According to the latest optimistic estimates of UK economic growth, that means Reeves has just about £10bn to spare on improving public services, unless Labour breaks its promise not to raise taxes or to borrow more. That means the vicious austerity that the NHS, local governments and schools and universities have experienced over the last decade or more will continue – at least until the miracle of faster growth appears. Total health spending annual growth of 0.8% would result in the next four years being the tightest in NHS history under the Labour pledges – tighter even than the former Tory coalition government’s “austerity” period, which saw funding grow by just 1.4% real terms a year between 2010/11 and 2014/15.
What about housing? The new Labour government says it will aim to build 300,000 new homes a year through the next five years.
No, the whole housing plan will depend on private developers building homes for sale with minimal monitoring for ‘affordable homes’. The Labour leaders are more concerned with removing planning regulations in local areas so that private developers can build where and how they want. And who are these developers? As has been pointed out, they are likes of BlackRock, the American investment company, which already owns 260,000 British homes on which it is making some eyewatering fees, around £1.4bn last year.
Then there are the energy and water utilities. The scandal of these privatized utilities is is for all to see, where shareholders have got billions in dividends, while debt and prices rise, The total collapse in the water infrastructure has reached the point where the UK’s water supply, rivers and beaches are no longer safe to drink or touch. And yet, Labour has no plan to bring these utilities back into public ownership. Instead, it wants ‘better regulation’. Apparently, it wants less regulation in housing and more regulation in utilities and the postal service.
Securonomics however, does mean more investment in one key sector: defence. The new Labour government has pledged to raise defence spending to 2.5% of GDP in this parliament in order to ‘secure’ the country, supposedly from the threat of invasion by Russia or China – but in reality to meet the demands of the US and NATO. UK defence spending is already 2.3% of GDP, but more is to be spent while the NHS remains in austerity mode.
Securonomics is really a return yet again to the idea of ‘public-private partnership’. What that means is that the government will borrow or tax a bit more to invest a bit more, mainly to encourage and subsidise the capitalist sector to invest more and let them take the lion’s share of any extra revenues produced. Public sector investment will mainly be used to help the capitalist sector invest, not to replace it.