tax

Put the Planet and the People First and the Fiscal Deficit Will Look After Itself

Published by Anonymous (not verified) on Sat, 03/11/2018 - 4:50am in

Gold coins with £ sign on each oneImage: © Chrisharvey – Dreamstime

The Chancellor of the Exchequer, Philip Hammond, delivered his Autumn Budget on Monday. Hammond took an upbeat tone, congratulating the public for its hard work and sacrifice which were now paying off, he said, allowing the economy to recover. Reassuring the House that austerity had always been about necessity and never ideology, ‘Spreadsheet Phil’ indulged himself at length in his introductory words in the classic but false framing of household budget economics focusing on tax windfalls, borrowing, deficit and debt narratives.

It was a budget that had no connection with the real world. Conveniently, the targets to eliminate the deficit (which have faded repeatedly into the distance and national debt has ballooned) were set aside. After eight years of punishing cuts and service closures which has caused economic and social distress to so many, the narrative is stuck in the myth where money for investment in the common wealth of the nation is still limited. It must be cautiously doled out, as gifts or rewards for good behaviour, not as the necessary spending of a government taking proper responsibility for the nation’s security and wellbeing.

Austerity is not over by any means.

Tax and Pay

Wealthy earners have benefited disproportionately from the income tax threshold increase. Hidden in the small print and left unmentioned in the Chancellor’s speech was an increase in National Insurance which diminished the income tax gains. Nonetheless, The Resolution Foundation has calculated that 84% of the gains related to the income tax cut will still flow to the top half of the income distribution and 37% to the top 10%.
There is substantial evidence that inequalities in income distribution have a direct relationship with inequalities to access essential services. There is a wealth of evidence that Universal Credit is having a seriously damaging impact on people’s lives and that people with disabilities are suffering disproportionately in cuts to their income and from cuts in services.
This budget does nothing at a time when wealth disparities are at their highest and people with low incomes and employment insecurity are already struggling to make ends meet. It would make far better economic and business sense to improve living standards of the lowest income section of society as they are the people who spend their additional income, unlike the richer sections of society who have a greater tendency to save.

Universal Credit and Social Security

The Conservative flagship policy Universal Credit has been coming under increasing pressure over recent months because of the suffering and hardship that has been caused. In 2017 The Resolution Foundation called the current design of Universal Credit ‘not fit for purpose’ in 21st century Britain. The UN rapporteur on extreme poverty and human rights is due to come to Britain in November to examine the impact of austerity, including Universal Credit.
The Chancellor has responded by allocating an additional £1bn to ‘smooth’ its roll out. He has made it clear, however, that Universal Credit won’t be slowed or stopped, and the cash injection will do little to deal with the inherent structural problems causing suffering and hardship often rendering people homeless and hungry.
The Treasury purse may have opened a crack but it will do nothing to make up or restore the losses of the last eight years of austerity. This is window dressing of the worst kind.

Environment

Three weeks on from the publication of the IPPC report the Chancellor did not mention climate change once in the budget. Caroline Lucas has challenged this inadequacy pointing out that it is in complete denial of the reality facing the country in our immediate future. Compare this to the Spanish Government’s recent announcement that they are closing coal mines and retraining the miners to develop sustainable energy.
Philip Hammond, by contrast, tinkered around the edges announcing a new tax on the manufacture of plastic packaging. For the ninth year running there is no increase in fuel duty but an allocation of £30bn for roads. This demonstrates a preference for cars over a strategic plan for developing an ecologically sound public transport system. Fossil fuel subsidies will continue. The Chancellor has allocated £60bn for tree planting, but environmentalists have questioned the value of this in the face of government support for environmentally damaging fracking over renewable energy.

Health

The NHS continues to suffer as it not only faces the continued real squeeze on its finances but also on-going privatisation. The Chancellor’s award of extra money for mental health services by 2023-24 is not extra funding and will come from the £20.5bn announced by the government in June this year. This is too little and too late. The crisis in mental health is happening now.
Furthermore, funding for public health services, training doctors and nurses, buying equipment and building new infrastructure will be cut by £1bn next year. The NHS is under increasing pressure in real terms as it tries to cope with picking up the slack after eight years of cuts to social care. The £650m increase to the budget for social care is only a sticking plaster.
There is an extraordinary piece of double-speak in the budget as the Chancellor announced he would abolish the Private Finance Initiative. However, he pledged that existing PFI contracts would continue to be honoured thus locking the hospitals into repaying their substantial debts until 2050. The future direction of who runs public services is also sealed as he indicated that he was firmly ‘committed to the [continued] use of public-private partnership.’ PFI is dead, long live PFI.

Conclusion

The Institute for Fiscal Studies has warned that as a result of the Budget the public finances could deteriorate and that an increase in spending could push the national debt higher.
The current reality in the UK is that we have both unmet need in terms of provision of services and unused resources in the number of people who are currently in low paid work which does not sustain them, or have given up looking in despair. A respectable and responsible budget should address those needs first and foremost if we are to have a successful economy.
This budget continues to frame government debt as a burden which must be dealt with. What is more it makes it the overriding concern well ahead of any real life public purpose such as addressing human suffering or the urgent need to combat the effects of climate breakdown.
A political illusion has been created that government has to finance its spending through borrowing or that it needs tax before it can spend. On the contrary it is the government’s duty as an elected body to assess the real resources that it requires to deliver its public and social purpose policy.
The Chancellor prefers to couch his budget in the narrative of fiscal discipline because it enables him to present spending as a kindly act and careful budgeting as a prudent one. This enables the continued dismantling of the NHS and the welfare state. Indeed, it reframes spending as an act of Victorian philanthropy rather than as the creation of common wealth for the benefit of people and a sustainable planet.

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Jeffrey Archer Demands Ban on Gambling Advertising in Radio Times

Heavens, and what is the world coming to! I’ve just read something by Jeffrey Archer that actually made sense, and with which I agreed. The scribe of Weston-Super-Mud is in the ‘Viewpoint’ column of the Radio Times today, for the week 3-9 November 2018. His piece is titled ‘We have a gambling epidemic’ and has the subheading ‘Cigarette advertising is banned – so why not ads for betting?’

