poverty

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Tax Cuts For The Rich, Benefit Cuts For The Poor?

Published by Anonymous (not verified) on Fri, 30/09/2022 - 11:05pm in

Following news that benefits may rise with earnings, not inflation, Sian Norris and the Byline Intelligence Team asks: who will be hardest hit? And is this an inequality economy?

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The Government has mooted real-term cuts to welfare benefits to help meet the ongoing economic crisis that was exacerbated by the mini-budget announced a week ago. 

The Timesfront page on Friday 30 September led with the story that the Government was discussing raising benefits in-line with earnings, leading to a real-terms cut that would mean households already struggling to make ends meet risk falling deeper into poverty. A rise in-line with earnings would be 5%, while inflation hovers around 10%.

The Byline Intelligence Team has analysed who would be impacted by any decision to introduce a real-terms cut to the incomes of families currently claiming welfare. 

We found that low-income women and people in their 30s, living in traditionally “red wall” seats, would be hit hardest by a decision to increase Universal Credit against earnings, not inflation. 

Our analysis comes as the Government delivers big tax cuts to the rich, while potentially cutting benefits for the poorest families, as well as threatening more cuts to public services.

This represents a move by Liz Truss’ Government towards an inequality economy. 

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What Is The Plan?

Universal Credit is the welfare system pioneered by former Department for Work and Pensions Secretary Sir Iain Duncan-Smith. In 2018 it was criticised by the National Audit Office which concluded it could end up costing more than the benefit system it had replaced, could not prove it helped more claimants into work, and was unlikely to ever deliver value for money.

Benefits usually increase in April each year, based on the consumer price inflation of the previous September. This meant that in spring this year, benefits rose by 3.1% – in line with inflation six months earlier. However, by April 2022, inflation had already risen to 9%, before hitting 10.1% in July. It is currently at 9.9%. 

Johnson’s Government had promised to correct this imbalance before he was forced to resign over the summer. However, the new Government has made it clear that benefit freezes are on the table, although formal discussions are due to begin only once September’s inflation figures are received next month.

According to the Resolution Foundation, increasing benefits in-line with earnings instead of inflation would leave a low-income family with two children £1,000 per year off. This would follow the decision by former Chancellor Rishi Sunak in October last year to cut the Universal Credit £20 uplift, which cost 5.5 million households an average of £1,200. 

It also risks cancelling out the changes to the taper rate announced last year, which gave an additional £1,000 more per year to two million working families on Universal Credit.  

Iain Porter, Senior Policy Adviser at the Joseph Rowntree Foundation, said: “It is shocking to hear the Government suggesting that they may not do what Rishi Sunak promised and uprate benefits by inflation next April as usual. This will mean yet another devastating blow to the finances of people on the lowest incomes and will cause fear for millions who have spent the past months struggling to feed their families, cook hot food and heat their homes”.

Where The Cuts May Fall

More than 5.8 million people in England, Wales and Scotland claim Universal Credit, and just under half (40%) have jobs. The amount a household receives varies depending on income and whether the claimants have children. 

Of that 5.8 million, 46.7% are single people with no children, and 13.5% are a couple with children. Single parents make up 36.3% of claimants. Half of single parent households are in relative poverty, and 90% of those families are headed by single mothers. 

London has the highest number of individual Universal Credit claimants, at 771,665, and in April 2022, 16.5% of people on the benefit lived in the capital. Just over 12% of people on Universal Credit live in the North West, or 618,572 individuals

Proportionally the region with the most people on benefits is the North East, at 8.76%. This is based on the number of claimants (236,709) as a percentage of the regional population as estimated by Varbes (2,702,539).

The North West had the second highest percentage of claimants per population, at 8.39%. London is at 8.08% and the West Midlands at 7.9%. In Wales, 7.2% of the population claims Universal Credit, while in Scotland it is 7.1%. 

On an individual city or county council level, Birmingham City Council has the highest number of claimants, at 160,164, while Rutland has the lowest: 1,793.

This regional breakdown demonstrates that many of those who will be hardest hit by a decision to raise benefits in-line with earnings and not inflation are in former Red Wall seats – traditionally held by Labour but which voted Conservative for the first time in 2019 on a promise of getting Brexit done and “levelling up”. 

Women will also be disproportionately impacted by a real-term cut to benefits levels – they make up 55% of Universal Credit claimants. The majority of claimants are in their 30s.

Should the Chancellor Kwasi Kwarteng pursue a plan to increase benefits in-line with earnings in order to balance the books, at a time when offering tax cuts and unlimited bankers’ bonuses to the richest in society, he will be sending a clear message that austerity is back, and risks increasing regional, gender and generational inequality.

“Many people across the UK will agree it is morally indefensible that the Prime Minister would choose to give tax cuts to the richest funded on the backs of the poorest in our society,” said Porter. “Those who will lose out if the Government continues down this track include people with low earnings, families with children, carers and people who are sick or disabled”. 

This article was produced by the Byline Intelligence Team – a collaborative investigative project formed by Byline Times with The Citizens. If you would like to find out more about the Intelligence Team and how to fund its work, click on the button below.

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‘Mini budget’ shows contempt for ordinary people as government banks on growth at any cost

Published by Anonymous (not verified) on Mon, 26/09/2022 - 12:22am in

What is the mantra of ‘growth, growth, growth’ – without any structural changes or interventions to reconfigure the basic operations of the economy – but a new variant of the same old ‘trickle down’ dogma? No rising tide will lift all boats when capital is owned by the few not the many.

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Chancellor Kwasi Kwarteng holding a copy of booklet "The Growth Plan 2022"The Chancellor Kwasi Kwarteng leaves 11 Downing Street to deliver The Growth Plan to parliament. Photo by HM Treasury on Flickr – Creative Commons 2.0 license

‘At last, a true Tory budget’, trumpets the headline in a rag of a mainstream newspaper after Kwasi Kwarteng’s mini budget on Friday. You don’t have to look too far to understand why, and it’s not at all complimentary. Across the board, the opinion is that this is a shameless budget for the rich with a few crumbs from the table for the rest.

This is a budget that will only add to existing inequality and poverty which has its roots in decades of neoliberal narratives that have focused on the primacy of markets and challenged the notion that a government’s role is to serve public purpose and not its own interests, or those of big business. This is not a ‘failed experiment’ as John McDonnell, the former Labour shadow Chancellor, tweeted this week. It has done everything it said it would on the tin.

The last 12 years have been part of a continuing and deliberate, decades-long effort to shift wealth upwards and transfer public assets into private profit for which the nation has paid a heavy price. Even during the pandemic, as the government stepped in, as only it could, to support the economy, it has been clear who the main beneficiaries of that spending have been. The last 40 years and more have demonstrated plainly that a rising tide does not lift all boats. It has been a sham that has served the corporate estate with the full support of the government whose politicians have benefited through the revolving door.

Whilst Kwarteng has signified ‘a new direction for the economy,’ it is anything but. It is predicated on more of the same ideology that has already done so much damage. That the rich are the wealth creators, and the State must do everything it can to remove any impediments to growth, through tax breaks and deregulation. This budget stands as a beacon for the status quo, however it is being presented.

