Tory Shadow Chancellor Mel Stride wants to take £47 billion out of the UK economy — mostly by cutting benefits for migrants and those with mental ill health. That isn't prudence. It's managed decline.
In this video, I explain what really happens when you cut money from the poorest: demand collapses, jobs vanish, and resentment grows.
The truth is simple: spending creates income, and austerity destroys it.
I make no apology for this rant.
This is the audio version:
This is the transcript:
What happens when £47 billion disappears from the UK economy? I ask the question because Mel Stride, the Shadow Chancellor of the Exchequer in the UK, is proposing that he would take £47 billion out of our economy, and he wants to do so in a number of quite absurd ways.
He wants to take away benefits from those who have indefinite leave to remain in the UK because, as he well knows, most of those people he would be hitting are either Indian or Pakistani, and he's a racist, and he wants to promote this idea to appeal to a racist audience, which he believes is moving from the Tories to Reform.
He's also promoting this idea because he believes that those with mental illness are subhuman compared to the superhumans who populate the Conservative Party, and who he thinks will vote for it. And therefore he wants to take benefits away from those who are suffering with mental ill health to again, punish them for the fact that they simply aren't the white superhumans who he believes everyone should be.
But what are the consequences of taking £47 billion out of the economy? Because it's at this level that Mel Stride is also showing his absolute, outright stupidity, and I can't think of a better word to describe this than that.
If you take £47 billion out of the economy - whether it be over one year, five years, or whatever period he's talking about, and let's be honest, whatever number he comes up with is made up and probably inconsequential because the chance that Mel Stride will ever be in office ever again is pretty darn low - but whatever it is, the fact is that when you take money away from the poorest and most vulnerable people, they can't replace it by working.
They get that benefit because they can't work. They're not able to do so. They have a real need. It is incredibly difficult to get most of the benefits to which Mel Stride is now referring. You have to go through an enormous number of interviews, appeals, and everything else to be paid. And yet he thinks that somehow people are free-riding the system.
They aren't. They can't work. They won't work.
So the consequence of taking that money out of the economy is not that he's going to force people back into work, which they can't do, and for which there aren't employers who want these people anyway, it means that there will be meals not bought. There will be rent not paid. There won't be jobs created. The money will go.
And in fact, it's worse than just having the first order impact, of course, because if meals aren't bought and rent isn't paid and other goods and services aren't acquired, then the local economies of the UK will be hit because that's where people on benefits spend their money.
He might think that he's being oh so clever, following the household analogy and believing that just because he cuts the money out of his Treasury spreadsheet, it's gone for good and the problem is solved, but it isn't.
The fact is that when he cuts spending, it has knock-on multiplier effects.
It's not the City that will feel those multiplier effects. It's small towns.
People will not be spending money in local shops.
There won't be people who can afford to buy care.
There won't be money to pay for youth centres because there won't be people paying council tax.
Every £1 lost costs several more in local activity once you begin to cut benefits for the poorest.
The fact is, it is this multiplier effect that Mel Stride appears totally unable to understand, and he still hasn't understood after 14 years of Tory mismanagement that austerity isn't prudence, it's about managed decline, which is exactly why this country is in the mess that it is.
The reality is that state spending creates income and cuts destroy it.
Once you understand the local multiplier effect and that the poorest have the highest multiplier effect of all with regard to their income, because literally every penny they get in benefits is pumped straight into the economies where they live, then you begin to understand why austerity is madness. But Mel Stride is still planning to cut money from local communities all under the pretext of racism and his loathing for people with mental ill health, who he thinks are subhuman, as fascists do.
This is what I loathe about what he's saying, and I can't pretend otherwise. It is his contempt for human beings which motivates my dislike of this policy more than anything, even though it's economically illiterate.
If you want growth, you invest locally.
What are the consequences of what he's doing?
Incomes will fall.
Demand will collapse.
Businesses will close.
Jobs will go.
Local tax bases will be eroded, and perhaps most particularly because this is now of enormous consequence, resentment will grow, fueling further division in the UK and more support for Reform, the one thing that he claims he really wants to defeat, but which he is deliberately, and apparently directly, trying to fuel.
If £47 billion can be removed from the UK economy, the fact is, if we understand economics, we also know that £47 billion can be added to the UK economy, because, of course, no government is constrained by its capacity to tax, which is why the cruelty that is promoting this cut is callous in the extreme.
But what this means is that other parties should be saying, "We won't follow the path down which the Tories are going."
We would expect Labour to say that, although of course they probably won't, because these days all they try to do is ape the far-right parties, whether they be Reform or Tory, and so they'll probably be offering this very soon.