Archer begins by talking about how the Beeb has lost much of its sport coverage to the commercial channels, and so he has his enjoyment of the footie, rugger, golf and cricket ruined by advertising for gambling. He describes how these try to tempt you into having a flutter, even though the odds are stacked against you. You may win occasionally, but in the long term you’ll lose. He then goes to compare this with tobacco advertising, which also took many years to ban because powerful commercial interests were involved, which also heavily sponsored sport. He also claims that the NHS wouldn’t be in crisis if no-one smoked, because the money thus saved would vastly outweigh the tax revenue tobacco brings in. He then writes

Fast forward: we now have a gambling epidemic. More than 400,000 punters have become addicts, 26,000 of them aged 16 or younger. So how long will it take the Government to ban gambling advertising on television? Far too long, I suspect. A good start was made at the Labour party conference in September by deputy leader Tom Watson, who promised immediate legislation to dealwith the problem if a Labour government were elected. Watson pointed out that several experts had shown that unfettered gambling causes impoverishment for the least fortunate in our society, and this often results in abusive behavior towards young children and partners,, and all too often ends in bankruptcy, imprisonment and even suicide.

Rewind: successive governments took years to acknowledge that “Smoking damages your health”, and even longer to admit that “Smoking kills” should be printed on every cigarette packet; and it took even more time before they finally stamped out all forms of smoking advertising. Please don’t let’s take another 20 years before the Government bans gambling advertising, and wastes a generation of young people simply because of the tax revenue.

He then recommends that Tweezer’s new Health Secretary, Matt Hancock, should steal Watson’s clothes and bring in tough legislation dealing with gambling addiction before the next election, because ‘No one ever remembers whose idea it was, only the party person who passed the law.’

His piece ends ‘The slogan ‘When the fun stops stop’ is pathetic, and will reman so until it’s stopped.’ (p. 15).

Archer and Watson are absolutely right about the damage tobacco advertising has done, and which gambling and the advertising for it is continuing to do. And obviously a disagree with his recommendation that the Tories should appropriate Labour’s policy. If they did, it would only be token gesture of actually doing something for ordinary people, like Hammond’s wretched budget. A cosmetic improvement designed to get them re-elected so they can continue wrecking people’s lives in other ways, through destroying what remains of the welfare state and privatizing the health service.

But I’ve absolutely no fear whatsoever that the Tories will ban gambling advertising, for the same reason that they’ve never banned advertising for alcohol. There are heavy restrictions on the way booze is advertised, but not an outright ban. Which the European Union wished to bring in, according to Private Eye a few years ago.

The contemporary Tory party is a creature of its corporate donors. Always has been, to a certain extent. The Tories have always boasted that they represent business, and their MPs, like MPs generally in a political culture dominated by corporate cash, include the heads and managing directors of companies. Indeed, this is one of the reasons the Tories are dying at grassroots level. Ordinary party members in the constituencies are annoyed at the way they’re being ignored in favour of the donors from big business.

Going back 30 years to Major’s government, there was a demand in the early 1990s for an end to alcohol advertising. Major’s government was firmly against it. And one of the reasons was that very many Tory MPs had links to the drinks industry. Which Private Eye exposed, giving a list of those MPs and their links to particular companies.

I’m very confident that the Tory party now has very strong connections to the gambling industry, and so will very definitely not want to risk losing their cash. Just as it wouldn’t surprise me that if Labour did try to ban gambling advertising, the Thatcherite entryists in the party would turn against it. One of Tony Blair’s grotty schemes was the establishment of megacasinos in this country, modelled on America, of course. One of the ideas being kicked around was to turn Blackpool into a British Las Vegas. It’s a very good thing it failed.

Archer’s absolutely right to want gambling advertising to be banned. But the Tories are the last party that’s going to do it. If any party will, it will be Labour under the leadership of Jeremy Corbyn.

Budget Day 2018: The Gower Initiative Rules for a Successful Public Purpose Budget

Published by Anonymous (not verified) on Mon, 29/10/2018 - 6:00pm in

Scales balancing inflation on one side and unemployment on the otherSeen through the MMT lens, the success of the Chancellor’s Budget would be measured against a set of criteria agreed through the democratic process in the interests of the nation’s economic and social well-being. 2018’s Budget should address ecological concerns, inequality and access to essential services first and foremost. This means addressing which resources are available, not whether the use of those resources will ‘cost too much’ or upset the balance-sheet.

Philip Hammond has announced that this budget will increase spending in some areas. But in the event of a no-deal break with the EU, he said he would be forced to tear up his plans and institute an emergency budget, while setting the economy on a “new direction”. We think a new direction is needed right now to tackle all the major problems that we are facing from climate change to the devastation wrought by austerity. The government’s combination of penny-pinching and ideological objection to using the state’s machinery to deliver good public services will have an impact that will last for generations. It’s time for a change of direction. Brexit or no Brexit, the state of the nation depends first and foremost on the government’s actions.

Will the Budget fulfil all or any of the following criteria?

• Facilitate the best use of real and available resources either goods or services both in the private and public sector to meet the government’s public purpose objectives. Has the government got the balance right between the two?

• Meet the goals set for reductions in poverty, homelessness, improving nutrition and reducing infant and maternal mortality? And if not, what real resources might have to be freed up by government through taxation to achieve them?

• Meet the needs of citizens for well-paid employment either in the private or public sector, or when necessary through a government funded, locally delivered, Job Guarantee scheme? Does that employment give them the wherewithal to live a decent life and spare income to save?

• Enable the construction of sufficient numbers of good quality and truly affordable homes to meet the housing needs of all citizens?

• Enable the development of a strategic plan to develop a top-quality education service with adequate infrastructure including schools, teachers, support staff, equipment and school canteens to provide an engaging, happy and healthy environment for children to learn?

• Ensure that our universities and colleges are fostering the skills essential to deliver public purpose – research, engineering, education and health?

• Guarantee the health of the nation from cradle to grave through a well-funded, publicly managed and delivered health and social care service?

• Provide sufficient investment in the provision of a low-cost and efficient public transport network and ensure that the road network is kept in good repair to facilitate both the needs of the public and business?

• Provide for the restoration of strategic industries to remain in the control of government?

• Ensure that the nation meets its climate targets through reducing its carbon footprint using new technologies and investing in renewable energy?

• Support agriculture by developing a plan for national food security and encourage local food production to serve the needs of all income groups?