Whether it is reversing the cap on bankers’ bonuses (yes, the same people who crashed the economy in 2008/9), backtracking on corporation tax and National Insurance (which for the latter will scarcely make any difference to the incomes of the poorest), or the grossly unfair changes to tax rates which will favour the wealthiest, it signifies no change in economic policy.

How can it be fair or right that the incomes of the richest will be boosted by £54,000 while the pay of working people will be cut in real terms? As rising prices of food and energy continue to impact incomes and the wrong-headed decision by the central bank to increase interest rates yet again this week, the paltry support being offered by the government will do nothing to help people navigate a crisis which is happening right now.

And let us not forget that the planned cut in stamp duty will also benefit the wealthier, whilst doing nothing to help young people struggling to get on the housing ladder. Furthermore, without measures to increase the housing supply, it is likely to fuel an inflationary bubble in the property market.  As Lewis Shaw, the founder of Shaw Financial Services noted:

‘If someone asked me how to drive an already overheated property market into a dangerous bubble territory and make things worse for everyone, this policy would be it.’

Perversely and predictably, the reports of the cut sent a signal to the stock market and shares rose between 3% and 6% on the FTSE. This is everything that’s wrong with the prevailing economic system. In the words of a famous song by Abba, ‘money, money, money… in a rich man’s world.’

In the light of the current global economic uncertainty, and with no assurances as to how the future will pan out as the collective west, through the imposition of sanctions against Russia, creates vast economic uncertainty for their citizens, combined with the tectonic shifts in global power which are taking place, basing one’s economic plans on growth at all costs (a problem in itself given the climate crisis) might seem a little premature.

The freshly coined word ‘Trussonomics’ which suggests a departure from the Treasury orthodoxy, and which has driven spending policy, is a sham. It is just the same old economics dressed up in sheep’s clothing. Predicated on Truss’s claimed rejection of Thatcherite ‘tax and spend’ and emphasising growth instead as the economic saviour that will lead us to prosperity, her claim is still rooted in household budget terms. That although the government will fund its tax cuts with vast borrowing, the growth target set by the government will ultimately ‘secure sustainable funding for public services and improving living standards’ and enable it to reduce its deficit and debt as economic conditions improve.

Yet again it dupes the public into believing that the debt is a real thing of substance and not just part of the smoke and mirrors which aims to keep people chained to the belief in monetary affordability which, if not dealt with, threatens the prosperity of future generations.

So much for the revolution in thinking.

What is the National Debt? - The Gower Initiative for Modern Money StudiesQuite simply, in accounting terms, the government (fiscal) deficit is the difference between what the government spends and what it collects in taxes. The National Debt is the accumulation of …

 

It was predictable that these plans would bring the borrowing and national debt doomsters, rigorously ringing their alarm bells, out in force. Paul Johnson, Director of the Institute of Fiscal Studies (IFS), which is grounded in economic orthodoxy, remarked:

Today, the chancellor announced the biggest package of tax cuts in 50 years without even a semblance of an effort to make the public finance numbers add up.

Or the Resolution Foundation, equally orthodox in outlook, suggesting that Sunak’s fiscal headroom would be blown and drive a borrowing surge to the tune of tens of millions of pounds that will break the fiscal rules.

Finally, The Telegraph, quoting the IFS, claimed that ‘Liz Truss’s plan to slash taxes to boost growth […] would put Britain’s debt pile on an ‘unsustainable path’ which would force future governments ‘into a renewed period of austerity to control the UK’s debt mountain.’

These are narratives which invite the public to home in on the fiscal responsibility of successive governments rather than their actual economic record.  What did it do to improve the public and social infrastructure which supports a modern economy? Who were the beneficiaries of its spending and legislative policies? And how well did it do to keep the economy balanced through the economic cycle in terms of matching spending with available resources to avoid inflationary pressures and support citizens during good times and bad? These are the real questions of consequence.

Banking on growth to get you out of a fix in an uncertain world is, as a Guardian journalist suggested this week, ‘casino faith-based economics.’ Nothing new there then.

On that basis, it is shameful that the mainstream media does not hold politicians or economists to account or question the clear contradictions when talking about government spending. They hold fast and without exception to Thatcher’s household budget economics. But surely it should be glaringly evident by now that a government makes ideologically driven, political choices not based on an available pot of tax money when it bails out banks with not a taxpayer in sight, pours vast sums into supporting the economy during the pandemic (a lot of which ended up in private profit), chooses to wind up the magic money tree to send military and other aid to Ukraine to the tune of £2.3bn (and counting), or helps profiteering energy companies out of a fix.

This challenges the notion that public services are unaffordable or that there is no alternative to austerity, claims that will surely be resurrected if and when Truss’s growth plan fails to deliver. A sound public and social infrastructure that provides strong foundations for a thriving economy is not dependent on growth and subsequent tax revenues as Truss and Kwarteng would have us believe. It is dependent on a government with public purpose objectives and such foundations must come first to ensure an economy that can manage the ups and downs of the economic cycle, and indeed the crisis we find ourselves in. The evidence of what happens when governments fail to deliver stands before us.

Instead, we have a government determined to pull the rug out from under the feet of the very poorest people through its policies. Analysis by the Women’s Budget Group has shown that at the same time as benefiting the wealthiest (mainly men) they will take money from the purses of part-time workers who are mainly women.

Furthermore, plans to cut the benefits of low earners if they are unable to increase their working hours will hit women with caring responsibilities, ill health, or disability. As the Women’s Budget Group pointed out, instead of vital investment in care services, flexible working and working to change employer attitudes, this government has chosen punitive policies which will create further suffering.

In the same week as the mini budget, which has done little to alleviate the growing crisis in public services, Tory council leaders have warned that adult social care faces a £3.7bn funding gap, a problem which is compounded by growing staff shortages, fewer care beds and higher costs, which has brought many local care providers to the edge of collapse. The fragile state of social care is not however a new problem. It, like the NHS and other publicly delivered services, has suffered at the hand of neoliberal ideology which has promoted markets and privatisation as efficient solutions to driving down government expenditure. If only that were true!

This cumulation of policies introduced by successive governments has ironically put huge pressure on local government and the very private providers who were supposed to provide solutions. Cuts to government expenditures have seen to that. A race to the bottom, in so many words.

It, therefore, beggars belief to learn this week that the new health secretary Thérèse Coffey thinks that a £500m fund will be sufficient by itself to support recovering patients either in their own homes or in residential care, following discharge from hospital. Without dealing with the structural problems faced by those delivering social care services which result from the policies of successive governments, it will do little to alleviate the situation and will be a drop in the ocean compared to the levels of funding that will be needed to prevent complete collapse.

Also, to believe that money by itself is a solution, however paltry this offering is, is to fail to acknowledge that without more staff, beds and facilities, aka real resources, this money can do little to provide better outcomes for patients. It will not provide an immediate solution or mitigate potential problems the NHS may face this winter, and the question remains about where this £500m will come from. Will it be new money, or instead taken from existing NHS budgets as is feared? As usual, the devil will be in the detail to the detriments of patients and those trying desperately to deliver services on a shoestring. As Mike Padgham, the chair of the Independent Care Group, noted:

‘This is a sticking plaster put on a gaping wound by a doctor that doesn’t see how sick the patient is.’

