Sunday, April 28, 2024

Events | 2010.03.27

Letters: Better routes to economic recovery

In the current fragile state of the British economy, the government was right to resist demands from budget deficit fetishists for immediate cuts in public spending. But by the same logic, given the uncertainty about the prospects for economic recovery over the next few years, the government should avoid deep cuts in public spending from 2011-12 onwards ( Darling: We will cut deeper than Thatcher , 26 March). It makes no sense to embark on a programme of fiscal retrenchment until the process of recovery is assured. The best way to inspire public confidence in our future economic prospects is through a Green New Deal .

Public debate about economic policy in the UK is mesmerised by the budget deficit, with the three main political parties, the media and most commentators competing over the timing and severity of measures to reduce it. The dominant view is that the deficit must be cut quickly and that this will involve swingeing cuts in public expenditure and some increase in taxation. Yet output has fallen 6% below its pre-recession peak and unemployment has risen from 5% to 8% of the workforce.

The lessons of the Great Depression and John Maynard Keynes seem to have been forgotten: when private-sector spending on consumption and investment falls, public-sector spending must be increased to maintain effective demand and prevent unemployment. Current policy proposals increase the danger of a double-dip recession and a new, prolonged era of high unemployment, unused resources and human misery.

The key economic problems are not the size and sustainability of the budget deficit: they are our unsustainable way of life and the shortage of jobs, especially for young people. Most of the increase in the deficit stems from falling tax revenues and rising social security bills caused by the recession itself and will be reversed when the economy recovers. The government must, of course, maintain control over its finances, but it should use them to inspire public confidence in our future economic prospects. On all these counts, our best hope lies in a Green New Deal designed to promote social justice and environmental sustainability.

Julian Le Grand (LSE)

Ian Hargreaves (Former editor of the Independent)

Stuart Holland (University of Coimbra, Portugal)

David Purdy, (University of Manchester)

Polly Toynbee (Guardian)

Ha-Joon Chang (CambridgeUniversity)

Victoria Chick (UCL)

Susan Himmelweit (Open University)

Geoffrey Harcourt (Cambridge University)

Geoffrey HodgsonUniversity of Hertfordshire)

Malcolm Sawyer (Leeds University)

Philip Arestis (Cambridge University)

Sheila Dow (Stirling University)

Frederic Lee (University of Missouri-Kansas City)

Bob Jessop (Lancaster University)

Lynne Segal (Birkbeck)

Keith Cowling (Warwick University)

Jonathan Rutherford (Middlesex University)

Grahame Thompson (Open University)

Giovai Dosi (Sant\'Anna School of Advanced Studies, Pisa)

John Weeks (SOAS)

Andrew Sayer (Lancaster University)

Carlota Perez (Cambridge University)

Kazimierz Laski (Vienna Institute for International Economic Studies)

Michael Best (University of Massachusetts)

Wolfgang Blaas (Vienna Universityof Technology)

Stuart Weir (Democratic Audit)

Shaun Hargreaves-Heap (University of East Anglia)

Kari Polanyi Levitt (McGill University)

Erik Reinert (Tallinn University of Technology, Estonia).

Klaus Nielson (Birkbeck)

Edith Kuiper (SUNY)

Basil Moore (Stellenbosch University)

Pat Devine (University of Manchester)

• Alistair\'s Last Stand has been hailed as the Robin Hood budget – but was it really? The recession has made poverty worse both in the UK and abroad. The threat of global warming becomes more urgent each day. This is why an unprecedented coalition of development agencies, anti-poverty groups, environmental organisations, faith bodies and trade unions have come together to argue for a Robin Hood tax, and won the support of more than 100,000 grassroots campaigners throughout the country. We want to see a tiny tax levied on financial transactions, starting at just 5p for every thousand pounds traded.

Of course this will work best if internationally co-ordinated. But there is also real scope to move unilaterally – after all, the UK already has a unilateral stamp duty on shares of 0.5%. International agreement will be helped if countries like the UK show global leadership by moving ahead on their own.

We were therefore disappointed by the chancellor\'s dismissal of unilateral transaction taxes in his budget speech. The bonus tax was unilateral and is now making a significant contribution to public finances. A unilateral transaction tax on sterling exchange is simple to collect, hard to avoid and would make a similarly useful contribution to public finances. That\'s why it should feature prominently in party manifestos as a commitment to fight for a global transaction tax and to lead from the front by implementing a unilateral transaction tax on sterling during the first 100 days in office.

Jane Cotton (Oxfam)

Brendan Barber (TUC)

Tim Willmott (The Web of Hope)

Martin Narey (Barnardo\'s)

Neal Lawson (Compass)

Jasmine Whitbread (Save the Children)

Daleep Mukarji (Christian Aid)

Richard Miller (Actionaid)

Andy Atkins (Friends of the Earth EWNI)

Derek Simpson (Unite)

Mark Oxbrow, (Faith2Share)

Sally Hunt (University and College Union)

Eric Levine (Students Partnership Worldwide)

Aaron Oxley (Results UK)

Martin Drewry (Health Poverty Action)

David Bull (Unicef UK)

Kim Bryan (Centre for Alternative Technology)

Christine Blower (NUT)

Simon Trace (Practical Action)

Marie Staunton (Plan UK)

Kathryn Llewellyn (Pump Aid)

Alison Gelder (Housing Justice)

Derek McAuley (The General Assembly of Unitarian and Free Christian Churches)

The Revd Roberta Rominger (United Reformed Church)

Sam Daws (UNA-UK)

Mark Beacon (ACTSA)

Ronnie Smith (The Educational Institute of Scotland)

Debbie O\'Rourke (British Dietetic Association)

Theresa Helm (Chigwell Justice and Peace Centre)

Chris Roles (Y Care International)

The Rev Ian Galloway (Church of Scotland)

John Hannett (Usdaw)

Ian Williams (Concern Universal)

Chris Bain, CEO, CAFOD

Jonny Currie (Medsin-UK)

Wes Streeting (NUS)

John Hilary (War on Want)

Deborah Doane (World Development Movement)

Tom Skinner (Speak Network)

David Hillman (Stamp Out Poverty)

Matthew Frost (Tearfund)

Miles Litvinoff (Ecumenical Council for Corporate Responsibility)

Sabine K McNeill (Forum for Stable Currencies)

Leslie Morphy (Crisis)

Alan Smith (Stop Aids Campaign)

Andy Flannagan (Christian Socialist Movement)

Mark Serwotka (PCS)

Taavi Tillmann (Economic Governance for Health)

Peter Saunders (Christian Medical Fellowship)

Sarah Payne (YWCA England and Wales)

Paul Kenny (GMB)

Tim Poil (Nationwide Group Staff Union)

Chris Keates (NASUWT)

John Smith (Musicians\' Union)

Lesley Mercer (CSP)

Jonathan Ledger (Napo)

Mike Mandelbaum (TB Alert)

Joanna Kennedy (Zacchaeus 2000)


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