• Deliver sufficient deficit spending in the economy to meet the government’s economic and employment targets through a Job Guarantee as well as a Basic Income (for those unable to work due to illness or disability) to meet the needs of citizens to lead a comfortable and decent life and support a healthy economy?

• Is the banking system adequately regulated to avoid a repeat of the Global Financial Crash in 2008, are levels of private debt within serviceable limits and do businesses have access to sufficient bank credit to support their investment plans?

• Deliver the tax policies needed to ensure a balanced economy that matches the productive capacity of the nation without inflation, that wealth is redistributed fairly through progressive taxation and express the government’s social and environmental goals?

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The Real News on Labour’s Plan For Nationalisation and Workplace Democracy

In this 15 minute video from the Baltimore-based The Real News network, host Aaron Mate talks to Leon Panitch, professor of political science at York University about the proposals announced at the Labour party’s conference last month that Labour intended to renationalize some of the privatized utilities, introduce profit-sharing schemes and workplace democracy in firms with over 250 members, in which 1/3 of the board would be elected by the workers.

The video includes a clip of John McDonnell announcing these policies, declaring that they are the greatest extension of economic democratic rights that this country has ever seen. He states that it starts in the workplace, and that it is undeniable that the balance of power is tipped against the worker. The result is long hours, low productivity, low pay and the insecurity of zero hours contracts. He goes on to say that Labour will redress this balance. They will honour the promise of the late Labour leader, John Smith, that workers will have full union rights from day one whether in full time, part time or temporary work. They will lift people out of poverty by setting a real living wage of ten pounds an hour.

McDonnell also says that they believe that workers, who create the wealth of a company, should share in its ownership and the returns that it makes. Employee ownership increases productivity and improves long-term decision making. Legislation will be passed, therefore, for large firms to transfer shares into an inclusive ownership fund. The shares will be held and managed collectively by the workers. The shareholders will give the workers the same rights as other shareholders to have a say over the direction of their company. And dividend payments will be made directly to the workers from the fund.

Commenting on these proposals, Panitch says that in some ways they’re not surprising. McDonnell stated that Labour would inherit a mess. But his remarks were different in that usually governments use the fact that they will inherit a mess not to go through with radical policies. Panitch then talks about Labour’s commitment to bring the public utilities – rail, water, electricity, the post office – public ownership, pointing out that these used to be publicly owned before Thatcher privatized them. McDonnell particularly focused on water, before going beyond it, citing the 1918 Labour party constitution’s Clause IV, which Blair had removed. This is the clause committing the Labour party to the common ownership of the means of production, distribution and exchange, under the best form of popular administration. And unlike previous nationalized industries, these will be as democratically-run as possible. Councils would be set up in the water sector made up of representatives of the local community and workers’ representatives to be a supervisory council over the managers in the nationalized water industry.

They then go to a clip of McDonnell talking about the nationalization of the utilities. McDonnell states that the renationalization of the utilities will be another extension of economic democracy. He states that this has proved its popularity in opinion poll after opinion poll. And it’s not surprising. Water privatization is a scandal. Water bills have risen by 40 per cent in real terms since privatization. 18 billion pounds has been paid out in dividends. Water companies receive more in tax credits than they pay in tax. And each day enough water to meet the needs of 20 million people is lost due to leaks. ‘With figures like that’, he concludes, ‘we cannot afford not to take it back into popular ownership’.

Mate and Panitch then move on to discussing the obstacles Labour could face in putting these policies into practice, most particularly from the City of London, which Panitch describes as ‘the Wall Street of Britain’, but goes on to say that in some ways its even more central to financialized global capitalism. However, Panitch says that ‘one gets the sense’ that the British and foreign bourgeoisie have resigned themselves to these industries being brought back into public ownership. And in so far as bonds will be issued to compensate for their nationalization, McDonnell has got the commitment from them to float and sell them. He therefore believes that there won’t be much opposition on this front, even from capital. He believes that there will be more resistance to Labour trying to get finance to move from investing in property to productive industry.

He then moves on to talk about Labour’s plans for ten per cent of the stock of firms employing 250 or more people to go into a common fund, the dividends from which would passed on to the workers up to 500 pounds a year. Anything above that would be paid to the treasury as a social fund for meeting the needs of British people and communities more generally. Panitch states that this has already produced a lot of squawking from the Confederation of British Industry. Going to giving workers a third of the seats on the boards, Panitch states that it has already been said that it will lead to a flight of capital out of Britain. He discusses how this proposal can be radical but also may not be. It could lead to the workers’ representatives on these boards making alliances with the managers which are narrow and particular to that firm. The workers get caught up in the competitiveness of that firm, it stock prices and so on. He makes the point that it’s hardly the same thing as the common ownership of the means of production to have workers’ sitting on the boards of private companies, or even from workers’ funds to be owning shares and getting dividends from them. Nevertheless, it is a step in the right direction of socializing the economy more generally, and giving workers the capacity and encouraging them to decide what can be produced, where it’s produced, and what can be invested. And if it really scares British and foreign capital, this raises the question of whether they will have to introduce capital controls. Ultimately, would they have to bring the capital sector into the public sphere as a public utility, as finance is literally the water that forms the basis of the economy?

Mate then asks him about Labour’s refusal to hold a second referendum on Brexit, which angered some activists at the conference. Labour said that any second referendum could only be about the terms of the exit. Panitch states that people wanting Britain to remain in a capitalist Europe try to spin this as the main priority of the party’s members, even Momentum. He states that this is not the case at all, and that if you asked most delegates at the conference, most Labour members and members of Momentum, which they would prefer, a socialist Britain or a capitalist Europe, they would prefer a socialist Britain. The people leading the Remain campaign on the other hand aren’t remotely interested in a socialist Britain, and think it’s romantic nonsense at best. He states that the Corbyn leadership has said that they want a general election as they could secure an arrangement with Europe that would be progressive without necessarily being in Europe. They would accept the single market and a progressive stand on immigration rather than a reactionary one. They did not wish to endorse a referendum, which the Tories would have the power to frame the question. And this is particularly because of the xenophobic and racist atmosphere one which the initial Brexit vote was based. Panitch states that he is a great critic of the European Union, but he would have voted to remain because the debate was being led by the xenophobic right. He ends by saying that capital is afraid of the Trumps of this world, and it is because of the mess the right has made of things here in Britain with the Brexit campaign that capital might give a little bit more space for a period at least to a Corbyn government.