And if you think that things couldn’t get worse, over the last week the government has demonstrated its true colours in respect to the greatest existential threat that humanity has ever faced. As Jacob Rees-Mogg tells a staff meeting that Britain ‘must get every cubic inch of gas out of the North Sea’, that it is greener to produce our own fossil-based fuels rather than import it over thousands of miles, and that the ‘public needs to be persuaded that fossil fuels are the answer’, it demonstrates beyond all doubt that the government’s commitment to addressing climate change has not, and will not go beyond the rhetoric of COP 26. With plans to reverse the ban on fracking, even though as the founder of Cuadrilla pointed out this week, it will be impossible at any meaningful scale and will not help with the energy price crisis, the government is marching backwards on its intentions.

As Rebecca Newsom from Greenpeace said:

‘Jacob Rees Mogg wants to drag [government] back in time, turning it into a political arm of the fossil fuel industry. And so, we have laughable greenwash about fossil fuels being green, taken seriously at the heart of government. If the government sticks to this wrong turn we are all going to be worse off, except for fossil fuel giants already profiteering from this crisis.’

Scientists have already warned that licensing new North Sea oil and gas fields is incompatible with existing climate commitments to limit warming to 1.5°C above pre-industrial levels. Rees-Mogg, a climate change denier is set to compound the problem.

The current global crises in energy and food will, it seems, provide the perfect cover for climate change deniers to push their agenda and for the likes of Rees-Mogg to claim that he had no other option. A complete gift to those in the Tory party who deny climate science. As WalesOnline reported prior to her election;

“Truss herself has close ties to the IEA which has a long history of opposing government environmental policy and has taken funding from British Petroleum. During a trip to the United States in 2018 while she was chief secretary to the Treasury, Truss met with several Koch-funded libertarian think tanks and lobby groups with a history of climate science denial, including the Cato Institute, the American Enterprise Institute, and the Heritage Foundation.

 

As environment secretary between 2014-2016 she cut subsidies for solar farms, calling them “a blight on the landscape”, and claimed they were harming food production. Truss is one of the authors of an influential 2012 book by members of the Conservative Free Enterprise Group, Britannia Unchained, which argued for a low-tax, deregulated economy and took a swipe at “government-subsidised green technology”.

 

The fact that instead of supporting citizens directly, she is going to pour vast sums of public money into energy companies shows conclusively what her priorities are. These are politicians bought and paid for to serve the corporations in a world in which democracy has ceased to mean anything.

If you combine this with the government’s promise for the ‘most ambitious environmental programme of any country on earth’ and their subsequent proposals to revoke 570 environmental laws which cover water quality, sewage pollution, clean air, habitat protection and the use of pesticides, along with the plan to create 38 investment zones across Britain which environmental organisations such as the RSPB are suggesting will represent an ‘unprecedented attack on nature, you get a sense of the direction of travel.

A country where the government is a lackey to the corporations who dictate the rules, and who provide the legal frameworks for them to do so. A country which is a slave to an economic system which thrives on corporate control and the never-ending quest for profits.

As Ruth Chambers, a senior fellow at Greener UK tweeted this week, ‘The government is hurtling towards a deregulatory free-for-all’ where vital environmental protections will be ripped up and public health put at risk.’

Taking government policies as a whole, and the likely impact of this mini budget, they show complete contempt for ordinary working people and the planet which provides the means for our existence. Growth at any cost is the mantra which prevails. And yet, as government abandons any pretence of creating a fairer and environmentally sustainable economy, humanity is still hurtling ever faster toward a potentially shocking future.

As the Australian National University Emeritus Professor, Will Steffen, noted in 2020, there was already a chance that we have triggered ‘a global tipping cascade’ that would take us to a less habitable ‘Hothouse Earth’ climate.’ It is therefore imperative that humanity uses its time constructively to reduce at least the worst effects of such an outcome.

We can only hope that, sooner rather than later, it will become clear to people that successive governments have chosen this path which is not based on monetary reality but serves instead a distorted economic system which puts growth and profit as the holy grail of success and is proving itself an existential threat to existence.  Learning how governments really spend is the first step towards understanding that it doesn’t have to be like this and challenging the status quo.

A brief introduction to Modern Monetary Theory - The Gower Initiative for Modern Money Studies

Living within your means may be a good rule for households, but a government with its own currency and its own central bank, is not at all like a household.

 

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The post ‘Mini budget’ shows contempt for ordinary people as government banks on growth at any cost appeared first on The Gower Initiative for Modern Money Studies.

Celtic Twilight

Published by Anonymous (not verified) on Mon, 19/09/2022 - 11:05pm in

Two new books evoke a rural Ireland of Arcadian memory and grim reality.

fresh audio product: child poverty, more on Chile, and the politics of grievance

Published by Anonymous (not verified) on Sat, 17/09/2022 - 2:16am in

Tags 

Radio, Chile, poverty

Just added to my radio archive (click on date for link):

September 15, 2022 DH on child poverty: how much was it down? • another view of the Chilean constitutional referendum, this from Mario Pino • Arielle Angel, editor of Jewish Currents and author of this article, explores the problems with organizing your politics around grievance

The Class Ceiling: Liz Truss’ Cabinet Offers the Illusion of Equality

Published by Anonymous (not verified) on Fri, 16/09/2022 - 7:30pm in

Despite the racial and ethnic diversity of the Prime Minister’s top team, this counts for little if ordinary people of colour continue to suffer, says Taj Ali

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Much has been made of the apparent 'diversity' of Liz Truss' new Cabinet. For the first time in British history, none of the four great offices of state – Prime Minister, Chancellor, Foreign Secretary and Home Secretary – are occupied by a white male.

What has been less spoken about is that this is one of the most socially exclusive cabinets in recent history, with the highest proportion of members who attended private schools in more than 25 years.

Chancellor Kwasi Kwarteng, Foreign Secretary James Cleverly and Home Secretary Suella Braverman were all privately educated. In fact, the vast majority of the new cabinet have been educated at fee-paying schools – even more so than under her predecessor, Old Etonian Boris Johnson.

Just 7% of Brits are privately educated yet 68% of the new Cabinet have been. This is more than double that of Theresa May’s 2016 Cabinet (30%), and more than David Cameron’s 2015 Cabinet (50%). We have gone backwards on class.

When people in positions of power are divorced from the impact of their own policies and, indeed, divorced from the everyday struggles of working-class people, it is no wonder so many have little faith in our current political system.

Private schools play a key role in maintaining this social class segregation and the new Cabinet encapsulates how a two-tier education system can create a two-tier society.

As a result of the Government’s austerity policies from 2010 onwards, according to the Institute for Fiscal Studies, England’s state schools suffered the largest fall in funding since the 1980s, with schools in the most deprived areas worst affected.

Well-resourced private schools have been well looked after by successive governments. A study in the British Journal of Sociology of Education estimates that private schools benefit from tax exemptions to the tune of £3 billion a year. That's the equivalent of more than 6% of England’s total state school budget in 2020-21.

