Paul Nowak: We can end the Tory ‘doom loop’ of economic stagnation by investing in public services

'Cuts have consequences – but so does investment.'

NHS workers strike

Paul Nowak is the General Secretary of the Trades Union Congress

Last month, we learned that in-work poverty has rocketed by 1.5 million people since the Conservatives took office in 2010.

I doubt anyone reading this will be surprised. Like me, many of you will have spent time on picket lines in recent months to demand fair pay for public sector staff after many years of pay cuts.

It’s been a hard time for us all – seeing working people in both the public and private sector hit so hard, while profits and boardroom pay soar. And seeing the fallout in our communities from the decimation of public services and the fall in living standards.

Jeremy Hunt’s Spring Budget did nothing to help. No boost to universal credit. No boost to the minimum wage. And no additional funding for public services and the staff who run them.

No government in the last 200 years has a worse record on wages than the Tories since taking office in 2010. This is what economic incompetence looks like.

I am hopeful that the tide is turning. Working people and their unions have brought government to the negotiating table. In the private sector, workers are winning better deals as a result of industrial action. And public support for striking workers and greater investment in our public services is holding up.

People see clearly that the Conservative economic approach has failed them. We’ve been calling it the ‘doom loop’: the more the Tories cut pay and public services, the weaker our economy becomes; and the weaker our economy becomes, the more the Tories cut pay and services. Yet somehow wealth still gets rewarded.

But we need to be careful not to get caught in our own doom loop – going round in circles telling people how terrible things are. They know it. Instead, we need to foster hope and belief that with a different approach, the UK has a much better future ahead.

One of the most important stories we can tell is about how much better things can be if we properly fund our public services to make them world class. And I don’t mean better only in terms of the vital role they play in individual lives – it’s what our economy needs too.

The Conservative’s will go into the next election stoking up people’s fears. It’s what Osborne and Cameron did when they claimed that austerity was necessary to rescue our nation from bankruptcy.

But the last decade has shown us clearly that it is their cuts to public services that damaged the economy. Growth and wages stagnated. And that hit our public finances too.

Cuts have consequences – but so does investment.

When public services work well the economy grows stronger, national wealth rises faster, and the government takes in more revenue. If we break out of the doom loop, we can get onto this upward spiral.

This is the hope we can give people for the future. This is the credible alternative to decimating the services that our future prosperity depends on.

It’s a story that can be told in tangible ways across all the services that people are familiar with in their lives. And it’s a story that refutes Conservative claims that we cannot afford the world class public services that a strong economy and sound public finances depend on.

By funding pay rises and increasing investment in the NHS, we can end the recruitment and retention crisis. We can treat people sooner before their illness becomes costlier to treat. And we can keep people in work, instead of on treatment waiting lists. With more people in work, we will have a stronger economy, and more revenue coming into the public purse.

By investing in the expansion of affordable public transport, we can reduce congestion, speeding up commuting, supply chains, and transport of goods to market. Business profits will rise – along with the tax contributions from thriving businesses to the nation.

By funding free and dependable childcare, we can make it possible for more parents to access work and remain in work. This will raise family incomes through higher earnings. And it will raise the revenue the Chancellor gets from income tax.

By investing in world class schools, further and higher education, we will have a higher skilled workforce. This will lead to greater productivity, innovation, and inward investment. And yes, more revenue for the Treasury.

There are so many of these win-win stories we can tell. Stories that bring to life how families and businesses can thrive with world class public services. Stories about a future that works. After tough years of austerity, crisis, and sleazy incompetence in Conservative government, bringing people our story of hope is going to be vital to winning the changes Britain needs.

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