Political Football

by • September 15, 2013 • Political footballComments (4)581

Since this blog began in June, I have consistently condemned the austerity policies of the

Assemblypresent government. That, of course, is the easy part. It is always easy to rubbish other people’s ideas and to find holes in their arguments. It is harder to put forward constructive proposals as to what should be done instead. However, it is somehow wrong to just criticise someone’s ideas without suggesting alternatives. So, if the austerity policies of Cameron and Osborne are wrong and for millions of working people in Britain today they clearly are, what else could be done? Having attended the excellent and very well-attended North East People’s Assembly on 14th September, here are some jdeas that were mentioned by speakers as  ways forward which the government could be taking.

Firstly, let’s debunk the myth that a deficit is always bad.  Our economy has actually only had a surplus in 6 out of the last 35 years, years which have seen right-wing neo-liberal economic policies imposed upon the British people. Deficits can cause problems on occasions, but the idea propagated by the likes of George Osborne that getting the deficit down or eradicated  is all that matters is simply not true. After all even Thatcher ran an economy working with a deficit.  Working with a defecit, whilst stimulating sustainable, environmentally-friendly economic growth is a better way of going forward than simply squeezing money out of the economy.

Stopping the planned cuts is another alternative. George Osborne in his speech on 10th September, along with some right-wing commentators, have recently fallen over themselves to hail recent growth, still shockingly less than 1%, as evidence that all is well. It is not so for millions of working people who are still struggling to make ends meet. And even the tiny growth we have seen recently may well not be maintained as savage cuts proposed to start in the near future come into effect. Let us also not forget that these cuts will disproportionately affect the most vulnerable in our country. Is that really the kind of society we want?

One important measure as an alternative to austerity would be to restore housing benefits. At the same time it is only common sense to introduce caps on the rents landlords charge.  At the end of the day housing benefit does not go to the claimant – it goes to the landlord. Why should greedy landlords be able to benefit from this? Thatcher removed the structures which ensured fair rents and a cap on rents should be introduced immediately. After all if such a measure is good enough for the citizens of Paris, Berlin and New York, it should be good enough for us. This would have the advantage of both cutting the benefit bill, without making tenants suffer and giving greater spending power to tenants who are in work, so helping to bring about further economic growth.

One alternative to austerity mentioned was to reduce VAT by 2.5% This can help to stimulate the economy. VAT should not be increased until unemployment is down to 4%. At present, the unemployment rate is still over 7% nationally and 10.4% in our region. VAT has traditionally been the tax which has been used to hammer the poor and as it is used on so many essential commodities any further increase would only add to the suffering so many families are already going through at present.

Another straightforward alternative would be to increase the minimum wage to £8.50 per hour. Before it was introduced there were scare mongerers on the right who claimed that it would lead to massive job losses. It didn’t and an increase in the minimum wage wouldn’t hit jobs now. On the contrary, what an increase in the minimum wage would do is to help increase demand.  If we are going to fight our way out of the economic crisis we desperately need real growth in the economy. Osborne’s artifical growth courtesy of a house price bubble in the Southeast isn’t delivering this; an increase in aggregate demand would.

There is also of course the moral argument in favour of increasing the minimum wage. After all, I sometimes watch news items where experts speculate on what it would be like to live on Mars. Might it be more useful to spend more time considering what it’s like to live on £53 per week?  Let us not forget that Ian Duncan Smith ducked the challenge of living on benefits for a week. This cabinet of millionaires would never be prepared to go through what millions of Britons have to go through day in, day out, for months and years on end, whether on benefits or pitifully low wages. At the North East People’s Assembly, Beth Farhat the new Regional Secretary of Northern TUC pointed out that one in three children in our region are growing up in poverty. That is a shocking statistic as is the fact that Save the Children are now operating in Britain, whilst churches across our region regularly take in tins of food for local food banks, along with the collection plate. None of this has to be.