This latter section on Brexit is now largely obsolete because Labour has said it will support a second referendum. However, it does a good job of explaining why many Labour supporters did vote for Brexit. The editor of Lobster, Robin Ramsay, is also extremely critical of the European Union because of the way neoliberalism and a concern for capital and privatization is so much a part of its constitution.

Otherwise, these are very, very strong policies, and if they are implemented, will be a very positive step to raising people out of poverty and improving the economy. Regarding the possibility that the representatives of the workers on the company boards would ally themselves with capital against the workers, who put them there, has long been recognized by scholars discussing the issue of workers’ control of industry. It was to stop this happening that the government of the former Yugoslavia insisted that regular elections should be held with limited periods of service so that the worker-directors would rotate. Ha-Joon Chan in his books criticizing neoliberal economics also makes the points that in countries like France and Germany, where the state owns a larger proportion of firms and workers are involved in their companies through workers’ control, there is far more long-term planning and concern for the companies success. The state and the workers have a continuing, abiding interest in these firms success, which is not the case with ordinary investors, who will remove their money if they think they can get a better return elsewhere.

My concern is that these policies will be undermined by a concentrated, protracted economic warfare carried out against the Labour party and the success of these policies by capital, the CBI and the Tories, just as the Tories tried to encourage their friends in industry to do in speeches from Tweezer’s chancellors. These policies are desperately needed, but the Tory party and the CBI are eager to keep British workers, the unemployed and disabled in poverty and misery, in order to maintain their control over them and maximise profits.

The Brexit time bomb ticking under Wales’ public finances

Published by Anonymous (not verified) on Thu, 11/10/2018 - 10:30pm in

Across the political spectrum, there has been much discussion about what Brexit would mean for Wales, which has been a substantial beneficiary of structural funding from the EU and whose economy – more dependent than the rest of the UK on manufacturing and agriculture – is potentially much more exposed to the effects of Brexit than other parts of the UK (including Scotland, which voted to remain).

On the first point, the UK Government has given a partial commitment to ensuring that Wales will not lose out when EU funding ceases.  But that commitment expires in 2020 and, in any case, there is no guarantee on how that funding will be allocated – so, for example, the social care sector, which in Wales has been heavily supported by match-funding from EU Structural Funds, may have to fight its corner against the much more organised and influential agricultural lobby.  On the second point, the Westminster Government’s own figures suggest that the negative effect of Brexit on the GDP of Wales will be between a minimum of 2% for an EEA-style deal and potentially 10% for a WTO-type deal, emphasising that the greater an economy’s emphasis on manufacturing, the more damaging Brexit will be.  A report by the Senedd’s External Affairs and Additional Legislation committee concluded that frictionless trade with the EU was absolutely essential for the future of the EU.  And, as Carwyn Jones has pointed out, much of the strength of the Welsh economy derives from its ability to attract inward investment; and that investment is based on free access to the EU Single Market.  There is no doubt that any kind of Brexit has the potential to be seriously damaging to the Welsh economy.

But there is another serious problem for Wales, which lies in the changes to the arrangements for Welsh Government funding that come into effect in April 2019 – within days of the Brexit date.

Until 2019, Welsh Government funding has come almost entirely from Westminster, set according to the Barnett Formula; and more recently according to a formula based on Wales’ additional expenditure needs.  But from April 2019 that will change; the rate of income tax paid to Westminster will fall from 20% to 10%, with the other 10% being effectively raised by the Welsh Government, who will have powers to vary the rate.  The block grant from Westminster will be adjusted accordingly.  This means that, for the first time, the amount of tax raised in Wales – and therefore the amount of money available for public expenditure – will be directly dependent on the performance of the Welsh economy.  It’s a crucial step on the road to a fiscally-devolved Wales that manages its own economic policy, recognising that devolution is an ongoing process.

But the new regime raises some big issues when one considers the likely impact of Brexit in Wales.

A report prepared by the Wales Centre for Public Policy indicates that, although the difference between median taxpayer income between Wales and the rest of the UK is relatively small, there are significant differences in the structure of income that could have a profound effect on the future levels of revenue, and hence taxation.  One key finding is that around 22% of Wales’ tax base comes from employment in manufacturing industry – compared with 13% in the rest of the UK.  In other words, Wales’ fiscal position is far more dependent than the rest of the UK on precisely the sector that will be hit hardest by Brexit – especially a no-deal Brexit.

Additionally, the overall levels of revenue in Wales depend much more on income from basic rate taxpayers than from high-rate taxpayers than in the rest of the UK.  The top 1% of taxpayers contribute 12.3% of tax income in the UK as a whole, compared with 6.4% in Wales.  86% of tax revenues in Wales will be raised at the basic rate, compared with 70% in the rest of the UK.  In other words – any tax increases to meet shortfalls generated by a shrinking economy will almost certainly fall more heavily on basic rate taxpayers in Wales than they would in England.  And for tax revenues to keep pace with those in the rest of the UK, taxpayer incomes – especially at the upper end – will need to keep pace with those elsewhere.  But, as we have seen, Wales is starting from a structurally lower tax base, which is inherently more vulnerable to Brexit than the remainder of the UK.

Carwyn Jones’ economic strategy has been based around securing inward investment to Wales to create high-quality, decently-paid jobs in manufacturing and other high-technology sectors.  Under Wales’ new tax system, this should have brought significant fiscal benefits to Wales.  It would have allowed the country’s economic strengths to be reflected in growing tax revenues, allowing the provision of better services; in other words, a virtuous circle in a mature, sustainably-growing economy matching that growth to decent social provision.  But Brexit has precisely the opposite effect – instead of a virtuous circle it leads to the risk of a vicious cycle of falling tax revenues, declining services, and job losses in the public sector.  Put simply, it embeds austerity.  And the experience of local government in England – where the Tories in Westminster have argued that councils facing shortfalls should exploit their greater “freedoms” to raise revenue locally to maintain a bare minimum of statutory services – suggests that Westminster will use Wales’ new tax powers to wash its hands of Wales economic fate.  When have Westminster governments – of any political colour – prioritised the needs of Wales?

