George Monbiot asks that question this morning in the Guardian. He wants a positive agenda of demands for the 26 March TUC rally in Lonodn - one that does not exist yet as this is still being seen as an anti-cuts rally.
George suggests the following demands(and I paraphrase him a lot):
1. Address the cuts through tax increases, not cutting spending. He highlights removing the NIC earnings cap as one way of going forward.
2. We must close the tax gap. Tax avoidance and evasion are the preserve of the very rich: only millionaires and corporations can afford the specialist advice required to disguise their earnings. The tax gap amounts to between £40bn and £120bn a year. Not all this money can be reclaimed. We need a national target to claw back £25bn a year. Staffing levels at HM Revenue and Customs should be raised accordingly.
3. Of the various means of reclaiming money from the banks, a financial transactions tax — the Robin Hood tax — is the fairest and the most sustainable.
4. By 2020 levies on damage to the environment should amount to 20% of the total tax take, with a commensurate reduction in the income tax and national insurance paid by people with low earnings.
5. The tax exemption for private schools must end. This costs us £100m a year — to grant unfair advantages to the children of the rich.
6. Introduce a wealth tax.
7.Raise the minimum wage by inflation plus 5% each year until it reaches the level identified by the Living Wage campaign.
8. We also need an official high pay commission, whose purpose is to identify — as a multiple of the living wage — the maximum remuneration anyone in the UK should receive.
9. Scrap Trident weapons system, aircraft carriers and Eurofighter jets. The Barrow shipyard, where new nuclear submarines were to be built, should be redeployed to produce offshore renewables: wind, wave and tide turbines. The money saved should be spent on a new public housing programme.
10. To fill looming gaps in provision and reduce unemployment, the government should raise the public workforce by the following levels: 10,000 more social workers; 10,000 more planners; 50,000 more hospital cleaners; 100,000 more educational staff; 350,000 extra care workers for the elderly. As Unison points out, 92% of the cost of employing a public service worker is recouped by the state, because it raises tax revenues while reducing benefit payments.
11. We need a steady state commission, to develop a government programme for turning a growth-based, boom-and-bust economy into a stable system, without damaging the prospects of the poor.
As George says:
I can't speak for anyone else, though I've borrowed plenty of ideas in compiling this list. The point is to encourage the brave and brilliant groups organising the protests to produce their own brief but specific statement of aims. We know what you're against. Now tell us what you're for.
Unsurprisingly I like some of these a lot - I played a strong part in developing 1, 2 and maybe 10. I have also contributed to 3. I support 11.
But I'm not sure the list does all that's needed. In particular - much as I like 6 I am not sure it will work as George suggests, and think refinement needed. I also doubt the Robin Hood Tax will raise the sums suggested, although I think it of significant benefit anyway - taxes are not just about raising revenue. They also correct socially harmful activity.
That's why my programme has a different emphasis. Sure, I want tax reforms. A lot of them. And I want to tackle the tax gap. But I also want to promote new and really beneficial economic activity in the UK - who will not harm a steady state outcome either. So I have proposed we close the tax gap and then do these things:
Second, we need to kick start an industrial strategy
This country has not got an industrial strategy and we need one if we are to restore widespread prosperity and wellbeing without increasing employment in our economy. That means we have to invest now, and keep up that investment for some considerable time to come so that we build employment opportunities based on new products and services in the private sector and provide the essential infrastructure that the state must build, whether it be transport systems, or energy, or housing, or schools or hospitals that is essential if those employment opportunities are to be created — and all of them free of the curse of PFI.
This means that the next round of quantitative easing must not support the banks. It must support investment in all these things — and since the private sector seems at present quite extraordinarily reluctant to invest it must support this investment in the infrastructure the state must build most of all. This though is not quantitative easing as we’ve known it — it is green quantitative easing, the name I’m giving to the process where the Bank of England lends money to a genuine national infrastructure bank that invest in rebuilding our economy — both through the public and private sector to ensure we create the employment we need. This will, in turn, create the liquidity we need in the economy to ensure that the banking system can continue to operate.
Third, pension reform to deliver real investment
And then, thirdly, this process has to be continued into the future. We have to ensure that there is ongoing real investment, not in financial “innovation” but in real wealth creation and real infrastructure that underpins that wealth creation by the people of the UK. That can come from the type of reform of the UIK pension system I have recommended in ‘Making Pensions Work’. We must require that at least 25% of all the pension contributions made in the UK be invested — not saved — but invested in wealth creation opportunities in this country. If that is through that same national infrastructure bank, that’s fine with me. If it is direct in new share issues by UK companies seeking to create new employment opportunities — and can prove that this is the case — then that’s fine too. But in this way I am convinced a further £20 billion can be released for investment in the UK economy.