If you want to bring more finances into the government coffers then that could be simply done by reintroducing the 50% tax rate. Of course this might upset Adele, in light of her immature and misinformed little rant in Q magazine earlier this year and might even mean some wealthy bankers having to sell one of their yachts. However, it would also mean that we were truly ‘all in it together’ at least a little. It would also help to provide the money for some of the other measures, which could help to provide people with real jobs.  At the end of the day how many millions of pounds do you need to get by on?

One area where jobs could be produced with this extra revenue would be to help councils build good standard social housing. There has been a dearth of good standard social housing built in this country, since Thatcher introduced the right to buy rule in the 1980s without allowing councils to use the profits to replace houses sold with new council housing. After 30 years of this ridiculous situation, it is little wonder that we have a crisis in affordable housing. Nor is it any great surprise that the right-wing have turned to scape-goating immigrants instead of facing up to their own failures to provide decent quality housing for British people. Building decent homes could solve a number of problems in one fell swoop.

As mentioned earlier, in our proud region, arguably the cradle of the industrial revolution, we are faced with one in three children growing up in poverty, the highest rate of poverty in the ciountry along with the highest unemployment of any region in Britain. With a crisis like this we need to prise at least some of the economic levers away from Westminster.

One simple way of doing this would be for state-funded regional investment banks to be established, especially in regions such as our own, to help small and medium sized economic ventures. Would this work? Well they have such regional investment banks in Germany, Italy and France, so why not here?  We desperately need working people in our region to be given more control over their economic futures. History shows us just what great feats we can achieve here, but only when given a level playing field.

It seems to have gone off the radar somewhat since the tragic failure of the Copenhagen Climate Conference in December 2009, but climate change has not gone away. Indeed as every day goes by, the situation is getting worse. Intelligently targeted green investment would help to tackle this problem. This is particularly pertinent in our region. We are often credited with giving ‘carboniferous capitalism’ to the world as arguably the planet’s first developed industrial coalfield. At the same time we could be seen to have begun the worldwide trend towards pumpiing the gases produced by fossil fuels into the atmosphere.

It is therefore somehow very fitting that we are now in the vanguard of developing sustainable renewable alternatives to using fossil fuels. We still have the skills from the old days of shipbuilding and there is factory space ready to use in North Tyneside to build blades for offshore wind turbines, which could start to provide a serious amount of renewable energy. All that is needed is the political will to develop this kind of industry in our region and indeed across the country. What is certain is that we need sustainable alternatives to short-term fixes such as a false house price bubble in London; and we need alternatives which will not make life more difficult for generations to come.

Other alternatives involve not spending money in ways which this government seem determined to do. Back in the 1960’s the progressive and potentially transformative Great Society programme of President Lyndon Johnson, which could have pulled millions of Americans of all races out of poverty, was derailed by American involvement in the folly that was the Vietnam War. As Dr Martin Luther King put it, “the bombs dropped in Vietnam, explode at home”.

Fast forward to 2013 and we see that until they were voted down in parliament, Cameron, Osborne and the rest of the government were determined that we should go to war in Syria. How many hundreds of millions of pounds would this have cost? For that matter, how much did our involvement in Libya cost in 2011, whilst Cameron and Osborne were pleading that there was so little money left for public services? It’s funny how the right-wing can always find money to harm others in foreign wars but not for helping their own people. Call me cynical, but I suspect that the rush to war in both Libya and Syria shows that money for public services IS available, but for ideological reasons, this dreadful government do not want it spent on improving the quality of life of millions of British citizens.

On the same lines we have too look at the billions that are going to be spent on a replacement for Trident. Here we are talking about a replacement for a deterrent which was developed during the Cold War. Er, didn’t the Berlin Wall come down nearly 25 years ago?  Now I understand the argument that with greater nuclear proliferation, we need to be able to defend ourselves. However, what I have never understood is why we need to have enough nuclear weapons to destroy a potential enemy many times over. Er, wouldn’t once be enough?  Unless of course it was all a big scam whereby the manufacturers of the nuclear weapons paid millions of their profits from tax-payers funding, back into the Conservative Party through donations. Perish the thought! Oh and then there’s all that radiation from our use of weapons in the atmosphere, heading back our way blown around by winds in the upper atmosphere going in many directions. As they tend to do.