Private schools maintain 'charitable' status and are thus exempt from VAT and business rates. Meanwhile, state school budgets have been decimated by successive cuts, a recent survey finding that 58% of teachers are resorting to feeding hungry pupils out of their own pockets. 

It is no coincidence that the gap between private school fees and state school per pupil spending in England has more than doubled over the past decade. When politicians are drawn from an exclusive, elitist education system, it is no surprise that there is little interest in investing in state schools – institutions that they have never used. When politicians opt for the privilege of private education and private healthcare, it’s little wonder that our state education system and NHS are in a state of perpetual crisis.

If we had more people in positions of power with a stake in our state education and healthcare systems, there would be a far greater willingness to adequately invest in these collective systems of provision.

The composition of the new Cabinet emphasises how parentage and privilege continue to determine where power lies in modern Britain.

As we witness a widening chasm between policy-makers and ordinary people; as the rich get richer and the poorest are still suffering from a decade of stagnation and austerity, the pandemic and now the cost-of-living crisis, the notion that Britain has become a more equal, meritocratic and fair society couldn’t be any further from the truth.

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The Fallacy of Representational Politics

But surely having politicians of colour in high places should be cause for celebration among people from those same communities?

When those same politicians preside over policies which disproportionately harm people of colour, there is nothing to celebrate. And, if recent history teaches us anything, mere representation without policies that tackle racial inequalities is meaningless.

But the problem goes beyond an unwillingness to tackle racial inequalities. In many instances, ethnic minority Cabinet ministers can and have maintained and upheld systems of oppression, often using their identities to shield the Government from accountability.

During the Windrush Scandal, former Home Secretary Sajid Javid told former Shadow Home Secretary Diane Abbott that she didn’t have a "monopoly on anger" over the affair as he was a "second-generation immigrant too". Except, this anger was not evident in his voting record – Javid voted for the legislation which led to the Windrush Scandal.

This is the point. Home Secretary Suella Braverman and her predecessors Priti Patel and Sajid Javid are people of colour, but that hasn’t stopped them from supporting policies which have harmed people of colour. The Rwanda deportation plan is a case in point.

Race and class are not mutually exclusive, they are intrinsically interlinked.

People of colour in the UK are disproportionately working class and have been disproportionately impacted by right-wing economics. A brutal decade of austerity has punished ethnic minority communities, with the poorest black and Asian women being hit hardest by changes in welfare and income support, as well as drastic cuts to public services.

British Pakistani and Bangladeshi children have the highest rates of child poverty in the country at 54% and 59% respectively. Workers of Pakistani and Bangladeshi heritage also have the lowest median hourly pay of any ethnic group, in the latter case earning 20.1% less than white workers. What material difference then did super-rich Chancellor Rishi Sunak make to the lives of working class people of colour, half of whom struggle with poverty?

Instead of optics-based illusions of diversity that continue to accompany institutional harm to the most marginalised communities, we urgently need economic policies that will make a real difference to the lives of the poorest and most vulnerable.

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Free Fruit and Veggies Make a German City ‘Edible’

Published by Anonymous (not verified) on Wed, 14/09/2022 - 6:00pm in

Three great stories we found on the internet this week.

Salad days

When people in Andernach, Germany stop on their way home for dinner ingredients, they don’t have to get out their wallets. In the city’s public garden, everything from Swiss chard and zucchini to strawberries is free for the picking.

Since 2010, gardeners have tended to the all-organic fruit and vegetable crops sprawled across nearly five unfenced acres in the so-called “edible city.” The array of plant species supports urban biodiversity, and nutrient-intensive crops like potatoes are rotated to maintain soil health. The project hires long-term unemployed people to assist with the work. The gardens have even boosted tourism as visitors flock in for guided tours and Instagrammable selfies. 

The green space helps residents connect to the source of their food in a way that’s not as obvious in a grocery store. One hope, said the project director, is that they “open people’s eyes to how you can use one square meter of land and harvest enough for at least a couple of meals.”

Read more at DW Akademie

Social security

For as long as social safety net programs have been around, so have debates over whether they’re effective at alleviating poverty. A new analysis shows how important they can be. From 1993 to 2019, child poverty in the US fell by 59 percent, thanks mostly to the expansion of such programs, including the earned income tax credit, Social Security and free school lunches.

Social Security cardAn expansion of Social Security helped to cut child poverty in the US. Credit: Shutterstock

In 1993, there were 19.4 million poor children in the US. In 2019, there were 8.4 million — though Black and Latino children are still far more likely to live in poverty than white children. 

As we reported last year, child poverty costs the US more than $800 billion a year. For families, public assistance can mean getting through a health crisis without going bankrupt or the ability to start savings accounts for children. On the benefits of the poverty drop, one researcher said: “A childhood free of poverty predicts better adult outcomes in just about every area you can imagine, including education, earnings and health.” 

Read more at the New York Times

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Clam diggers

A new knee-high wall stretching 200 feet along Kiket Island shoreline in Washington State stands ready for its future role: home to littleneck and butter clams. 

There’s evidence that Indigenous peoples harvested clam gardens as far back as 3,500 years ago in the region. According to one study, the practice is much more prolific than non-walled beaches when it comes to clam growth. 

The clam garden project, led by members of the Swinomish Tribe, has climate change benefits too. The habitat’s design will neutralize CO2, which impacts the sea’s livability for shellfish.

“We are in crisis mode, and this is just a little bit of work that we can do to support their home to make sure that they’re surviving with us,” a Swinomish senator said.

Read more at KUOW

The post Free Fruit and Veggies Make a German City ‘Edible’ appeared first on Reasons to be Cheerful.

Household Debt, Problem Debt, and a Cost of Living Crisis

Published by Anonymous (not verified) on Tue, 13/09/2022 - 10:03pm in

Tags 

poverty, Society

Sian Norris and the Byline Intelligence Team look at rates of debt and problem debt in the UK, as families turn to loans to make ends meet

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As politicians scrabble around to find a solution to the cost of living crisis, there has been plenty of talk about the national debt and the burden it places on future generations. 

There has been less talk, however, on how the cost of living crisis is fuelling a household debt crisis, with families struggling to make ends meet turning to credit, payday loans and high interest borrowing in order to make it to the end of the month. 

According to new analysis by the Joseph Rowntree Foundation, the maximum £2,100 per month of Government support– which includes the recently announced energy price freeze – isn’t enough to meet rising energy and other costs for the average household, which are around £2,900.

This leaves a gap of around £800 that low-income families will have to find themselves, including by taking out loans or using credit cards to make ends meet. Already by June this year, 1.3 million low-income households (11%) had used credit to cover essentials.

Little wonder, then, that data from the Joseph Rowntree Foundation found that people on low incomes have taken on £12.5 billion of new private debt in 2022. This represents more than half of the total private debt.

And while that would be concerning in itself, people on low incomes owe a total of £3.5 billion of debt to high-interest lenders and loan sharks, putting them at risk of their debt spiralling or facing punitive sanctions. Arrears on personal debt have almost doubled from £1.8 billion in October last year to £3.8 billion this year. The average credit card debt per household in June 2022 was £2,229

The impact of debt is felt differently depending on income levels. While the wealthier households may have a lot of debt – such as a mortgage or student loan – it’s the poorest families who are more likely to find their existing debt “a burden”. Around half of people in the poorest fifth of households describe their debt in this way, compared to one in three people overall. 