It follows from this that the only way to secure the kind of modern, progressive, economically strong Wales that Carwyn Jones has always advocated is to oppose any Brexit that gives Wales anything less than the benefits it already enjoys from the single market and the customs union – which means, in effect, given the options currently on the table, opposing Brexit completely.  For Welsh Labour, the only way in which the second of the Labour Party’s six tests – that there should be the “exact same benefits” as under membership of the Single Market and Customs Union –  can be met is by remaining in the EU.  Carwyn Jones’ position – that we need “full and unfettered access” has been, up to now, the right one; given the situation that Wales will soon face, his successor must go further.

So this is a particular issue for the candidates for the Welsh Labour leadership.  It simply isn’t good enough to stick to the Corbyn and Westminster line that we want a general election to allow us to negotiate a better Brexit – because the options Labour is proposing will be unacceptable to the EU for the same reasons as Theresa May’s Chequers proposals. The EU will not allow the UK to cherry pick.  At the absolute minimum, Labour politicians who are intellectually and politically serious about opposing austerity must  back a people’s vote on a deal, with a right to remain.  And they should have the courage of their convictions to be honest with the Welsh electorate:  Brexit means austerity, and the new tax system – itself a sign that Wales is ready to take its fiscal destiny into its own hands – increases the risk.  The only honest course of action for anyone who calls themselves a socialist is to oppose Brexit, unconditionally and unequivocally.

 

Archbishop of Canterbury Condemns ‘Gig Economy’, Tories Go Berserk

More hypocrisy from the Tory party. This week, the Archbishop of Canterbury, Justin Welby, gave a long speech attacking Universal Credit and zero hours contracts. He described the ‘gig’ economy the Blairites and the Tories have created, in which workers in insecure jobs are only called in if their bosses decide there’s work for them to do, and go without pay if there isn’t, the ‘return of an ancient evil’.

He made the speech after Labour had outlined its commitment to empowering workers, which included a comprehensive attack on the gig economy. Zero hours contracts will be banned, and employment benefits like sick pay and maternity leave will be extended to cover part-time workers. The party also pledged to end the ruse in which many firms seek to dodge their obligation to provide their workers with proper rights and benefits by making them officially self-employed.

The Archbishop mentioned Labour’s John McDonnell in his speech, who in turn praised the Archbishop. McDonnell said

“The Archbishop of Canterbury has set out a bold vision for a different society, one without the evils of the gig economy, the exploitation of workers and tax dodging of the multinationals.

“I welcome his speech, and the growing movement against the failures of austerity and neoliberalism. Labour will end zero hours contracts, clamp down on the tax avoiders, and ensure everyone has access to sick pay, parental leave and protections at work.”

The Tories, however, immediately went berserk, and showed their own hypocrisy when it comes to supporting the political intervention of religious leaders. They were more than happy when the former Chief Rabbi Jonathan Sacks claimed that Corbyn and the Labour party were anti-Semitic. However, they were outraged that the Archbishop had dared to criticize the wonderful Thatcherite capitalism they’d created.

The Tory MP, Ben Bradley, tweeted

‘Not clear to me when or how it can possibly be appropriate for the Archbishop of Canterbury to be appearing at TUC conference or parroting Labour policy.’

He added: ‘There are a diversity of views as to what is best for the economy, but [he] only seems interested in presenting John McDonnell’s point of view.’

Simon Maginn tweeted his response

Rabbi Sacks: “Jeremy Corbyn is an antisemite.”
Tories: “Listen to the holy gentleman.”
Archbishop of Canterbury: “Tories have increased poverty.”
Tories: ‘Must keep religion out of politics.”

Mike in his article notes that Archbishop Welby was unapologetic, and observed that ‘The Bible is political from one end to the other’.

Mike concludes

His intervention is to be welcomed.

The Church of England is often seen as a haven for Conservatives and it will be interesting to see what happens to those Tories’ attitudes, considering this new direction from the pulpit.

See: https://voxpoliticalonline.com/2018/09/13/tory-hypocrisy-over-archbishops-intervention-in-employment-politics/

This has been going on for decades. The Anglican Church has been described as ‘the Tory party at prayer’, and the Tory party itself was set up back in the 17th century by supporters of the aristocracy and established church against the more liberal Whigs.

However, the Church has also contained passionate reformers working against social evils. Archbishop Temple in his book, Christianity and the Social Order, published in 1942, pointed to reformers like William Wilberforce and the others in the ‘Clapham Sect’, who campaigned against slavery; John Howard and Elizabeth Fry and prison reform; and F.D. Maurice and the Christian Socialists in the 19th century. These latter wished to see businesses transformed into co-operatives, which would share their profits with their workers. This strand of Anglican social activism continued into the 20th century, and in 1924 the Anglican church held a conference to examine the question of how the Church should tackle the poverty and injustices of the age. Temple also pointed to the example of the pre-Reformation Church in attacking some of the economic and social abuses of the times, and particular Protestant Christian leaders and ministers, like John Wesley, after the Reformation.

He also quotes the Hebrew prophets of the Old Testament to show how property rights, while certainly existing and respected in ancient Israel, were also limited and intended to ensure that each family had their own portion of land and that great estates held by single individuals, did not develop. He writes

In the days of the Kings we find prophets denouncing such accumulations; so for example Isaiah exclaims: “Woe unto them that join house to house, that lay field to field, till there be no room, and yet be made to dwell alone in the midst of the land.” (Isaiah v.*8); and Michah: “Woe to them that devise iniquity and work evil upon their beds! When the morning is light, they practice it, because it is in the power of their hand. And they covet fields and seize them; and houses, and take them away; and they oppress a man and his house, even a man and his heritage” (Micah ii, 1, 2). And the evil here was not primarily economic, though that may have been involved. The evil was the denial of what Tertullian (c.160-230) would call ‘fellowship in property’ – which seemed to him the natural result of unity in mind and spirit. (p. 38).

