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Reinforcing neoliberalism: crisis and austerity in the UK.................................................................................................................................................................(v) a new temporary Future Jobs Fund (approximately £1 billion),involving subsidies of up to £6,500 to employers who offered fulltimejobs to long-term unemployed young people; 6 and(vi) sustained growth in public spending (including more generoussupport through social protection spending, so-called ‘automaticstabilisers’). 7Figure 2 demonstrates that spending during 2008–2009 continued theupward trajectory in place since 1999. As a direct result, jobs in thepublic sector increased by 107,000 from early 2008 to early 2010,providing some compensation to the loss of around 980,000 jobs in theprivate sector. 8 Importantly, most jobs generated in the public sectorwere full-time. 9However, from 2010, spending dropped as part of an austerity package thatinitially sought to eliminate the structural budget deficit by 2014–15 and toachieve a declining public sector debt by 2015–16 through a mix ofspending cuts and tax rises designed in a ratio of around four to one(Treasury 2010). 10 The largest immediate percentage cuts (2009–10/2010–11) were in housing and community amenities (for example,house building and street lighting) and economic affairs (for example,economic development, including financial sector interventions). From6. Government data (http://research.dwp.gov.uk) suggest the Fund supported approximately92,000 job starts during October 2009–Jan2011.7. Around half the increased real total managed expenditures was due to the rise in socialprotection spending, an additional £28 billion of the extra £61 billion spent over thetwo-year period (adjusted to 2009–10 price levels). The other half was largely made upof continued increases in health and education spending (£11 billion and £7 billion,respectively) plus economic affairs (additional £6 billion), the bulk of which went toenterprise and economic development (UK Treasury data).8. The public sector data exclude reclassification of financial corporation workersassociated with the three nationalised banks (RBS and Lloyds in 2008 and NorthernRock in 2007). Data refer to the 24-month period from the first quarter of 2008 to thefirst quarter of 2010 and derive from ONS data ‘Public and private sector employment’and ‘Public sector employment including and excluding financial corporations’(www.statistics.gov.uk/statbase/product.asp?vlnk=8284).9. Estimated job change during this period in the sectors of public administration anddefence, education and health shows net growth of 154,000 full-time jobs and 121,000part-time jobs (see ‘Employee jobs by industry’, www.statistics.gov.uk/elmr/downloads/elmr6.pdf).10. The June budget sets out a total spending reduction of £128 billion by 2015–16,consisting of spending cuts of £99 billion and a net increase in taxes of £29 billion(Treasury 2010: table 1.1).A triumph of failed ideas – European models of capitalism in the crisis 45
Damian Grimshaw and Jill Rubery.................................................................................................................................................................2010–11, however, the cumulative cuts in social protection promise todeliver the single largest category of government spending reductions.Figure 2Average annual percentage change in real public expendituresfor pre-recession, recession and austeritytotal managed expendituresocial protectioneducationrecreation, culture and religionhealthhousing and community amenitiesenvironment protectioneconomic affairspublic order and safetydefencepublic sector debt interest2007-08 to 2009-101999-00 to 2007-08-0,04 -0,02 0,00 0,02 0,04 0,06 0,08 0,10 0,12 0,14Source: UK Treasury data, available at http://www.hm-treasury.gov.uk/pesa2011_section2.htm.The adverse impact of spending cuts is already proving to be damagingrecovery prospects. 11 The government blames weak global markets butour analysis suggests that public spending cuts are causing much of thedamage. Falling public sector incomes are not only depressingaggregate demand, but also causing a sequence of knock-on effects onthe private sector through interlinkages of outsourcing, partnershipsand subcontracting in the UK’s mixed economy. Moreover, it will provea great shock to the UK public services (and the economy) to suddenlyreverse more than a decade of average annual rises of 5 per cent inpublic spending that have shifted the balance in the roles of the publicand private sectors in generating labour demand. Moreover, theimplications of spending cuts vary significantly by region, such thatareas outside London and the South East are placed at significantlyhigher risk.11. The most recent OECD forecast at the time of writing predicts 0.1 per cent growthduring the third quarter of 2011 and less than 0.1 per cent during the last quarter (seewww.oecd.org/document/18/0,3746,en_2649_37443_20347538_1_1_1_37443,00.html).46 A triumph of failed ideas – European models of capitalism in the crisis
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Page 6: Table of contentsSteffen LehndorffI
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Steffen Lehndorff..................
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Florence Jany-Catrice and Michel La
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The Austrian model and the financia
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Hungary’s full-blown malaiseAndr
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Italy: Chronicle of a crisis foreto
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List of contributors...............
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EuropeanTrade Union InstituteBd du
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