Closing tax loopholes effectively could save millions of pounds annually and bring money back into our national economy currently lying useless in dodgy offsore accounts held by the super-rich. Whilst the tabloids bang on about benefit cheats, the amount of money lost to the exchequer in the rich not paying their taxes properly is many times greater. Not that you will read about that, in the Daily Mail, the Daily Express or The Sun!  It is high time that the super-rich made their proper contribution to the good of society. After all let’s face it; in most cases they haven’t EARNED their vast wealth. They have made it – more often than not by exploiting the working people who have worked for them and been the real wealth creators. It is time they paid their taxes; ot faced serious consequences. And that isn’t  ‘class hatred’ ot ‘the politics of envy’. It is simply justice.

Similarly ending the appalling nonsense of speculatlng bankers getting huge bonuses for gambling with our hard-earned money has to be done. Now. For once and for all. Proper regulation of banks, the kind which served us well before the Thatcherite deregulation in 1987, would also be a major step forward. Let us never forget; the economic crisis of 2008 was worldwide and was caused by the banks speculating with our money – not as a result of too much government spending as Osborne likes to claim. If what Osborne likes to claim really was true then how come the crisis hit countries across the world, including the United States, when they were still governed by the right-wing government of George W, Bush? No, it was the banks who caused the crisis and they must never be allowed to do the same in the future.

Then we can also save money through renationalisation. Yes, that’s right, save money. The success of our own East Coast mainline trains proves that. At present we have taxpayers money going to subsidise privatised rail companies, at four times the rate, which ever went to British Rail and all these subsidies are going into private hands, whilst we have the highest rail fares in Europe. Common sense says bring the railways back into accountable public ownership

And the same goes for other public services, whilst the Royal Mail should be kept in the public sector. Taxpayers deserve their money going towards real improvements in public services, not feathering the substantial nests of wealthy shareholders.

As mentioned on this blog before, 5.5 million people in Britain today may not be officially unemployed, but are suffering under zero-hour contracts, with our very own Mike Ashley one of the main culprits. These contracts, which belong to a Charles Dickens novel, should be outlawed immediately. For a start they are causing a great deal of stress and anguish for those who are working under them. Secondly, in terms of the wider economy, the uncertainty facing people means that are not spending as much as they would otherwise, so helping to kep aggregate demand down. How can you possibly plan your future spending, when you have no idea how much you are going to earn from day-to-day?

At the end of the day, none of these ideas are particularly radical, so let’s end with one proposal which is a little more radical; but just as much comon sense .  One final alternative to austerity is to introduce a policy of full employment. Yes, full employment. This can be done in the creation of real jobs in areas such as social care and the environment. It’s not as if there isn’t work that needs doing. But how would this be done? Well, you could start by using the billions from closed tax loopholes to produce public sector jobs. Once this was done, this could increase demand for goods from the private sector and so produce more jobs in that sector too. An impossible dream? Couldn’t be done? Yes, well there were some who said the same about the foundation of the National Health service in 1948 and that was in a time of even greater economic difficulties, at the end of a six-year war against fascism, than we have today. When the political will is there, it is amazing what can be achieved.

As I finish this I am watching the coverage of the Great North Run on television. Yet again we are seeing the real spirit of people in North East England and across the country. All those running for good causes and all the spectators cheering them on in the rain, represent who we really are. We do care about each other and we do believe in society – as something far more meaningful than Cameron’s empty slogan of a few years ago.

