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  June 5, 2017

Sluggish Economic Growth in Britain Fails to Compensate for Austerity


Kam Sandhu, co-founder of Real Media, explains how slow economic growth means that Tories have not been able to achieve any of their economic objectives and have instead caused a "food bank crisis"
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biography

Kam Sandhu is a journalist and the co-founder of the UK-based Real Media.


transcript

Sharmini: It's the Real News Network. I'm Sharmini Peries coming to you from Baltimore. The UK is now the worst performing advance economy in the world. This is according to the Independent Magazine. This announcement, that growth has slumped and just 0.2% in the first three months of the year, comes less than a week before the UK general election.

Joining us today, to discuss the UK economy as it relates to the British general election, is Kam Sandhu. Kam is an investigative journalist, and editor, and a co-founder of the UK based independent media outlet, Real Media. Kam, thank you so much for joining us.

Kam: Thanks for having me back. It's good to see you.

Sharmini: Kam, the article in The Independent seems to suggest that the UK was doing well before the Brexit. How do you respond to the latest economic figures that it reveals?

Kam: I think there's probably a little bit of myth busting that we need to do about the growth that was happening beforehand, because this is something that the Conservative Party have relied on saying. "We've had really, really great growth." which is true, but it really depends on how that growth is shared out.

Danny Dorling gave an example. Let's say me and three of my friends, we earned one pound a week and then we grew to two pounds a week. That's a 100% increase. However, if I take 80% of that extra money and the remaining 20% is divided between my other three friends, or colleagues, or residents, that doesn't mean that that growth is being felt by these people.

During austerity, we've seen a transfer of wealth going up to the 1%. It means that when we see this growth, it's not actually being experienced by British people who are struggling with rising living costs, struggling with stagnant wages, which is a really big problem in the UK. Also, it's destruction really of worker rights through massive take up of the zero hour contracts, which are able to circumvent holiday pay, maternity leave.

Sharmini: Just explain the zero hour contracts to people before you continue.

Kam: Zero hour contracts are when, for example, if I worked ... They were originally used for inconsistent work. Let's say that you work in a pub and you're free some weekends and you're not others. You might have a 10 hour job one week and a five hour job the next week. That might be totally okay with you.

However, in the last few years, we've seen a huge take up of that kind of contract. It's being used in resale and other sectors where it's never been used before. It outstrips even the kind of estimates that the government had. I think in 2014, they estimated about 250,000 zero hour contracts. The true figure was over 500,000. It's really out blown what even the government thought was happening. It now stands at almost a million people on these contracts.

When the conservative governments say that they are getting lots more people into work, that's true. They aren't getting the hours that they need to live off their income and they're not getting paid the kinds of wages as a result of a stagnant minimum wage and pressures on wages that remain after seven years.

The Financial Times report is in, in March, that the UK was the only country to experience that growth and yet have maintained such low wages. It is a political choice. I think that's something that people really need to get their head around.

Sharmini: When it comes to the government record, what are the officially stated targets regarding both deficit and debt in the country in terms of these figures we are referencing?

Kam: I'm sure this is not something that the Conservative Party would like to talk about at the moment despite the fact that Amber Rudd said that people should really judge them on their record. They have failed at meeting any of their targets that they set themselves.

One famous one set by George Osborne, when he was chancellor, was that he would half the deficit by 2015. That hasn't happened. Yet, at the same time, our debt has doubled in seven years of a conservative government. That's doubled in the time that it took labor 13 years to create the same amount of debt.

At the same time, we've had all this austerity. We've had one million people now needing food banks. We've got three and a half million children living in poverty. What is there to show that these austerity measures that are taking place? The truth is not a lot.

The conservative government is running off this ages old thing that they are fiscally responsible. People believe that they need to take these measures, to take these cutbacks, to get within living within our means, which is rhetoric that the Conservative Party have used.

What they've actually done is completely strangle any kind of investment that should have been taking place during times of crisis and even stopped putting money into things that would have created even better income. Really, the Conservative Party have failed on many, many counts of what is meant to be their strongest subject, the economy.

Sharmini: Kam, during a recent election debate in which home secretary Amber Rudd stood in for prime minister, because she refuses to debate and she refuses to debate Jeremy Corbyn in particular. Anyhow, Amber Rudd stated that, "There is no magic money tree to solve the food bank crisis." Following that, a music video has gone viral on social media reacting to the comment. Let's play it a little bit just so people get a sense of it. [Song plays 00:06:09 - 00:06:55].

