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The austerity consensus has collapsed

The austerity consensus has collapsed

There is no alternative: the only way out of Britain’s current economic plight is massive cuts to public spending. Taxes on the wealthiest must be slashed: they are blocks on aspiration and economically counterproductive. Austerity is the only game in town.

Or so we have been told ever since the Coalition was formed in the rose gardens of Number 10 Downing Street. The overwhelming majority of the media has gladly reinforced the Government line, and those voices calling for an alternative have been marginalised and ignored.

That is what makes the findings of this week’s YouGov poll by the new trade union-backed Class think-tank all the more striking. The austerity consensus has collapsed – at least among the British public. Class tested the popularity of a number of policies championed by victorious French Socialist Presidential candidate François Hollande: the results surprised even an optimistic lefty like myself. 56% supported a new 75% top rate of income tax on those earning over £1 million: even more than four in ten Conservative voters backed the idea.

Seven out of ten believed that ‘redistributing wealth from the richest in society’ was an important aim in ‘setting economic policy’. While bringing the deficit down was considered ‘very important’ or ‘fairly important’ by 85%, the British public were near-unanimous (with 95% support) about the Government’s role in creating jobs and reducing unemployment, as well as encouraging economic growth.

In another departure from neo-liberal economics, 74% were behind proposals to establish a publicly-owned bank to lend to small and medium businesses. It is a demand that once languished on the fringes of British politics – but it is now firmly in the mainstream.

With house-building at the lowest levels for nearly a century, the British people are willing to back radical action. 64% support a national programme of building half a million new homes a year, including 150,000 new council homes. Most alive today will not remember that – in the 1950s – the Conservatives and Labour competed over who could build more council housing.

What is particularly striking about these findings is that the Government has been highly effective at hiding the failures of its austerity agenda. Most respondents were not aware that the Coalition has had to push its target for eradicating the deficit back to 2017, meaning at least two more years of cuts. Indeed, nearly seven out of ten did not know that 90% of the Government’s cuts are yet to take place.

When Lehman Brothers came crashing down nearly four years ago, there was some rather naïve hope (as it turns out) that neo-liberalism was a dead ideology walking. But the crisis has turned out to be one of the biggest opportunities neo-liberalism has ever had: across Europe, the frontiers of the state are being forced back, taxes on the rich slashed, services privatised, and jobs and wages cut.

But this poll is yet more compelling evidence that the mood is definitely changing. The forces of austerity have had a kicking in France and Greece; in the Netherlands, for example, the anti cuts Socialist Party is doing well in the polls. The backlash against austerity has arrived in Britain, too. Space has opened for a radical departure from the consensus: it now needs to be tapped into.

Today, Class hosted its first public seminar in Canary Wharf – the heart of British finance – bringing together a range of economists, academics and experts. There isn’t a lack of alternative policies on offer, but so far there has been a failure to link them together in a coherent narrative. If we are to genuinely defeat the neo-liberal consensus, that is the task ahead. Class will undoubtedly play an absolutely key role in doing just that here in Britain.

This article was first published on Labour List on Saturday 26 May 2012.

Work areas: Economy and Industry.