Lets’s face it. Austerity is not working for the majority of British people. But then it was never meant to do so.  The economic crisis, caused by the greed and speculative habits of vastly overpaid bankers, has been used from the outset of this government as a smokescreen to push through a series of deeply damaging policies, for which, let us  not forget, they have no elected mandate. The relentless attacks on public services, deliberately denigrated and starved of funds by this callous government, give the game away. There are many common sense, feasible alternatives to austerity and the sooner we have a government prepared to turn them into government policy the better.

© Peter Sagar September 2013 

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4 Responses to Political Football

  1. Bob says:

    The tax system needs aggressive overhaul, not just reintroduction of the top rate.

    A land value tax would be a good start to replace income tax.

    Tax wealth, not income

  2. mikey says:

    I agree with much of this but i really don’t think the ‘people’s assembly’ is the right way to go about things. I attended one and it seems to me like a staged attempt at politics organised by the same old familiar faces in the background.

    There are a lot more interesting things happening outside of parliamentary style old politics in my opinion. I also don’t think that these policies will ever be adopted by any of the major parties. If they were our entire economic system would have to change (which, while i’m absolutely in favour of will never happen unless it forced to happen by politics from the grassroots).

    I am more in favour of self organisation and forcing the hand of bosses to pay more wages, eviction resistance to the bedroom tax to make it ungovernable and street protest to raise the political stakes for example.

    Most of what we’ve won down the centuries was never packaged in a policy but won by working class people organising collectively and becoming powerful enough to *force* things to happen. ‘Democracy’ and party politics, IMO, is a bit of a sham.

    Good piece though, and love the political spot on the site.

  3. mikey says:

    Also, on your last point about full employment. How about a guaranteed income and then people would be free to actually be creative in how they live their lives and contribute to life of society, family and community. This is seriously being talked about some European parties.

    surely better than this … http://www.strikemag.org/bullshit-jobs/ 🙂

  4. Niall Fleming says:

    Running a deficit for thirty years is not a good idea. The real issue, however, is that it isn’t necessary.

    The treasury problem is not controlling expenditure, although it would be easier if we did without things like £6 billion a year (7% of the annual deficit) on Afghanistan and Iraq. The treasury problem is collection of revenue.

    Some taxes are not only ineffective, like Corporation Tax, but are actually strangling the economy, like VAT. What idiot came up with a tax on value added?

    Some of the taxation system is mad, 40% of working family tax credits go to people on the public payroll!

    So yes, massively increase the minimum wage, because not only will it put money in people’s pockets, it will bring in more tax from Amazon and Google and other Corporation Tax avoiders. Reduce Corporation Tax, to offset the additional tax being paid by SMEs, it won’t affect the big companies who aren’t paying CT anyway.

    Apart from Insurance Premium Tax there is virtually no indirect taxation in Financial Services, which is a massive part of the economy. So VAT bears down totally on the consumer, and disproportionately on the low wage consumer.

    So put a VAT style transaction tax into Financial Services, and reduce VAT by an equivalent amount. Spread indirect taxation more equitably across the economy.

    Start the shift into genuine insurance based social provision. The Dutch have been doing it for years. Their National Insurance is broken down into relevant categories, Unemployment Protection, Health, Pension etc and you can look at any time at exactly where you stand in terms of cover or funds, and you can opt to pay extra if you are flush. The Government tops up where you are out of work. Your money is, so to speak, yours.

    Create a sovereign wealth fund (forty years after the Norwegians did it) around our energy industry. Use it to exploit our inventions. Two examples of the many where we lost out, the Search Engine was invented by a guy at Stirling University FIVE YEARS before Google got into the game. The University wasn’t able to fund his work. Ten years ago we led the world on clean coal technology, and we are sitting on 300 years worth of the stuff. Now we think it is a really smart idea to buy gas from Russia.

    Stop the HMRC drive to have the self employed paying tax at the same rate as the employed. Let them have a break, perhaps 5%, to encourage them rather than beating them down. Fund it by increasing the top rate of tax to 50%, as Theo Paphitis said, at rate of 50% doesn’t concern or worry him or influence where he invests his money at all.

    Rant over.