It's no longer a case of putting a luxury item or treat on the credit card either, with families increasingly using credit to get by day-to-day. Unsurprisingly, this is a gendered phenomenon, with women more likely to incur debt in order to pay for everyday necessities. 

According to debt advice provider StepChange, 61% of people getting into debt to purchase everyday items such as food and cleaning products are women – something at risk of getting worse as the cost of living crisis continues. Women are more likely to be living in poverty than men, and are the majority of single parents. More than half of single parent households are in poverty.

This article was produced by the Byline Intelligence Team – a collaborative investigative project formed by Byline Times with The Citizens. If you would like to find out more about the Intelligence Team and how to fund its work, click on the button below.

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Problem Debt and Inequality

Much of the debt described above falls into the definition of ‘problem debt’, which is when a household has liquidity problems – falling behind on bills or credit commitments for two or more consecutive months.

Between 2018-2020, the Office for National Statistics (ONS) found that 5% of households had problem debt. However, the distribution of problem debt was not equal across regions or income. The ONS found that between April 2018-March 2020, 17% of households with problem debt were in the lowest income bracket, compared to 8% in the next income bracket and none recorded in the top five income brackets. 

Renters were also more likely to be in problem debt: 66% of households with problem debt during the same timescale were in rented accommodation. Only 6% of problem debt was for those who owned their homes outright; 28% was in households with a mortgage or on a help to buy scheme.

Regional disparity exists when it comes to problem debt too, with research from Centre for Cities finding it to be particular issue in Northern and Welsh cities. ONS data states that 6% of households with problem debt are in the West Midlands, and then 5% in the North East, Yorkshire and the Humber, London, and the South West.

The Centre for Cities analysed County Court Judgements (CCJs) to track rates of problem debt. The rates of CCJs grew by more than 110% between 2013 and 2018, with growth concentrated in cities with low average pay and high welfare receipt. Hull had the highest number of CCJs per 100,000 in 2018, along with the lowest weekly resident wages and the third highest welfare bill per person. 

The growth in CCJs has been driven by an increase in smaller claims – 40% are for debts below £500 – and between 2012 and 2018 the number of judgements made against individuals unable to repay debts has increased by 126% to just under 1.1 million. 

While much of this data is from 2018, the conditions that have caused a rise in problem debt and small claims cases continue: sluggish wage growth and the impact of austerity.

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Seven Decades of Social Progress – But is the UK Heading Backwards?

Published by Anonymous (not verified) on Tue, 13/09/2022 - 12:30am in

The Byline Intelligence Team digs into the story of the past 70 years in data

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The death of Queen Elizabeth II has led many people to reflect on the societal changes that took place during her 70 years on the throne. 

When she succeeded her father at the age of 26, the UK was rebuilding post-war; the NHS was five years old; and while the population managed on rations, a mass house-building programme helped to transform the bombed-out cities of the Second World War. 

Today, the NHS faces record waiting times and a staffing crisis; people struggle to feed their families as they choose between food and fuel; and house-building has stagnated, with council properties no longer a source of national pride, but often seen as a stigma, left to deteriorate. 

The population in England and Wales when Princess Elizabeth became Queen was 43,955,000 – up 59,829,000 by 2020. Her death at 96 is part of a trend where people are living longer: the Queen sent more than 175,000 telegrams to centenarians in the UK and the Commonwealth.

Much has changed since 1952. The Byline Intelligence Team examined the pace of change over the past 70 years and asked: are we returning to the 1950s?

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Science and Medicine 

Arguably the greatest leap forward in the past 70 years has been in the field of medical science. Illnesses that were once a death sentence are now survivable. While new diseases have developed since 1952 – most notably, Coronavirus and HIV/AIDS – within a remarkably short space of time we have seen treatments that allow many people with these deadly viruses to survive and live normal lives. 

In 1952, the crude mortality rate for England and Wales was 1,131 per 100,000. In 2019 (before the pandemic), it was 893 per 100,000, representing a 26% decline. Life expectancy is now 81.6 years compared to 78 for a boy born in 1952, and 83 for a girl born the same year. 

Today, one in two of us will get cancer in our lifetimes. It’s a scary number, but more of us are surviving the ‘big C’ than ever before. In 1972 – two decades after the Queen's accession – only 45% of men diagnosed with cancer survived for more than a year in England and Wales, and 55% of women. By the time of her Golden Jubilee, in 2012, the number was 67% and 74% respectively. Half of people diagnosed with cancer will now survive for more than 10 years. 

One of the big indicators of a healthy nation is maternal and infant mortality rates. Back in 1952, the infant mortality rate was 29 per 1,000 live births; by 2022 it had dropped to just under four deaths per 1,000 live births. Maternal mortality was 90 per 100,000 births in 1952. Fast forward 70 years and of the 2,173,810 women who gave birth in 2017-2019, 191 died during or up to six weeks after pregnancy, 495 during or up to one year after their pregnancy. This is, by any standards, a significant decline.

Social Change

Since 1952, the UK has seen the rise of three great social liberation movements: women’s rights, black liberation, and LGBTIQ liberation. Changes in the law, such the Race Relations Act in 1974 and the decriminalisation of homosexuality in 1967, have been accompanied by a rise in cultural visibility and improved equality. 

A total of 107 women served as MPs in the entire period of 1953-1997: today we have 225 women MPs in a single Parliament and our third female Prime Minister.

Legal changes for women include the Equal Pay Act 1970, the criminalisation of rape in marriage in 1991, and the 1967 Abortion Act.

The labour market participation of women reached a record high of 74.2% in 2018 compared to 72.4% in 1952 (the lowest point was 65.9% in 1983).

Women don’t need to have a man’s signature on their bank account or mortgage application. In the eyes of the law, at least, women have equal rights.

It took until 1987 before the Queen saw two black MPs in Parliament: today there are no white men in the four great offices of state, and 65 black and ethnic minority MPs. Black and ethnic minority people are entering higher education at increasing rates: in 2022, 12.2% of first year students were Asian, 8.7% were black, 4.5% had mixed ethnicity, and 2% were from another ethnic minority group.

The New Labour Governments of 1997 and 2001 introduced gay liberation laws, including equal age of consent, an end to the ban on gay people in the military and gay adoption, and civil partnerships which later became equal marriage rights under David Cameron. 

In 1952, the warning signs were there that the age of Empire was over. India became independent in 1947 and the post-war human rights settlement was putting pressure on the UK to end its policy of ‘legal lawlessness’ in colonial countries that were ruled with violence, racism and white supremacy.

During the Queen’s reign, 48 formerly colonial countries became independent, including numerous countries in Africa, the Middle East, and the Caribbean. The first was Sudan, in 1956. 

Much has been made with the Queen’s relationship with countries around the world, including those which formerly made up the British Empire. One third of the Queen's total overseas visits were to Commonwealth countries, and she attended 22 Commonwealth heads of government meetings as well as seven Commonwealth games. By the end of her reign, the Queen had visited all but two Commonwealth countries – Cameroon and Rwanda – making close to 200 trips. 