But the fact is, other parties, those who have some sense left, whether they be the Greens, whether they be the SNP, whether they be Plaid Cymru or whoever it might be, they should be saying, "We are going to fund local councils and communities. We are not going to be racist about this. We are going to help people who can't work. The real issue isn't affordability. It's all about priorities, and the priority in this country is action to help those who need it and not to impose more austerity."
Mel Stride has got everything, and I mean everything wrong, including the fact that he's playing straight into the hands of Nigel Farage.
Taking further action
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Not to mention the huge impact on NHS and the police service as people get sicker, and more and more desperate turning illegal activities and violence
Mel Stride is my MP! He doesn’t run a constituency office or do surgeries and he’s not quick to respond on email. My first experience of him was at a local hustings where he was arguing with local teachers over the reality of the funding situation in Devon which is dire and saying it was fine! This was 2017, when he still had a very safe seat. At the last election he thought he was going to lose and was much less antagonistic. He won by about 51 votes!
He’s not thick, but he does seem to be getting more and more desperate in his pursuit of power. Thankfully the Tories have zero chance of getting back in power in the near future and they don’t even have much influence over the current government or the media. They just come across as more and more unhinged. His views on mental health I find particularly abhorrent, as more funding and support would enable people to work and his attitudes force people out of the labour market and make it very hard for them to return. A loss to their wellbeing and society as a whole.
Thanks
Thickness as in clueless is, I think, measured on a different scale to that of intelligence.
To me, Stride is, as his leader was in her interview on Today this morning, little more than a political clown – a dangerous clown if ever near power again – but a clown all the same.
Time for a rant! It would seem fair enough to say that Britain’s managed decline is a consequence of “Little Picture” politicians primarily from the Conservative, Labour and Reform parties. A good example of this mentality is featured in today’s Independent where the line is being floated by the Labour government that investors (the rich) won’t be investing in the country if taxes are raised higher on the rich:-
https://www.independent.co.uk/news/uk/politics/rachel-reeves-budget-wealth-tax-b2837878.html
This of course gives these Little Picture minds sanction to increase taxes on everybody else (especially the poor and disabled) to pay for the rich to increase their wealth regardless! It of course never occurs to the Little Minds that supply and demand are entangled and over-taxing the non-rich reduces demand to create economic decline. Something, of course, the rich don’t like either because there’s less profit to be made. Of course, the Little Picture politicians in these right wing parties are in denial that much of government spending is top-up benefits due to inadequate wages and it’s this that needs to be addressed. Global trade too needs action and that means re-joining the EU a large trading bloc that potentially has clout to deal with China and the United States.
“..because these days all they try to do is ape the far-right parties,..”
Labour are not aping the far right; they ARE the far right. This is a fact now which can no longer be excused or denied. Everything Labour does screams ‘fascists’.
There’s no hope that the Labour Party of old will return. They’re bought and paid for and have no interest in the UK public especially not the young, the elderly, the sick or disabled (or kidnapped humanitarians, in international waters, trying to deliver food to deliberately starved Palestinians). I doubt Labour even has much time for workers any more. That doesn’t leave many people does it; just the elite.
The Labour Party personnel have corrupted what Labour originally stood for. It’s so far removed from the founding principles that it doesn’t have the right to call itself “the Labour Party”.
Not a single journalist will ask that question of him. Not one.
I used to work for a local authority that was basically run by ‘former rent collectors from what used too be the citys coal mining district’ While they were not over burdened by formal education they did realise the impact of running benefit take up campaigns back in the mid 1980’s as the money got spent in the local economy.
Something it seems that those with a First from Oxford in PPE dont seem to grasp.
The bellicose ending of his speech was enough for me to know that the man is a complete numpty, living as most Neo-libs do in the comfort of his own little world.
Compare that with the Tories own Prince of Darkness – one Robert Jenrick – a human being so appalling that there is not one organism on earth you could use to describe him because nothing is as thoroughly evil as he.
He needs to be watched. He’s bad news.
It was pathetic. Shouting at an audience in a room 80% empty.
As Alice said in either Alice in Wonderland or Through the Looking Glass ” things are getting curiousoter and curiousoter”.
The PPE factory strikes again. Another Oxford PPE graduate, Mel Stride, exemplifies how the PPE course in particular keeps producing institutional psychopathy: clever rhetoric, zero empathy, and theory blissfully detached from real-world consequences.
🙂
The sad thing is Mel Stride is not from the usual PPE background. At hustings he’s very proud to share that both his parents left school at 15 and thanks to the 11 plus he had opportunities they never had. He is convinced that it was his grammar school education that he got to Oxford. It was hilarious when this statement was followed by the Green candidate sharing he went to a comprehensive and it got him to Oxford!
