Autumn statement: discernment in an economic hall of mirrors

By Simon Barrow
December 3, 2014

Despite some truly grim economic statistics, Chancellor George Osborne will attempt to deflect criticism for the failings of austerity economics in his Autumn Statement today, blaming the world economy and the last government.

He will continue to confuse the debt with the deficit (actually the investment we need can increase the latter in the short-run, but is required to reduce the former), ignore the problem of his own making that lies behind low tax receipts (the creation of a low-wage and precarious job market for increasing numbers of people) and fail to address structural inequality and capital leakage from the richest sectors (including the failure to tackle fundamental flaws in our financial economy which generated the last major crash, and could well do so again).

In other words, the gap between economic rhetoric and economic reality will continue to be enormous -- while those who favour an investment-led, sensibly regulated, SME-focused, local-led, job creation and sustainable/selective growth approach to tackling our economic problems still struggle to find a political space and a convincing popular narrative to champion the alternatives (such as those set out by the cross-party Green New Deal-style approach Ekklesia has continued to commend).

The other trick in the Chancellor's book today could be the attempt to find a legislative way of imposing austerity policies on an incoming government after the May 2015 General Election. That would be a really hot political potato.

Many of the mainline media's economic commentators continue to espouse the flawed orthodoxies that are part of the problem. An exception tends to be Paul Mason (formerly of the BBC, now of Channel 4 News) who has spoken in the past couple of days of the 'wrong kind of recovery' -- one filled by private and financial debt, asset surges and the London-driven housing bubble. Here he sets out some of the terms of the debate and indicates the trajectory of the Chancellor's approach: http://blogs.channel4.com/paul-mason-blog/questions-tomorrows-autumn-sta...

We can also expect thoughtful analysis from our friends at the New Economics Foundation (http://www.neweconomics.org), Prime Economics (http://www.primeeconomics.org) and False Economy (http://falseeconomy.org.uk), and ToUChstone (http://touchstoneblog.org.uk), among others.

Ekklesia's concern with economy continues to be a fundamentally moral one -- how productive resources, money and public goods (like a banking system which can help people create and share) can be rescued from a corporatised, financialised political and civil sphere dominated by the interests of the super-rich.

Just as the churches need to see economic activity as a part of their mission towards a just, peaceful and sustainable society (rather than delegating 'investment' to those who play by the rules of a game that contradicts these), so community-based politics has to reclaim the economic system from transnational dominance. That's the bigger picture we should not lose sight of.

* More from Ekklesia on the Autumn Statement here: http://www.ekklesia.co.uk/autumnstatement

* Previous budget analysis from Ekklesia: http://www.ekklesia.co.uk/budget

* Green New Deal Group: http://www.greennewdealgroup.org

* More on the upcoming General Election from Ekklesia here: http://www.ekklesia.co.uk/generalelection2015

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© Simon Barrow is co-director of Ekklesia.

Although the views expressed in this article do not necessarily represent the views of Ekklesia, the article may reflect Ekklesia's values. If you use Ekklesia's news briefings please consider making a donation to sponsor Ekklesia's work here.