But King Charles III may be presiding over fewer Commonwealth countries than his mother, as people across the realm question whether they want a British monarch to remain as their head of state. Barbados became a republic last year and Antigua and Barbuda are due to hold a referendum on breaking with the monarchy.  

Poverty and Inequality

It’s challenging to track changing rates of poverty since 1952 due to the different ways in how it is measured. But there are indicators of where social mobility has improved – and where there has been regression. 

When the Queen came to the throne, education was only compulsory up to the age of 15, and children’s futures were decided by the '11+' exam. Today, education and training is required up to the age of 19, and young people’s aspirations have shifted too. In 2019, 50% of young people went to university; back in 1954 it was 3.4%

Workers’ rights are also an indication of a shift in equality: since 1952 numerous laws have been introduced to improve protections for workers such as the Health and Safety Act, and EU directives limiting working hours, protecting maternity rights, and supporting part-time workers. 

All of this seems much to rejoice in. But not all metrics have improved.

Back to the 1950s?

One of the shocking regressions is in housing. You only have to watch Cathy Come Home or  A Taste of Honey to understand the disturbing state of slum housing in mid-20th Century Britain. This crisis was met with mass house building – a need that was exacerbated by the destruction of thousands of homes in the Blitz – and those houses were built for the people. 

In 1952, 260,000 houses were built, of which four-fifths were council properties. Compare that to 2020, when fewer than 7,000 social homes were built in England – that same year 27,036 households were recorded in the homelessness system. 

The housing crisis is perhaps one the starkest reminders that, while much has improved for the UK in the past 70 years, the country is in a crisis that is arguably pushing it back to the 1950s. 

Even those who have a roof over their heads are struggling to stay warm. The cost of living crisis is forcing vulnerable families to choose between food and fuel, with charities concerned about an increase in cold weather deaths. Despite various ‘boomer’ commentators claiming that living without central heating did them no harm, the rate of excess winter deaths in the 1950s was 60,000 – that decreased steadily in the intervening decades to 23,200 in 2018/2019. The decrease was fuelled by warmer homes, but is set to rise again. 

The huge achievements of medical science cannot be underestimated but political decisions in recent years have led to record ambulance waiting times and more than 300,000 patients waiting a year for operations; a failure to meet cancer diagnosis and treatment targets; and the return of previously eradicated diseases. The polio vaccine was introduced in 1956 – today the virus has been detected in London. 

Maternal mortality may have decreased dramatically, but in one area a persistent inequality remains: black and ethnic minority women are four times more likely to die in childbirth than their white peers. This speaks to a greater crisis in racial equality that impacts on everything from health outcomes to prison populations, school exclusion rates and violent death. 

People from ethnic minority groups, especially Pakistani and Bangladeshi groups, are more likely than white British people to report limiting long-term illness and poor health. More than a quarter (27%) of the prison population are from an ethnic minority group, but only 13% of the UK population is black and ethnic minority. Exclusion rates for black Caribbean students in English schools are up to six times higher than those of their white peers in some local authorities.

While some in the country mourn the Queen, a community was also mourning the fatal shooting of Chris Kaba, a 24-year-old black man shot dead after rounds were fired from a police weapon. At least 154 people have been fatally shot by police between 1952 and 2021, with black men disproportionately killed in the latter decades. Up until the 1990s, the majority of fatal police shootings were in Northern Ireland. This data does include, for example, shooting terrorists during attacks such as in London Bridge, 2017.

Institutional misogyny continues to frustrate women’s equality. As for the other big liberation movement of the past 70 years – LGBTIQ rights – there has been a worrying rise in hate crime and a new Government determined to declare war on ‘wokery’ which appears to include attacks on sex, race and LGBTIQ equality. 

The argument can clearly be made that institutionalised racism in the UK today has its roots in the Empire. But people continue to see the country's imperial history as something to be proud of: a 2016 survey found that 43% of Britons surveyed said that the empire was a good thing, and 44% surveyed said they considered it to be a source of pride.

The decision to leave the European Union threatens progress on workers’ rights – with the laws created in the EU Social Chapter at risk of being scrapped by Liz Truss by the end of 2023. While most will be replaced with UK legislation, some may never return. This threat comes as the Government wages war on workers’ rights across the board, including by making it harder to take part in strike action. 

The hard-won changes over the past 70 years by liberation movements, workers, and a commitment to the post-war social contract have rarely felt so fragile as they do today.

This article was produced by the Byline Intelligence Team – a collaborative investigative project formed by Byline Times with The Citizens. If you would like to find out more about the Intelligence Team and how to fund its work, click on the button below.

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People With Eating Disorders ‘Struggling’ as Cost of Living Crisis Batters Britain

Published by Anonymous (not verified) on Mon, 12/09/2022 - 8:57pm in

The choice between heating and eating will have a big impact on those suffering from an eating disorder, warns Emily Chundy

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In the month of April this year, 4.6 million adults reported not eating despite being hungry because they couldn’t afford or get access to food.

The cost of living crisis this year has driven thousands to hunger, and with energy bills, rent, and basic necessities growing more unaffordable – and the news that inflation could reach an alarming 13% in October – this situation is only going to get bleaker.

For people with or recovering from eating disorders, however, not being able to afford a full range of nutritious food, treats, and healthy portions is more than unjust. It’s their worst nightmare.

Around 1.25 million people in the UK have an eating disorder at any one time, according to the charity Beat, though this figure is thought to have increased among young people over the COVID-19 pandemic, and many more will have a difficult relationship with food, or be in the stages of recovery.

The most well-known eating disorders include anorexia, bulimia, and binge eating disorder, with common characteristics being a disordered outlook on food, body image and health. Therapy, nutritional advice, and a specialist diet may be part of many people’s recovery. However, private therapy and a wide range of nutritious food come at a cost, which more and more are saying they can’t afford.

“The cost of living crisis can feel like another excuse not to challenge your eating disorder,” Katie, a 31-year-old woman from London, told Byline Times.

“I was previously lucky enough to have some private therapy for my anorexia, after I reached the end of my NHS-allocated sessions, but was still struggling.

“I had saved up during the various lockdowns and found it helpful… But it is looking increasingly unlikely [that I can start therapy again] as most of my money is going to have to go on bills.”

Katie added that the cost of living crisis is affecting her recovery in numerous ways, from affording therapy, to having to find groceries in different shops, to keeping warm (cold weather can be very uncomfortable for those who are under-nourished) as heating becomes increasingly expensive.

“Recovery meal plans often involve a wide variety of foods, in quite large amounts, and this can be expensive,” she added.

“I am in a very privileged position compared to some people with eating disorders, who may be unable to work because of their illness and dependent on Universal Credit or PIP payments. Some may be struggling to afford basic food or travel to get to appointments. It’s incredibly sad.”

While the majority of people can still afford basic necessities including food, the current economic state means that even those who are managing financially are finding themselves having to dissect their budgets, create meal plans, and cut down on treats.

Valorie told Byline Times that she has found that the act of making meal plans and strictly budgeting for food – rather than feeling free to buy whatever she feels like eating – has been difficult for her and that monitoring the food she buys “somehow always devolves into old disordered eating habits”.