My 12-year-old son understood this through simple rationalisation. We were in a shop yesterday and he saw the headline about the Tories cutting billions from benefits, as though it were a good idea. He asked, “Don’t they realise where people spend their benefit money, supermarkets and shops will get billions less income.” I nodded, and he went on, “And if we all have to feed these people through food banks, won’t everybody have less money to spend on other things?” He then raised the point that I had said that the increase in shoplifting was due to professional shoplifters stealing from shops and selling to people on estates who can’t afford retail prices. It was directly linked to poverty. “Surely,” he said, “rich people and businesses would want people to have benefits as they get that money eventually, and lose money through theft if they don’t.”
12 years old and actually thinking more clearly than the idiots in charge.
Spot on.
Keep him thinking.
We need thinkers.
Just keep him away from economics courses.
Taught what to think not how to think.
Yet another example of judging those considered different, judging those considered beneath the person making the statement and showing absolutely no empathy for those who need support. To quote a phrase, it really boils my p**s!!
Evil doesn’t even come close to describing it.
Perhaps Stupid Stride (or Moronic Mel) is auditioning for a move to Ref**?
Craig
Labour’s stance isn’t expansionary either. It keeps:
• Tax thresholds frozen – a £38 bn stealth tax by 2029
• Employer NI higher – about £25 bn a year
• Welfare and disability cuts – around £5 bn
• Departmental budgets tight – £6 bn trimmed in real terms
Both parties are running contractionary economics: one by open austerity, the other by stealth.
Different language – same outcome: less money circulating, slower growth, greater inequality.
I won’t go into particulars about who deserves money and who doesn’t, but I do agree with your premise that taking money from the poorest causes demand collapses, job losses, and growth of societal resentment/anger. I agree that we must look after those in our society who are at the ‘edge’ and need assistance, we have a moral and economic obligation in such regard. The UK will only be as strong as our weakest link, and we have a tremendous amount of fantastic people who just need a fair chance and a job.
Thank you Mr. Murphy, I appreciate your sane opinion on this matter. MP’s of all parties should read this particular article of yours.
It’s a pity that the University of Oxford isn’t looking critically at what it’s PPE graduates are doing and considering if they should change the course
A flight of fancy about what hell might be (inspired by this post):-
On death, the shackles that surround and limit the mind disappear. You can see all of your life in great detail, all you said, all you did.
But you are not seeing it from your point of view, you see it from that of those that you have, directly or indirectly, affected. It’s all there, on continuous replay forever more. You have no option, you cannot escape, there’s no let up. It’s not only on replay, but their feelings are there too in glorious technicolour from everyone on the Tally List against you name; it’s all there – forever and a day, the pain, the anguish swamping any positive effects you may have imparted.
There’s nothing to lift this from your soul, negentropy doesn’t flow where you are in your zero state.
Just heard James O’Brien say that many of the indefinite right to remain can draw benefits because of the EU settlement. I was driving so may have missed something but he quoted a July Sun report which has just now October -! -printed a retraction. Instead 1.3 million the who could be targeted to ‘save billions’ it is about 100,000 , the others being covered.
And you say you’re not a socialist!
Bravo.
This is straight from the neoliberal playbook: defund public services, break them, privatise them, profit from them.
It is astonishing that there are still gullible politicians willing to implement them.
Read: The Shock Doctrine: The Rise of Disaster Capitalism by Naomi Klein
https://amzn.eu/d/9zQX9TY
I thought of this phrase a few years ago and I have not seen it used (although maybe it has). It is ‘trickle UP economics’. We know trickle DOWN economics does not work. It is something that might stick in peoples minds – a bit like ‘stop the boats’ does – but it is a bit more honest.
Why not cut the benefits bill by making companies such as Teaco pay their employees enough to live on without claiming benefits. Has anyone ever calculated how much this would save?
Maybe it should be the companies that t claim benefits instead of there employees.
They already do.
https://www.corporate-welfare-watch.org.uk/2018/05/01/report-british-corporate-welfare-state/
But it’s kept well hidden.
One could estimate the quantitative effect of a £47 billion cut.
UK GDP, about £2.5 trillion. £47 billion is about 0.2%. So the direct effect of cutting £47 billion would be to reduce growth by about 0.2%. Exactly as @Tom B’s son said.
But wait, there the multiplier effect. Say, conservatively, that is a factor of two. That raises means growth would be reduced by 0.4%
For a party that (falsely) prides itself on economic management and lauds growth, a policy that reduces growth by 0.4% seems particularly stupid.
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