The first chapter of the book, ‘What Right has the Church to Interfere?’, gives the reasons Temple believes that the Church indeed possesses such a right. It’s too long to list all of them, but one of them is that the economic structure of society is immensely influential on the formation of its citizens’ morals. Temple writes

It is recognized on all hands that the economic system is an educative influence, for good or ill, of immense potency. Marshall, the prince of orthodox economists of the last generation, ranks it with the religion of a country as the most formative influence in the moulding of a people’s character. If so, then assuredly the Church must be concerned with it. For a primary concern of the Church is to develop in men a Christian character. When it finds by its side an educative influence so powerful it is bound to ask whether than influence is one tending to develop Christian character, and if the answer is partly or wholly negative the Chu5rch must do its utmost to secure a change in the economic system to that it may find in that system an ally and not an enemy. How far this is the situation in our country to-day we shall consider later. At present it is enough to say that the Church cannot, without betraying its own trust, omit criticism of the economic order, or fail to urge such action as may be prompted by that criticism. (P. 22)

Temple was also very much aware how some politicians resented the Church speaking out on political issues. For example, Queen Victoria’s first Prime Minister, Lord Melbourne, is supposed to have said after hearing an Evangelical preacher that ‘if religion was going to interfere with the affairs of private life, things were come to a pretty pass’. Temple added

(L)ater prime ministers have felt and said the same about the interference of religion with the affairs of public life; but the interference steadily increases and will increase. (P. 15).

And the friction between the Tory party and the Anglican and other churches has been going on ever since Thatcher set foot in 10 Downing Street. She got very annoyed when the-then Archbishop, Robert Runcie, issued a report detailing the immense poverty that had been produced by her policies. Norman Tebbitt, her attack dog, made comments casting aspersions on the good clergyman’s sexuality, on the grounds that he had a sing-song voice and the slightly camp manner of many churchmen. He was soon showed to be very wrong, as Runcie had been an army chaplain, whose ferocity in battle had earned him the nickname ‘Killer Runcie’. A friend of mine remarked about him that the really hard men don’t show it.

The Church has gone on issuing reports and holding inquiries into poverty in Britain, and other social issues. And the Tory response has always been the same: to attack and criticize the Church’s interference. There have been comments of the kind that the clergy should stick to preaching the Gospel, and then they might have larger congregations.

But if Thatcher and the Tories didn’t feel that the Church had any right to interfere in politics, they definitely believed that they had the right to interfere in the church’s ministry and pastoral theology. And that this right was absolutely God-given. When Thatcher was on the steps of Number 10, she started quoted St. Francis of Assisi’s famous prayer, ‘Where there is darkness, let us bring light’ etc. She also took it upon herself to lecture the ministers of the church on the correct interpretation of scripture. I can remember her speaking to a conference of the Church of Scotland, in which she explained to the assembled ministers and faithful her own view of charity and the welfare state, based on St. Paul’s words, ‘If a man does not work, he shall not eat’. Needless to say, the guid ministers were not impressed, and showed it in the massed ranks of stony faces.

Temple was absolutely right in stating that Christians had a duty to examine and criticize the economic structure of society as the major force affecting people’s morals and character. But Thatcherism goes far beyond this. I’ve read pieces that have stated that Thatcher’s whole outlook was based on her peculiar right-wing religious ideas. Thatcherism isn’t simply an economic system. It’s a political theology. Thatcher was strongly influence by Keith Joseph, who was Jewish. It’s why she prattled about ‘Judeo-Christian values’ rather than just Christian values. I have no doubt that the Jewish readers of this blog will have their own views about proper Jewish morality, and that these may be very different from Joseph and Thatcher’s interpretation.

Thus in Thatcherism the free market is absolutely virtuous, and any interference in its operation is an attack on a divinely sanctioned system. But from the standpoint of a left-wing interpretation of Christianity, Thatcherite theology is like its economics, profoundly wrong, bogus and harmful. And her celebration of the free market turns it into an idol, an object of false religious worship.

More and more Christians both here and in America are turning against this idol, just as left-wing Jews are turning against right-wing politics as incompatible with the liberal politics of traditional Judaism. The Church has every right and, indeed, a duty as a moral body concerned with people’s spiritual welfare, to attack Thatcherism and its destructive legacy.

I’m very much aware that we now live in a post-Christian society, where only a minority attend Church and most people profess to have no religious beliefs. Just as there are also sizable non-Christian communities, such as Jews, Muslims, Hindus, Buddhists and the various neo-Pagan groups, who also have every right to make their voices heard politically. Temple also advances other reasons why the Church should speak out on more rational, non-religious grounds, such as morality and common human sympathy for the victims of suffering. I hope, however, that regardless their religious views, people will support Welby on the issues of employment rights as an entirely justified attack on an iniquitous situation, which desperately needs to be corrected.

Work to barely pay for returning mothers, inquiry told

Published by Anonymous (not verified) on Mon, 18/06/2018 - 4:11pm in

Tags 

childcare, tax

The third and final stage of the government's proposed income tax cuts would overwhelmingly benefit men, late evidence presented to the Senate inquiry shows.

The inquiry will report on Monday that calculations prepared by the Parliamentary Budget Office show 1.894 million men would benefit from the final flattening of the tax scales and only 767,000 women.

The third stage lifts the threshold for the top rate from $120,000 to $200,000 and removes the 37 per cent rate, producing a flat marginal rate of 32.5 per cent between $41,001 to $200,000.

The PBO has previously told the inquiry the final stage would deliver $30.35 billion to men over four years and $11.25 billion to women.

It finds that the impact of the first two stages is much more even.

In a second piece of late evidence requested by the committee, Melbourne University tax expert Miranda Stewart reports that the effective marginal tax rate facing women considering returning to work after having children would remain as high as 95 per cent even after all three stages of the tax cuts and the changes to child care benefits due to begin on July 1.

Effective marginal rates include tax, the Medicare levy, lost family benefits and the cost of the childcare needed to return to work after government subsidies.

On July 1 the two existing childcare subsidies will be rolled into one providing a means tested subsidy of up to $11.77 per hour at an extra cost to the budget of $4 billion over four years.

Professor Stewart said at the moment the effective marginal tax rate for a second earner with two young children paying for childcare at that rate was 65 per cent when returning to work one day a week, 85 per cent on the second day, 95 per cent on the third day and 140 per cent and 160 per cent on days four and five, meaning those families lost income when mothers moved from working part time to full time.

"It was extraordinary that second earners went back to work full time at all," she said. "The reality has been that a proportion of women do go back to work, and the family is essentially bearing the net cost, unless they can use grandparents or friends for care or a cheaper option such as family day care.