Though meal planning and budgeting are often seen as a good way to save on food, Valorie said for some people with eating disorders, meal planning can be “strongly tied to calorie counting”, and that the cost of living crisis has taken the freedom away from food shopping, instead provoking feelings of “guilt for spending money on food”.

She added: “My eating disorder isn’t really a problem most days, it’s mainly present in times of high stress.

“So the fact that grocery money triggered some weird feelings for the first time in years came as a bit of a surprise.”

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As well as the cost-of-living crisis exacerbating symptoms for those with existing eating disorders, evidence shows that the food insecurity some Brits are facing – including limiting meals to save money, or anxiety about the cost of groceries – could in itself lead to a disordered relationship with food.

In this sense, as more people face food insecurity due to bills increasing and inflation rising, the number of people experiencing disordered eating could actually grow, at a time when it is taking the NHS longer than ever to refer eating disorder patients for treatment due to spending cuts.

Katie added: “One of the biggest issues facing people with eating disorders is the lack of access to eating disorder services, especially services with adults… I hope the new Government commits to improving funding for eating disorder services across the board and quickly.”

She added that bringing back the £20 uplift in Universal Credit that was made available during the COVID-19 pandemic, or even considering “a small amount of food being available on prescription for people with eating disorder” could help to prevent those on lower incomes from being triggered into an eating disorder, or could help aid their recovery.

Tom Quinn, director of external affairs at Beat, said: “We’re concerned that the cost of living crisis could have a significant impact on people with eating disorders. For instance, we know that financial difficulties can heighten anxiety and distress, which could worsen an existing eating disorder or contribute to one developing for somebody who is already vulnerable.

“Food insecurity may mean that people are unable to eat regularly, which can contribute to harmful thoughts or behaviours for somebody with an eating disorder… There is also a risk that people are unable to access the specific foods needed for their meal plan, which risks disrupting their nutritional recovery.”

He added: “The Government must do all it can to support those struggling, including those affected by eating disorders. We have already seen the devastating impact of the COVID-19 pandemic, with Beat providing three times as many support sessions between 2021-22 in comparison to pre-pandemic levels.

“The Government must invest in eating disorder services, and work closely with professionals and experts to ensure policies are in place to support those with eating disorders.”

The new Government has indicated that it will help with the cost of living crisis by capping the price of energy for households and businesses.

The cost-of-living crisis affects more than just energy bills, however, and over the coming months, the Government must prioritise not only ensuring that Brits never have to choose between eating and heating but allowing people to have the financial freedom to feel joy with every meal, rather than feeling guilt over yet another rising bill.

The Department for Health and Social Care was contacted for comment but had not responded by the time of publication.

If you’re worried about your own or someone else’s health, you can contact Beat, the UK’s eating disorder charity, 365 days a year on 0808 801 0677 or beateatingdisorders.org.uk

Names have been changed at the request of interviewees

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At the crossroads of change, leaders cling remorselessly to the catastrophe of the status quo.

Published by Anonymous (not verified) on Mon, 12/09/2022 - 3:21am in

“MMT is fully consistent with the notion that those who opposed government (deficit) spending for public purpose, might gladly embrace such spending if only directed towards subsidizing and ‘derisking’ the private sector, and maintaining the existing distribution of income and wealth.”

Bill Goggin on Twitter

Prime Minister Liz Truss writes in a book of condolence at No 10 Downing Street to mark the passing of Queen Elizabeth II. Picture by Andrew Parsons / No 10 Downing Street

The events of the past week set the scene for an attempt at reinforcing the deteriorating economic and political order which has prevailed for decades. A system of class privilege, corporate power, and deference to a decaying royal institution. The death of the monarch poses an opportunity to distract a nation with endless pomp and ceremony whilst a government, headed by an undemocratically elected Prime Minister, pursues more of the same policies that have already created economic turmoil and will lead to further crumbling of public and social infrastructure, and deny the urgent action needed to address the climate crisis.

Furthermore, the UK does not exist in a vacuum. One cannot view the domestic crisis that faces us without placing it in the context of the geopolitical earthquake that is currently shaking the West, and the tectonic shifts in political power and influence that are currently taking place. Western leaders, with their heads in the sand, are still trying to play the game according to their rules and seem to be acting with complete disregard for the fate of their own citizens through their imposition of sanctions and oil price caps in response to a conflict that did not have to happen.

After decades of a neoliberal order which has created economic decay, increased poverty and inequality, and served the interests of multi-national corporations, who could have imagined the speed at which that established world order which has done so much damage is being threatened with change, and the boundaries of power redrawn. The outcome remains to be seen as yet, and the establishment will not let go of its power easily.

In the meantime, the domestic crisis grinds on, and the status quo looks set to dictate the pace, at least for the time being.

In the build-up to the wholly undemocratic election of the new PM, Liz Truss and her acolytes made it absolutely clear that actually no change to direction was being considered at all. In an interview, Truss suggested that it was ‘fair to give the wealthiest more money back’, through reversing the National Insurance increase imposed by the former Chancellor Rishi Sunak. She noted too, that whilst some people don’t pay tax at all, we should not look at everything through the lens of redistribution, adding that her objective was, ‘to grow the economy, which benefits everyone.’  It beggars belief that she supports a reduction that will benefit the highest earners 250 times more than the poorest.

As Prem Sikka noted in a tweet this week: ‘Tories have declared war on the poor.’

Those of us who have lived through the ‘trickle down’ lie which has permeated government policies over decades, will know categorically that nothing has trickled down, and that the fruits of productivity have been shared unequally, with ever more going into the hands of fewer people. The wealthier have got wealthier, and the profits of global corporations have become increasingly obscene, a fact which has become glaringly evident as major western oil companies report record profits.

Working people are enduring excessive rises in the price of energy, not to mention food. This distress has added to the economic pain they have already suffered, which has derived from a decade of Tory spending and legislative policies which have benefited corporations and allowed them to continue to exploit their power. Price gouging at its best. As the head of BP surprisingly admitted in 2021, his company is ‘a cash machine’.

Furthermore, plans by the new PM to scrap Sunak’s proposed increase of corporation tax will not, as trumpeted by her, incentivise more investment by companies, nor will her promise for ‘full-fat free ports.’ The evidence for such economic benefits has been shown to be thin on the ground. As Torsten Bell from the Resolution Foundation, and normally an acolyte of neoliberal thinking, suggested this week, ‘academic literature from around the world finds corporation tax cuts have no big overall effect.’ And LSE economists have also noted that ‘despite the evidence such handouts to big business do little to rekindle investment and growth’.

At the same time, Truss’s big plan to deal with the energy crisis which includes lifting the ban on fracking, (so much for COP 26), shows yet again who will be the beneficiaries of Tory spending. Take a guess. As Cat Hobbs, the director of the anti-privatisation campaign group We Own It noted, Truss is ‘handing out public money to the profiteers.’

This time it’s not the banks that are being rescued by the government; it is the privatised energy companies. Calls for those energy companies to be renationalised have been rejected by both parties, with Keir Starmer at neoliberal towers suggesting that you ‘can’t nationalise for free’. Frankly, that is just a lot of bilge.

