It was good to read in a recent editorial not only how the public sector unions Unison, GMB and Unite have been advocating a "fair pay rise for council staff", but also how they have been arguing how the "net cost" for such a rise is far lower than the "headline cost" which the government uses (Star, 22/07/20). As a result of these workers paying more tax, plus spending more online and in the local shops which helps create jobs and thereby increases the Treasury`s tax income whilst reducing its expenditure on benefits, economic growth is increased.
These economic multipliers mean that none of the government`s spending pledges actually cost as much as they claim, which is why they ignore them, hoping unions and workers will not realise the truth. The same applies when infrastructure spending is announced, when the government`s figures fail to take into account tax returns that inevitably ensue over the years.
It is welcome news that trade unions are using economic facts in their arguments, but in truth, they should not be alone in doing this: it is the job of the Labour party and its leader in particular to challenge the misleading claims and figures used by the government, especially when the latter`s purpose is to deny much deserved and needed pay awards.
Johnson and Sunak will be telling voters about the immense cost of the furloughing without mentioning the multipliers which enable much of the cost to be massively reduced, or the recent £300bn the government received from the Bank of England`s quantitative easing. Throughout the coming weeks the Tories will ensure the media keeps "unsustainable borrowing" at the forefront of the UK`s news. Starmer`s team must ensure they do not use the Tory tactic of treating the voters as mugs, and take every opportunity to use economic facts to challenge the Tories` fictitious figures.
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