The combination of the new childcare system and the first wave of the promised tax cuts would bring down the effective marginal rates to 45 per cent for day one, 65 per cent for day two, 90 per cent for day three, 95 per cent for day four and 90 per cent for day five.

"It means the returning mother will still only be able to keep $10 out of every $100 earned on day three, $5 on day four, and $10 out on day five," Professor Stewart said.

"It will certainly be worthwhile for a second earner, usually a mother, returning to work with young children to go back two days a week; however, for her to work three, four or five days a week would produce a negligible financial benefit."

A separate report to be released by the Australia Institute on Monday finds that since the tax changes that accompanied the introduction of the goods and services tax in 2000-01, most taxpayers have had all of so-called bracket creep returned in periodic tax cuts, whether bracket creep is calculated with reference to the consumer price index or the wage price index.

In real terms, high earners on $200,000 were up to $10,000 per year better off, low to middle earners on $40,000 up to $2000 better off, and middle earners on $70,000 only a few hundred dollars a year better off.

In The Age and Sydney Morning HeraldPeter Martin is economics correspondent for The Age and the Sydney Morning Herald.

He blogs at petermartin.com.au and tweets at @1petermartin.

Pink vs blue tax: the case for taxing women lightly

Published by Anonymous (not verified) on Thu, 14/06/2018 - 4:20pm in

Tags 

column, gender, tax

If women were to be taxed differently to men, it wouldn’t be the first time.

Treasurer Scott Morrison says the idea is absurd.

“You don’t fill out pink forms and blue forms on your tax return. It doesn’t look at what your gender is any more than it looks at whether you are left-handed or right-handed,” he said last week.

He even said, wrongly, that Labor has been suggesting it.

But such a move has happened before.

In Britain right up until 1971, wives weren’t usually taxed on their income; their husbands were. A wife’s income was deemed to be “stated and accounted for by her husband”. It wasn’t until 1950 that wives ceased to be classified for tax purposes as incapacitated along with “infants, lunatics, idiots and the insane”.

South Australia broke ranks early, in 1884, taxing married women as individuals and giving them the right to own property. By the time the Commonwealth introduced national income tax in 1915, all the states had fallen into line.

What possible modern-day reason could there be for taxing women differently to men, as mentioned by Melbourne University tax expert Miranda Stewart in evidence to the Senate last week?

Morrison himself provided a clue while ridiculing the idea. He said the Tax Act was designed “to treat people’s income the same, and so you pay tax according to what you earn”.

But we don’t. Someone who earns $1000 from wages pays twice as much as someone who earns $1000 by making a capital gain selling an asset. Income from capital gains is taxed more lightly in accordance with what’s known as optimal taxation theory. It suggests taxing heavily things that tax is unlikely to stop, such as work, and taxing more lightly things that tax is more likely to stop, such as the movement of capital. It’s the basis of the argument for a lower company tax rate as well as a lower capital gains tax rate.

The concession isn’t “fair”, but it’s efficient.

As would be the logical extension, which is to tax female wages more lightly than male wages. Male work turns out to barely react to after-tax pay. Most men will continue to work full-time regardless of what happens to what they take home, regardless of how much they grumble.

Some will work a bit less if their take-home pay falls, because they are offered less of a reward. Others will work a bit more in order to get back the income they lost. On balance the “price elasticity” of their labour is close to zero.

Women are different. Most European and American estimates put the price elasticity of their labour between 0.4 and 1, meaning a 10 per cent boost in their take-home pay will lift their hours of work by between 4 per cent and 10 per cent.

The most efficient way to tax labour would be to heavily tax generally unresponsive male work and more lightly tax generally highly responsive female work, depending on elasticities. Economists Alberto Alesina from Harvard University and Andrea Ichino from the University of Bologna in Italy believe women should be taxed at no more than 80 per cent of male rates in the US, at no more than 68 per cent in Italy and no more than 91 per cent in Norway.

And there’s another argument for discriminating on the basis of gender. It’s that, for most of us, gender is innate. We won’t change it. Tax theorists say that, ideally, we should be taxed on our underlying ability to earn an income rather than the income itself. Otherwise some of us with ability will avoid tax by avoiding earning an income. Although the ability to earn is hard to measure, markers for it are easy to measure, such as height.

In a half tongue-in-cheek paper entitled The Optimal Taxation of Height, Harvard economists Gregory Mankiw and Matthew Weinzierl note that someone who is 183 centimetres tall can expect to earn $US5500 ($7300) more per year than someone 165 centimetres tall. They say tall people should pay several thousands more in tax than short people on the same income. It’s a way of getting at their earning capacity, as would be a higher tax on the earnings of men.

And there’s yet another practical reason to tax women more lightly. The withdrawal of family benefits and the imposition of childcare costs as mothers return to work mean some face extraordinarily high “effective” marginal tax rates of up to 90 per cent. If ever there were people who ought to be affected by high tax rates, it’s returning mothers.

But here’s what’s odd. Australian mothers are hardy. When the Productivity Commission recommended a new, simpler and more generous formula for childcare support along the lines of the one introduced in this year’s budget, it found it would boost employment by just 15,000 full-time worker equivalents in a workforce at present growing by hundreds of thousands per year. More than mothers in the United States, Germany and Britain, Australian mothers seem undaunted by tax rates. The case for treating them gently is strong in theory, weak in practice.

In The Age and Sydney Morning HeraldPeter Martin is economics correspondent for The Age and the Sydney Morning Herald.

He blogs at petermartin.com.au and tweets at @1petermartin.

Ken Livingstone: The Establishment Is Terrified of A Socialist Getting in 10 Downing Street

Published by Anonymous (not verified) on Sun, 03/06/2018 - 2:23am in

This is a short clip from RT’s Sputnik programme of Red Ken in conversation with his old Labour comrade, George Galloway, and his main woman Gayatri. They’re discussing the prospects of Jeremy Corbyn and whether he can defeat the Tories in the next election.

The clip begins with Red Ken saying that Corbyn will fight on to the end, as they both know, because they’re like him and rebelled against the Labour leadership on the same issues. Livingstone says that he wishes a documentary-maker would come and make a film about all those rebellions, and see how many of them were right. Jeremy voted against war after war, and against the imposition of taxes on the poor. He then says that the establishment is terrified of a Socialist getting into 10 Downing Street.

