Safe as Houses?

Issue section: 

Welcome to Britain in the 21st century--a place where the old are told they will have to work until they die; where even some of those on a reasonable income cannot afford a place to live; where the sick are forced to wait months, if not years to get treatment; and where the poor are blamed for the state they're in.

New Labour politicians constantly tell us that the economy is in good shape. They point to the low levels of inflation and high levels of employment and say everything is alright. Yet if this is what we face after a period of so called boom, how much worse will it be when the economy goes into crisis? Serious economic problems are now obvious as is seen with the collapse in share prices, both in Britain and the US and the threat of recession.

The consumer boom which has been responsible for much of the economic expansion of the last few years is now showing signs of coming to an end. There are clear limits to what people can borrow and the property boom on which much of this borrowing is based looks almost certain to be heading for a crash.

Levels of government expenditure on housing have decreased year on year under both Labour and the Tories. New house building is at the lowest level for a century, council house building is non-existent and the government is determined to press ahead with the sell-off of council housing stocks. The implications for ordinary people if the market crashes will be severe. The last time this happened at the end of the 1980s thousands had their house repossessed and many more faced years of negative equity.

The failure of the market is not simply confined to those who have mortgages. The privatised pension industry which the government holds so dear is also facing serious problems. Many workers were forced to take out a private pension as companies closed down their final salary schemes which guaranteed them a reasonable income when they left work. Now, as the stock market falters, pension schemes are feeling the heat. The Association of British Insurers has said that we should be saving £27 billion a year more at present to ensure we have a comfortable retirement. The level of savings required has now escalated from around 10 percent of earnings throughout working life to 20 percent or more. Millions of working class people face the prospect of having to work well beyond the official retirement age.

Deliberate policies have led to this mess. For years, first under the Tories and then under New Labour, we were told the market is the best way to provide. Whole sectors of the economy were sold off to private business. Now the most basic aspects of our lives, such as housing, transport and pensions, are subject to the whim of the stock market. Rather than learn the lessons from this disaster Blair is determined to press ahead with further privatisation in health and education. Yet the current problems are a damning indictment of the market economy.

There is an alternative to the madness we face at the moment. As a first step this would require the government to massively increase its spending on transport, housing, health and education. It would have to switch its priorities from private to public provision, ensuring the state could care for those who are too old or sick to look after themselves. New Labour has no intention of doing this. It is up to all of those who are currently feeling the brunt of the market madness and who are angry with New Labour's complicity to force them to do otherwise.