Welsh Labour MEP, Derek Vaughan, will launch a call for organisations across Wales to unite in a “Welsh Coalition Against the Cuts”, in a key speech to Labour Party members at the Racecourse Football Ground in Wrexham tonight (Friday, 17 September 2010).
He will say that a concerted, co-ordinated campaign is necessary to challenge the basic presumptions of the UK Coalition Government’s economic policy and articulate an alternative vision of how Wales can emerge from the financial downturn without permanently damaging key frontline services.
Welsh Labour MEP, DEREK VAUGHAN said:
"The Tories and the Lib Dems have been quick to use the deficit as a convenient cover story for savage ideological cuts and a huge reduction in the provision of public services.
By setting an artificial deadline of eradicating the deficit by the end of this Parliament, they have ignored basic economics and historical precedents. The decision is clearly motivated by cold, hard political calculation only.
False and exaggerated comparisons with other European countries made by the Con Dem coalition to justify such tough austerity measures show that they are prepared to say and do anything to get their way.
By using countries like Ireland, Portugal and Greece as yardsticks for how the UK should move forward is disingenuous and does not take into account factors such as differences in loan maturity rates and the type and location of the debts in those Member States. Meaningful assessment of the facts proves that the UK economy is far less vulnerable to short term speculation and fluctuation."
Mr Vaughan added that a sustained attack on public sector investment would not only create long term damage for people who relied on services but also increased the chances of a “double dip” recession hurting the private sector as well.
"Public spending in the UK is low when compared to many countries in the EU and not that much higher than that of the Tory Government of the 1990s. Interest rates and inflation are, in the wider context, also comparatively low. There is absolutely no reason, apart from confused, right wing dogma, why the deficit could not be reduced over a longer period, leaving room for investment in the public sector to stimulate the private sector, and using the lessons we have learnt to guard against a similar situation in the future."
Solutions on an EU and worldwide basis were needed for a strong and sustainable recovery, added Mr Vaughan:
"There is little evidence that the private sector is ready to pick up the slack or that exports will increase, particularly if our trading partners in the EU were to cut their own spending at the same time.
If major EU economies cut at the same time, total demand for goods and services decreases, making it harder for individuals and businesses to generate income. Forecasts suggest that this would cost an extra 4.5 million jobs by 2013 in the EU giving total unemployment of 30 million leading to dangerous social consequences as well such as rise of the far right. It is likely that the foundations of a recovery might collapse with slower growth & lower tax receipts making it even more difficult to deal with deficit."
Appealing to people in all parts of Wales, Mr Vaughan commented:
"Organisations across the country must now unite and put the case against the cuts with a force and vigour to protect those people who need public services the most.
Private and public sectors, trade unions, community councils, local authorities, MPs, AMs and others need to work together to build a sound base of support to force the Con Dem coalition to revisit their out of step ideas.
We face a huge challenge but it is one that I am confident we can face together."