Galloway then asks LIvingstone if he thinks this could really happen. He says that the Tories are ‘all at sea’, that Brexit is a mess, as is the economy, but the Tories are now4 points ahead in the polls. And Galloway’s afraid that if the Tories get in again, not only will Britain be broke, it’ll be broken. The Scots will almost certainly vote for independence, and even he – Galloway – couldn’t vote against it in those circumstances.

Livingstone replies by saying that the economy is indeed in a terrible state. Growth is negligible, there are jobs being created, but they’re low paid, insecure with no pension rights, and this is the worst economic situation they’ve seen in their lifetime. But there is a chance for Labour to get in. Before the last general election, they were predicting a Labour wipeout of more than 100 seats lost. But instead Corbyn led them to the biggest electoral gains since 1945, and they came within two per cent of beating the Tories. This was despite 81 of his MPs trying to unseat him. He says that Corbyn was able to make these gains despite the establishment running the smear stories about him supporting terrorism, or giving information to Czech spies, because once their in the election period, the TV has to give equal space to them. And Corbyn talked about issues, like low pay, and unemployment, which really connected with people. The same issues that fuelled the rise of Trump.

The clip ends with Leninspart predicting that the campaign against Corbyn will now become even nastier. There’ll be even more lies and smears, just as earlier Galloway remarked on how they’re now trying to get rid of Corbyn using salami tactics. But once the country gets into the election period, it’ll be different.

Frightened Davidson Tells May to Concentrate on Funding NHS

A day or so ago I put up a post arguing that Corbyn’s promise to renationalise the NHS had Tweezer and the Tories rattled, as there had been a story in the I that May had held the promise of repealing some of Andrew Lansley’s vile Health and Social Care Act. This is a long, convoluted act which basically absolves the Health Minister of the requirement to provide universal healthcare free at the point of delivery to everyone in Britain. It’s one of the major landmarks on the long campaign of the Thatcherite right – both Tory and New Labour – to privatise the NHS. May was also talking about increasing taxes to mend the funding deficit in the NHS. This was, however, spoilt by May acting true to form as a Tory. She immediately declared that everyone would have to pay this tax, which could be as high as £2,000. Mike’s posted a piece on his blog about how this was worked out, and pointed out that not everyone should have to pay the same amount. We have progressive taxation in this country, which means that the rich pay higher rates of tax than the poor, who can’t afford it. The Tories, however, hate progressive taxation, because they’re solidly on the side of the rich and despise the poor. And so Thatcher, Major, Cameron and now May have done their best to shift the tax burden onto the poor, in order to lower the tax rates on their rich friends. And Thatcher came unstuck in 1990/1 when she tried to promote the poll tax.

Like May’s proposed tax increase for the NHS, this was supposed to be a uniform rate charged on rich and poor alike. It was expected to replace the rates, which were charged on the value of your property. So a rich Tory donor living in a mansion was going to be charged the same amount of money as someone on unemployment benefit living in a simple terraced house. Never mind: Thatcher and her cabinet of grotesques claimed this was ‘democratic, because we all pay the same’. The British public didn’t agree, and there were massed protests and riots against it. I also know of a number of magistrates, who resigned because of it. As Justices of the Peace, they would be required to enforce this piece of legislation, which they personally felt was terribly unjust. And rather than find people guilty in support of a law, with which they profoundly disagreed, they obeyed the calls of their consciences and resigned. And I have every respect to these people for doing so. Thatcher was then outed in a coup, Major installed as her replacement, and unfortunately the Tories carried on in power until Blair’s victory in 1997.

It struck me at the time, as I said in my previous article, that May was probably trying to scare people with the £2,000 figure, which many poorer people wouldn’t be able to afford, so she could claim that the NHS is unaffordable as it stands. Cue more privatisation. Despite the fact that we could easily afford it if we took a leaf out of the European’s book and spent more on the NHS, and increased the tax rates for the rich instead.

But the fact that May is holding out the prospect of undoing her predecessor’s legislation, and raising taxes for the NHS, shows that Corbyn’s got her rattled.

And not just May. It also seems to have worried ‘Rape Clause’ Ruth Davidson north of the Border. The I ran a story on Tuesday reporting that Davidson had warned may to concentrate on increasing funding for the NHS, and ditch plans for more tax cuts. If she didn’t, she risked relegating the Tories to history.

This shows just how far the panic is spreading in the Tory party. Quite apart from Davidson and Gove forming a think tank – surely an oxymoron in their cases – to reinvigorate the Tory party with new ideas. Because, they warn, if they don’t have them, the Tories may be out of power for a whole generation.

Well, I’d just love to see this vile party and its horrendous politicians thrust out of power, and not just for a generation. That’s too short a time.

As for the gurning, smirking leader of the Tories in Scotland, today’s I carried pieces from a couple of newspapers predicting that Davidson is too young, ambitious and talented to be content to remain head of the Tories in Scotland. According to them, she will most probably try to head down south to forge a political career in Britain and Wales. What a terrible prospect! Davidson is responsible for trying to implement the government’s wretched austerity campaign in Scotland, including its demand that women, who’ve had more than two children due to rape, should have to prove this is the case when claiming child benefit. Hence her soubriquet of ‘Rape Clause’. It’s a nasty piece of vindictive legislation which punishes already vulnerable women, who have been traumatised by their sexual assault. But this is the Tories, who have absolute contempt for the poor, the weak and the underprivileged. Davidson is supposed to be a ‘liberal’ Tory, but there’s no evidence of that except her sexuality. And despite May’s attempts to position herself as a feminist, this is a thoroughly misogynist piece of legislation. The last thing the rest of Britain needs is for her to come down south to spread even more misery down here.

Actually, reading between the line, it’s possible that Davidson may not have a choice. For all that she’s supposed to have masterminded the revival of the Tories in Scotland, she didn’t actually increase their vote. Instead, the SNP’s vote decreased and Labour’s revived, which split the opposition and allowed the Tories to emerge as the largest single party, even though most
Scots voted against them. Which is another argument in favour of proportional representation. Given the parlous situation of the Tories in Scotland, it’s possible that the Scots may vote them out. This would result in the party looking around for a new leader, and Davidson given her marching orders. In which case, if she wanted to continue her career, she’d have to go south.

I don’t want her coming to England and Wales, but I look forward to the Scots voting out the Tories and their thoroughly grotesque and objectionable leader.

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