Kam, you probably, in the UK, and others there are very familiar with the food bank crisis. We here on this side of the pond isn't. Tell us a little bit about what the food bank is, what the crisis is, and what you think of Rudd's comment she made in the debate.

Kam: Yeah, the food bank crisis that we've had here has happened completely under the conservative rule since they came in, in 2010. I think at that time, we had about 40,000 people needing food banks. Food banks are places that supply you with free food. This is canned stuff that will aim to get you through three days worth. This is dry food, soups. We're talking beans. We're talking canned preservatives. These are for people who aren't able to access food in any other way.

That was 40,000 people in 2010. We now have about a million people needing food banks regularly. The main reason that people have given for needing a food bank is cuts to welfare, or delays in welfare. This has come as a result of massive changes under Iain Duncan Smith, who was working pension secretary. He's blamed for a lot of the changes that have come here that have essentially destroyed people's ability to get by on benefits.

Their conservative government said that they were going to be harsh on benefits, because they wanted to make work pay and that people should go out and look for work. They really run off that moral idea that people who contribute to society are the only ones who were really, really deserving.

That's had negative effects on welfare claimants and disabled people, who are facing increases amounts in abuse, verbal abuse and physical abuse, because of this rhetoric of scroungers, or layabouts, or whatever the colloquial term you want to use.

However, 90% of people who claim benefits are in work. We have record levels now as a result of things like the zero hour contracts of in work poverty. These are people who are in work who, as I said, are unable to afford getting by. These are the same people that the Conservative Party used to say, "We've created jobs." Yet, they're the same ones who continue to struggle and have to battle the rhetoric that the Conservative Party have been at the helm of spreading.

Sharmini: First, it was taking food from the kids at school. Now, from the food banks. Give us a sense of how all of this is tallying in terms of the latest polls and the upcoming election.

Kam: Yeah, just to note that I didn't comment on Amber Rudd's comments about the money tree. This, I guess, will play into how the conservatives are being viewed at the moment. When Amber Rudd was at that debate, and she says, "You need to judge us on our record." there was laughs from the audience. I'm guessing that many of them are aware that they have failed on all these targets. This idea that there is ... We need a magic money tree to be able to invest in things like the public health service, to invest and get people out of food banks when only six, or seven years ago these people didn't need these places.

At the same time, Amber Rudd is involved in two off shore firms in Panama, which we might have picked up that was the reason that the artist taxi driver in that video was singing about these things. There are so many people, politicians, and people in the Conservative Party and people who donate to the Conservative Party who seem to not have their money tree, taking these tax savings, challenged.

I think the hypocrisy of what's being said, the justification of why we need to carry on being harsher on the British public and not these tax avoiding companies I think is starting to annoy people really. What we've seen recently is ... I've just seen a poll come in just before I came on here.

It seems that actually support for Jeremy Corbyn is now higher than it is for the current government. Theresa May, as a result of her fact that she's been hiding, this is incredible scenes that we're seeing.

The prime minister, who called an election six weeks ago, because she was going to be strong and stable is hiding from all debate. She pulled out of a radio interview with BBC radio for yesterday. There were reports that she said that she wasn't going to take part in any of the local BBC radio stations, of which there are 40 while she's going around on this campaign.

She's showing real cowardice in presenting people with what she's going to do with one of the biggest, most important times that we have, which is deciding what's happening during these Brexit deals. It seems that the arguments that they are using aren't working on people anymore. Considering that when we started this election campaign, there was 20 points between the conservatives and the labor party. Now we're seeing those come ever closer.

I think the closest we've seen is about three points between them. That happened after that debate where Amber Rudd showed up instead of Theresa May. That's how that debate will be remembered.

I think if Theresa May is going to be able to turn anything round, she needs to show up, otherwise I'm afraid I don't think that they're going to be able to recover from this pretty disastrous, it's looking now, campaign.

Sharmini: Kam, we look forward to speaking with you next week, the day after the election next Friday. Thank you so much for joining us.

Kam: I'm looking forward to speaking to you again then.

Sharmini: Thank you for joining us here on the Real News Network.



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