Warning: cuts are bad for the economy

This week a lone voice was heard in the mainstream media. He has different ideas as to the best way of tackling the UK's estimated £178 billion budget deficit. Up until now newspaper readers have been bombarded by pledges from the three main UK political parties about how they will butcher the public sector in order to balance the books.

The consensus is that big cuts are needed. The argument is about how wide and deep cuts should be. The Tories seem to be winning the PR battle by hinting at the type of cuts that will devastate the lives of millions but won't scare the wealthy and influential bankers who got us into this mess in the first place. A banking crisis has now become the problem of the public sector in one of the great conjuring tricks of recent years.

Anyone familiar with Compass, an independent left-wing think tank, will know they have produced a paper called ‘In Place of Cuts’ that stands as a compelling and coherent alternative to the cuts agenda. It promotes the scrapping of socially useless projects such as Trident and the watered down ID card system and introducing a fairer tax system that makes those who can afford it, pay more as a means of protecting jobs in the public sector. It has received little coverage in the media and the leaders of the main UK political parties have either ignored it or dismissed it. Are we living in a political climate where anyone opposing the cuts agenda is accused of living in ‘cloud cuckoo land?’

This consensus was delivered a mortal blow when a very cogent voice in the world of economics entered the debate this week. Joseph Stiglitz, a Nobel Laureate and former special advisor to Bill Clinton, warned against the dangers of “fiscal fetishism.” In an interview with The Independent newspaper, Mr Stiglitz explained: “Because cutting back means the economy goes into a downturn and the markets lose even more confidence, as it will trigger another recession or depression." What you’ll get then, he said, is a double-dip in the economy.

He also raged against the reverse Robin Hood distribution of wealth from the poor to the rich since the crash of the banking sector in 2008. On this he said: "The current crisis has seen the government assume a new role – the 'bearer of risk of last resort'. When the private markets were at the point of meltdown, all risk was shifted to the government. The safety net should focus on protecting individuals; but the safety net was extended to corporations, in the belief that the consequences of not doing so would be too horrific. Once extended, it will be difficult to withdraw. Firms will know that if they are sufficiently big and their failure represents a sufficient threat to the economy – or if they are sufficiently politically influential – the government will bear the risk of failure."

When we unveiled our plans to introduce a living pension so that pensioners would have enough money to heat their homes as well as eat (how unreasonable!), Plaid Cymru was attacked for being irresponsible by our political rivals. We proposed finding the money to fund the first phase of this policy by simplifying the pension system so that pension credits no longer go unclaimed and by the scrapping of Trident and the ID card system. Perhaps the guardians of fiscal responsibility will remember the words of Joseph Stiglitz before saying this is 'cloud cuckoo land' politics next time.

A Living Pension IS Achievable

Plaid has recently announced our first policy for the UK General Election. We want to raise the basic state pension to the level of the current pension credit and make it universal for all OAPs. At a stroke, this would lift thousands of pensioners out of poverty in Wales and enable them to adequately heat their homes as well as eat properly. Not too much to ask in one of the richest economies in the world, is it? With winter deaths increasing last year by 74% in Wales, something clearly has to be done to help older people with rising fuel bills.

Our political rivals have scoffed at these measures, bleating about the cost of introducing a basic decent standard of living for pensioners. All three London-based parties are competing to see who can introduce the deepest cuts to the public sector to tackle the budget deficit.

Plaid rejects the widely peddled notion that pensioners have to suffer and public sector jobs have to be sacrificed in order to balance the books after the massive bank bail-out. Why should the most vulnerable and lowest paid be punished for the greed culture of the wealthiest amongst us?

As part of our policy, we explained how the scrapping of socially useless projects such as Trident and the watered-down ID card policy would more than cover the costs of rolling out the pension in the first phase for those aged 80 and over.

In time, a living pension could be rolled out to all those aged 65 and over if the UK Government was to increase the tax on those who can afford to pay more. Compass recently identified £50 billion worth of savings, taking into account the scrapping of Trident and the ID card system and by clamping down on tax havens, non-doms and introducing a 50% tax rate for those earning over £100,000.

With some analysts predicting a hung-parliament, Plaid’s representation in the House of Commons could provide crucial in determining who takes power. Our MPs have a reputation for punching above their weight and representing the interests of their constituents without having to acquiesce to a London-based party machine. Our pensions policy also lets people know that there is an alternative to the cuts-based agenda of the big three UK political parties - there are some candidates out there who will speak up for some of our most vulnerable people.

Why the striking postal workers deserve our support

It may be an inconvenience and it may cause major problems for some, but this week's postal strike was unavoidable. Royal Mail's plans for the 'modernisation' of the service, if implemented, will end postal services as we know them.

As Billy Hayes, leader of the Communication Workers' Union (CWU) has said:

"right now we can't avoid a dispute about the heart and soul of the future of mail delivery. It's important that the public know that Royal Mail are running down the public services and we are determined that this will not happen. Running down those services has meant running down jobs and terms and conditions of the workforce. It also means you will pay more for a worse service and be expected to pay for one you currently get for free. This can all be reversed - mail is not in serious decline, despite what the company claims."

At the Plaid conference last month, a motion opposing the privatisation of the Royal Mail was passed. The CWU are not opposed to modernisation. All they ask is that their members are involved in the plans, and not bullied into accepting proposals which will privatise their industry and downgrade their terms and conditions, should they be lucky enough to hold on to their jobs. The CWU are ready for mediation, yet Royal Mail bosses refuse to talk through ACAS.

Compass have come up with proposals to save a public mail service which include the creation of a people's bank using post offices, a call which has been supported by my colleague Dai Lloyd.

Like the bankers, Royal Mail bosses have been creaming off hefty bonuses while the company squeezes the workers and customers. It'll be a long and tough fight, but anyone who values our public mail service should back the postal workers in this dispute.