamping down on tax evasion, she found a few.

Sarah McCulloch

On Wednesday the 20^th of October George Osborne announced £81bn in cuts to public spending. This includes a 40 per cent cut, that’s £2.9bn, in higher education funding. Although it is still unclear where exactly the axe will fall at our universities, previous experience tells us that we can be sure these cuts will lead to course closures, staff job losses and a poorer quality of education.

As a Students’ Union we will not stand for these cuts. During the summer, we agreed to make our priority taking a stand against cuts to higher education. Since term began, we have been raising awareness amongst students about the cuts by running stalls at the Welcome Week Fair and every day at lunch times in the student union building. We have also been doing lecture shout-outs and door knocking. On the morning of the Comprehensive Spending Review we held anti-cuts fairground games, encouraging students to play Hoop-liar, throwing hoops over the faces of Nick Clegg and Vince Cable.

Support

At the last General Meeting, the student body passed policy endorsing everything we have done so far and empowered us to work further on the campaign. On the 10^th of November we are hoping to take 600 students down to London to demonstrate against the cuts to our education and the lifting of the cap on tuition fees. This event is being held in conjunction with the National Union of Students and the University and Colleges’ Union. Coach tickets are £5 from the box office in the student union building on Oxford Road, so why not join us?

Speaking to people about the campaign against higher education cuts generally gets a positive response; most students instinctively oppose the commodification and reduction in quality of their education. Every so often someone comes along asking, “But what is the alternative?” It’s a very fair question. How can we deal with the deficit without cutting public services?

Robin Hood?

The most immediate and effective option is to enforce taxation. Every year £70bn is lost through tax evasion and £25bn in tax avoidance by wealthy businesses and individuals. Due to cuts in staff £27.7bn in tax is uncollected by Her Majesty’s Revenue & Customs every year. In September 2010, George Osborne intervened in an ongoing dispute between the HMRC and Vodafone, canceling Vodafone’s outstanding tax bill of £6bn. You read that correctly, £6bn. Andy Halford, Vodafone’s financial director, has been “advising” George Osborne on company tax.

That’s just enforcing the tax rules that we have already. Introducing a tax on financial speculation could also raise a great deal of money without unduly penalising financial speculators. Known as the ‘Robin Hood Tax’, a 0.05 per cent levy on risky investments could return almost £252bn globally a year.  Given that risky investments can make a return of up to 13%, this is hardly squeezing the rich.

Other alternatives include scrapping Trident, our nuclear deterrent. Yes, this is almost always mentioned by anti-government campaigners, but as we really aren’t going to be using a nuclear weapon any time soon, now or in the future, it’s not much of a deterrent. Scrapping Trident completely would save us £2bn a year (free education for everyone in the country costs only £3bn, remember).  We could also end the drug war, on which we spend £13bn a year prosecuting addicts and recreational users and imprisoning non-violent drug dealers.

Added together, these alternatives exceed the £89bn in cuts that George Osborne has announced that will “bring Britain back from the brink of bankruptcy”. These cuts are political choice, not inevitability. It’s important to remember that we are paying for a crisis we did not cause. The banking sector collapsing caused the crisis not the public sector. The coalition government talks about fairness, but why is it fair for the United States embassy to be exempted from £382 million in parking fines but we have to pay up to £7,000 a year for an inferior education?

The future

As a consequence of the reduction in public spending, the Comprehensive Spending Review looks set to create even further job losses. George Osborne himself estimates that there could be up to 490,000 public sector job losses.  What he hasn’t factored in is that because many businesses are dependant or heavily reliant on public sector contracts, dismantling the state will devastate the private sector as well, meaning nearly 700,000 private sector jobs could go.

This will create even more unemployment and an even heavier bill for taxpayers as hundreds of thousands of people land on Jobseekers’ Allowance. Iain Duncan Smith, the Work and Pensions Secretary has unsympathetically stated that people need to “get on the bus” and look for work. Duncan Smith and Osborne calculate that by reducing ‘welfare dependency’, the benefits scroungers they see everywhere will be forced to find work. However, for the tens of thousands of people who are disabled, sick, or just desperate to find work and unable to get it, the coming changes to the benefits systems simply mean more anxiety and uncertainty over how they will survive.

With businesses tightening their belts and the public sector being reduced by 19% over  the next four years, there simply aren’t half a million jobs out there to be had. Being in  education, students are currently insulated from this, but not once we graduate. Graduates are finding it hard enough to get a job after leaving university: with an extra half a million people with work experience also competing in the jobs market, the idea of putting yourself in £20,000 worth of debt with no guarantee of a job at the end of three years seems much less attractive.

The last Conservative-Liberal coalition government was in 1931. The government embarked on an austerity programme to deal with the deficit and promptly plunged the country into an economic crisis so deep that only the massive military expenditure and loans of World War II brought us out again – and the Prime Minister at the time, Ramsay MacDonald, lost his seat at the next election. Nobel Prize-winning economist Paul Krugman warned: “The best guess is that Britain in 2011 will look like Britain in 1931, or the United States in 1937, or Japan in 1997. That is, premature fiscal austerity will lead to a renewed economic slump. As always, those who refuse to learn from the past are  doomed to repeat it.”

There is another alternative to this scary future. Instead of cutting public spending, we could increase it. We have plenty of work to be done that would create new jobs and encourage our ailing economy. We could invest in renewable energy and high-speed rail links. We could build new housing for the 1.8m families on council house waiting lists. We could repair all those dodgy roads that make it a nightmare to travel on the bus.

There’s so much public infrastructure that we could invest in which would provide a public service while employing people. Employment means people have money to spend, people with money to spend want services and goods, which are supplied by businesses who pay tax – and suddenly we have a balanced economy again.

Unfortunately, George Osborne has made a different choice and taken a risk with our economy and our future that history has shown does not pay off. Soon we are all going to feel it, as our GPs become even busier, as our buses and trains become more expensive, and as our universities shut down courses, lay off staff, and introduce charges for once-free services.