The following is a transcript of Patrick Allen’s speech at the launch of the Progressive Economy Forum in which he discusses his motivations for establishing the forum and the damage wreaked by austerity policies.
Good evening everyone and a very warm welcome to this exciting occasion – the launch of the Progressive Economy Forum.
We are delighted and honoured to have here on our panel famous parliamentarians and economists I know you are keen to hear from them so I will be brief.
I wish to explain what the PEF is and why it has been created.
40 years ago, I became a solicitor because of my passion for social justice. I saw the law as a powerful weapon to help citizens overcome injustice and assert their rights. I created my firm to do that work and we have been helping people in thousands of cases ever since.
However, since 2010 I have become keenly aware of a broader injustice –– the destruction of our public services and our welfare state, by ill-advised austerity policies.
By this I mean unprecedented cuts in public spending which have caused harm to millions of people, particularly the poorest and most vulnerable.
The policies have increased poverty, insecurity, and inequality. It can only get worse as there is no end in sight.
The policies were devised by George Osborne in his first budget in 2010 and have continued unchanged by the current Chancellor.
Spending cuts are wrong, they are misguided, they are causing untold damage to our economy and our citizens and irretrievable loss of national income. They are completely unnecessary, and they are economically illiterate. The vast majority of economists oppose them.
I have created the Progressive Economy Forum to do something about this.
The harm caused by austerity was brought home to me when my firm became involved in the Grenfell Tower case. We act for 50 residents of the tower whose lives have been destroyed by the fire. Some have lost loved ones. They have lost their homes and possessions.
Some have still not been rehoused but austerity and ideology means that we have almost stopped building social housing in this country despite overwhelming need.
Lessons on how to run the economy were learned after the mistakes of the 1930s with the insight of Keynes and were successfully deployed between 1945 and 1975. In this period we achieved stability and the highest sustained annual growth we have ever known.
But Thatcher and Reagan turned to a different economic ideology. Financial deregulation was started by them and eventually led to the catastrophic 2008 crash.
This caused the UK to lose 6% of GNP in 12 months – itself an unprecedented event of our lifetimes.
Instead of re-regulating the banks and applying Keynesian policies to stimulate demand, the government:
- implied that Labour had been responsible for the 2008 Global Financial crisis
This never been properly rebutted, and many people still believe it.
- Cut public spending to cure the deficit against the advice of economists.
The result has been disastrous.
We have had the slowest recovery since records began.
Wages have still not recovered back to their 2008 levels.
Economic growth in the last quarter was 0.2%.
Our council member and economist Simon Wren-Lewis estimates austerity has cost every household in the UK £10,000 in lost income.
Immigration was wrongly blamed for the pressure on public services caused by austerity and this was a major factor behind the Brexit vote.
Brexit will itself make us even poorer exacerbating the low growth caused by the cuts.
Something has to be done and that is where PEF comes in.
Not just to say austerity is wrong but to provide a truthful narrative of what has happened to explain and inform economics to all and to provide an updated macroeconomics for the modern world of climate change and IT.
We have recruited 12 of the best economists in the country who will come together to debate and create economic policy for the future.
We will counter the false narrative which says that our public debt is unaffordable and unsustainable.
We will explain the purpose of public debt, how it is used for public investment and a source of vital income for our pension funds.
We will show how the economy works and make it intelligible and accessible.
With the help of CLASS, we will create training materials, training courses on economics and an informative web site easy to understand materials.
We are not politically aligned but we will talk to any political party that wants to hear about our progressive policies.
Our recent survey shows how important economics is to people, 51% in the survey think they understand it, 69% would be interested in knowing more about the economy.
68% say that economics affects their voting decisions – so the credibility of the parties and their economic policies is fundamental to winning elections.
Austerity has failed. It has always failed.
Deregulation of finance caused the 2008 crash. The cost of bank failure was then picked up by the public purse while the bank bonus culture continues unchanged.
A judge and jury assessing the evidence would have no hesitation in rejecting austerity out of hand.
PEF will create the alternative and bring about a sea change in the understanding and implementation of macroeconomic policy.
This will transform our future economy to make it dynamic, equitable, sustainable and prosperous.
Our first Council meeting is tomorrow.