With the government as currency issuer and legislator, it could do just that tomorrow. It is a political choice. But predictably, politicians on both sides of the political spectrum bow to markets and corporations, and suggest such action is unaffordable. For anyone interested, Professor Bill Mitchell discusses here in a 2016 blog, the case for renationalisation and notes that ‘There is no unambiguous evidence that shows the privatised sectors now offer lower costs, lower prices better services and better working conditions.’

It is absolutely laughable when the former PM, Boris Johnson, suggests people buy a £20 kettle to save 2.7p a day in electricity, or Edwina Currie announces that the answer to the cost-of-living crisis is to ‘stick tin foil behind one’s radiator.’ As they sit in their ivory towers looking down on what they consider as the lazy, undeserving, it clearly demonstrates their disregard for the struggles of working people who have been the unfortunate recipients of legislative and government spending policies.

Currie in a recent tweet asked the Money Saving Expert Martin Lewis ‘to stop using words like ‘catastrophe’ and instead advise people to take sensible steps to reduce the effect on their families and businesses. And stop pretending that governments can do everything. They can’t.’

This is neoliberal central. The idea that we are all responsible for our own fate. A point made by George Monbiot in an article in 2016:

“Inequality is recast as virtuous: a reward for utility and a generator of wealth, which trickles down to enrich everyone. Efforts to create a more equal society are both counterproductive and morally corrosive. The market ensures that everyone gets what they deserve.

 

We internalise and reproduce its creeds. The rich persuade themselves that they acquired their wealth through merit, ignoring the advantages – such as education, inheritance and class – that may have helped to secure it. The poor begin to blame themselves for their failures, even when they can do little to change their circumstances.”

Currie ignores the fundamental truth that during times of economic crisis such as the one which we are experiencing, it is only the government that can act to prevent a complete collapse of the economy, through its spending and legislative policies. That was the case for the Great Depression in the 1930s after an initial attempt to impose austerity which resulted in riots, it was the case during the Second World War, for the banking crash in 2008, the pandemic, and now the energy crisis.

Expecting citizens to help themselves in such circumstances is an easy piece of meaningless drivel designed to create distraction and divide people and is a cop-out of the biggest order. It is a denial of government powers to mitigate such crises. It is a denial of its currency-issuing powers. And a denial of its capacity to legislate to create a fairer foundation for national economies, whilst at the same time recognising its responsibility to balance the economy (and not the budget) to avoid inflationary pressures. Such recognition will also apply to the climate tsunami which is bearing down upon us, and which now seems to have been relegated to the back burner until economic conditions and the public finances have improved. As if the fate of the planet can wait. Fighting wars and filling the coffers of the military machine is also taking precedence over saving the planet for future generations.

Waiting for growth (and that concept is a whole separate question) to find solutions to the public debt or share wealth through trickle-down, as Truss demands, expecting taxpayers to come up trumps or the markets to lend, is just part of the smoke and mirrors which prevails in political, economic and media circles. No less so than during this last week when the PM announced her plans to deal with the energy crisis through borrowing. But immediately and predictably up went the cry by economists, politicians, and the media, ‘how will it be paid for?

Gilts and Bonds - The Gower Initiative for Modern Money StudiesThe government spends its currency into existence as it credits accounts, creating bank reserves at the same time, and so has no need for revenue from taxation or borrowing before it can spend.

 

Dr Jeevun Sandher, an economist and political scientist finishing researching inequality and poverty at King’s College in London, claimed in a tweet that ‘It’s irresponsible to borrow £130bn for an energy price freeze when we could get £75bn in windfall, wealth and corporation taxes.’

The Labour opposition leader, in his response to Truss’ energy statement, whilst calling for a windfall tax, claimed that this ‘support does not come cheap’ and that ‘the real question the government faces, the political question, is who is going to pay?’

In the same vein Grace Blakeley, an economics and politics commentator, journalist and author, tweeted that ‘there is more than enough wealth in this country to feed our kids. It’s just in the wrong hands.’

The predictable offering from those who should know better is that you just need to get the rich or the corporations to pay for it.

The same old narrative touted by so-called experts, that governments like the UK run their finances like household budgets. It is irresponsible of Sandher to talk about borrowing when the UK government doesn’t borrow to fund its spending, or for Starmer to suggest that windfall, wealth, or corporation taxes should be imposed instead. Such narratives are quite simply part of the smoke and mirrors which deceive a public that understandably equates its own finances with how the government spends.

An understanding of monetary reality allows us to challenge that model and show conclusively that it is never a lack of money which prevents governments from acting. As has been said many times before, governments make political choices to fund their priorities, and the only constraint to that spending is the availability of real resources. With this understanding in mind, it is clear that there is no justification for allowing people to go hungry or be homeless, or to lay waste to the public and social infrastructure that a healthy economy depends on.

An Accounting Model of the UK Exchequer - 2nd edition - The Gower Initiative for Modern Money StudiesIn this timely study, the authors investigate the structure and function of the UK’s public financial institutions.

 

Equally, citizens, whether present or future, are not harmed by government debt, assuming it is measured in a country’s unit of currency and where those government liabilities can always be settled by the currency-issuing government. It is best described as a public asset, but fear of it is used by those in power as justification for austerity and cuts. We are paying a heavy price for ideology.

Citizens are, however, harmed by the ideologically driven decisions governments make in relation to who benefits from its spending. In the case of the energy companies, it is clear who will be the beneficiaries, just as it was during the pandemic when all and sundry got in on the corporate welfare act, often with the help of their MP mates, while ordinary people got the scrapings from the table.

Taking this argument a step further, out of the domestic context, world citizens will also be harmed by the failure of governments to address the climate crisis through adequate spending and taxation policies to drive change. This cannot be left to transnational corporations who dress up their strategy in false green credentials, and whose objectives are less about the preservation of the planet and more about how to keep their profits rolling.

While preparations for a funeral continue, a new king is proclaimed, and the life and times of a departed monarch take precedence in the mainstream media whose coverage is wall to wall, a Guardian headline, ‘World on brink of five ‘disastrous’ tipping points, study finds’, is relegated as an after-thought to a less prominent spot. Whilst the study suggests that giant ice sheets, ocean currents and permafrost regions may already have passed the point of irreversible change, the authors stress that it is ‘not too late to change course.’

This is no time for silence. Accepting a continuing economic and political status quo, based on class privilege and deference, excessive wealth by the few, and corporate power will be a recipe for disaster. Understanding monetary reality isn’t a solution in itself, but awareness of the possibilities it offers to address the climate crisis which threatens human existence, and the global poverty and inequality that the current economic paradigm has created, is.

 

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Phil Armstrong in conversation with Ndongo SyllaPhil Armstrong, author of ‘Can Heterodox Economics Make a Difference?' will be talking to development economist Dr Ndongo Samba Sylla, whose research focuses on fair trade, labour markets in developing countries, social movements, democratic theory, economic and monetary sovereignty.

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The post At the crossroads of change, leaders cling remorselessly to the catastrophe of the status quo. appeared first on The Gower Initiative for Modern Money Studies.

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