Raphie de Santos

1. The Economic Strategy of the Coalition The Economics of the Madhouse Raphie de Santos Scottish Socialist Party 1

3. Out source NHS to private sector

4. New stagnant capitalism cannot support current public services

5. Temporarily increase taxation

6. Cut real wages and increases productivity through threat of unemployment/welfare cuts

7. Endure recession in first half of term

8. See recovery based on private sector innovation in second half of term

9. Driven by corporate tax cuts & incentives and “new” self-employed

10. Elected on the back of this recovery

11. Is this s realistic proposition or the economics of the madhouse?2

13. This is made up of £83bn of cuts and £30bn of tax rises.

14. Labour had planned £51bn in cuts and $21bn in tax rises

15. The figures may be larger on the cuts if they go for 40% instead of 25% cuts if the economy is weaker than they estimated which I think will be the case.

16. NHS strategy to out source and reduce costs

17. Private sector can provide “same” services more cheaply 3

19. Yet the cuts planned by 2014 fall much more on families with children than on the childless and pensioners. The single beneficiaries of the budget the report concludes are childless households in the richest half of society. This puts to bed Nick Clegg’s claim that what the coalition’s budget is setting out to do is create the opportunity for greater social mobility.4

20. How Many Jobs Will Be Lost? Capital economics- 750,000 public sector jobs Oxford Research 2.2m private jobs linked to public sector 650,000 will go as a result of public sector cuts And the recession cuts will induce will see another 500,00 jobs go 5

22. 40% chanced of second recession

23. Only 90% of pre peak production of developed countries reached

24. Restocking of inventory finished

25. No sign of consumer led demand

26. Individuals and corporation still deleveraging

27. Mass unemployment

28. Banks unwilling to lend – still polluted by debt

29. Danger of hard landing in China – property and stock market bubble

30. China recovery was import driven with infrastructure and lending to banks – tapped tuned off

31. Trade war developing through currency devaluation

32. Benefits to west will disappear6

34. Q2 2010 saw benefit of delayed construction spending and weak pound now passed

35. Unemployment starting to rise prior to cuts

36. Housing market falling 5of last 7 months (Halifax data)

37. Bank lending to corporations declined for 11 successive months

38. Bank lending to individuals a fraction of pre credit crunch

39. Retail sales falling

40. Record trade deficit

41. Inflation still high on damaged production capacity, weak pound and demand from emerging middle class in developing world

42. With cuts second recession looks certain7

44. Big cuts in jobs and wages

45. Attacks on employees pension schemes

46. Big margins on current lending because of historically low central bank borrowing rate

47. But still lending declining to corporations and individuals

48. Future profits will be hit by declining house prices8

50. Government forecast over next five years to grow by £535bn

51. £270bn of existing loans have to renewed over next 5 years

52. Interest payments total £40 bn per year rising to £60bn at a rate of 4.4% a total of £250bn over next five years

53. Holders of debt 30% overseas

54. We have to find a £1.1 trillion over next five years

55. Weak pound and economy (receipts)

56. Have to borrow IMF 9

58. Large Services sector X

59. large bank sector X

60. housing boom X

61. Credit X

62. Large Public Sector X10

64. Capital flowed east

65. Lower wage rates

66. Higher rate of exploitation

67. More human labour means higher rate of profit

68. We cannot compete this strategy will fail11

70. e.g. Renewable energy Bio technologies

71. Free market approach of coalition will preclude this

72. Self employed is dependent on growing private personal consumption through credit

73. At odds with what is happening12

75. No scope for lowering rates

76. QE not putting money into the economy - banks holding onto money

77. Other Governments now looking to infrastructure spending and direct help to new innovations13

81. •Taking North Sea Oil under common control and ownership would generate an extra £50 billion a year for 15 years.

82. •Instead of cutting pensions and demanding people pay more towards their pensions you could look to provide an alternative retirement provision that is not dependent on the whims of the financial markets. You could provide for all people over 60 free rented housing, electricity and gas, public transport and free access to cultural and sports facilities. 15