Adding it up
Add that to the £20 billion from tackling the tax gap and add it ion to the funds green quantitative easing would inject into the economy and a substantial source of long term funding for the UK economy has been found. In all I have shown we can find £20 billion for revenue spending and £40 billion for investment, at least, a year from within the UK economy — enough to close much of the so called fiscal deficit and enough to kick start the UK economy.
The third reform costs us nothing - there is only upside in ending wasted speculation in it.
For the second - we have proven out capacity to undertake quantitative easing to save banks - we can do it to create a Green New Deal.
The importance of these now rather than focussing on extra tax now is that taxing now will take money out of the economy - money needed to keep people in employment. I do not want mass unemployment on the way to a transition - I'd prefer that transition was orderly. So I am promoting new and alternative employment opportunity first and as the economy recovers then we need more tax and restructuring of the system.
But systemically we must create the economy we need first.
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Doesn’t even come close. The deficit is £170 bn. Income tax receipts are around £150 billion. You could try doubling the rate of income tax, but then you would just see a drop in VAT, and other duty receipts. The problem is that the government is spending too much compared to the underlying economy.
If you want to address the issue, then a “green” economy is not the answer. There is little to be gained from technological superiority in a currently uneconomic industry (remember Concorde) and to saddle UK industry with higher production costs will not stimulate growth. And don’t bother arguing that green energy creates employment, because anything that produces the same commodity (electricity) with fewer input costs will eventually prevail. If you hobble what is left of British inductry with higher costs for the sake of creating some short term ekmployment then we are all doomed.
Pensions?
@MarkT
We don’t need to close £170 bn
The structural deficit is much smaller – if we have one at all
That’s all that needs closing
And innovation in the face of peak oil does not pay? That’s a very odd argument indeed
i really don’t like phrases like “tax avoidance and evasion are the preserve of the very rich”. this simply is not true… a significant element of the tax gap comes from perfectly ordinary people paying/working ‘cash in hand’, buying slightly shonky cigs and booze, or being slightly less than honest on tax returns. it’s wrong for mr monbiot to explicitly fuel the myth that only the wealthy avoid tax.
i agree with a number of the suggestions (notably re. living wage, trident and a wealth tax) but no manifesto for reform should be built from the misguided idea that everyone who’s not a millionaire willingly and enthusiastically follows all the rules and renders up all tax due.
It is likely to be 10 or 15 years before the renewable sector produces energy at a comparable price point to fossil fuels and that will be due to the fossil fuel price rising rather than the cost of renewables coming down. That is likely to have its own benefits to European industry because the advantages of lower manpower costs in India and China will be offset by higher transport costs, but at the moment there is little to be gained from having labour intensive energy sources while there is still a fair amount of oil gas and nuclear power available.
@MarkT
And then we move over at the flick of a switch?
Don’t be daft
Outrage and disgust are filling the hearts of ordinary working people as they see their societies ripped apart by inhuman cuts under the fallacy that the only way to reduce the deficit is by destroying the role of the state. The propaganda of the Conservative/Liberal coalition is exposed in the following
Are the Government cuts necessary? The answer to this question may be no, as there are a number of ways of reducing the deficit. The fairest way would be to substantially raise taxes. Taxes put a higher burden on wealthy people and leave necessary services untouched.
Suggestions like this produce the response by the wealthy “why should I pay more?”. The answer is that nearly all wealth is created by ordinary working people and it is hard to imagine anyone who is self made in economic terms. All wealth appears to be dependant on ordinary working people in the following ways
A. Most company’s need workers to make a profit.
B. Share markets banks etc need company’s to speculate on (Thus Workers)
C. Retailers and wholesalers need customers to make a profit (workers)
There are many more examples where working people provide the means for wealth creation even the unemployed serve an economic purpose by keeping waged labour lower. The aforementioned would appear to suggest that ordinary working people are the bedrock of wealth generation on whom most are dependent. With this in mind, it seems fair and reasonable to make the people who have benefited from others pay more in taxes. This could be done in numerous ways some are listed below.
A. Vat/Tax on private Education.
B. Vat/Tax on private Health.
C. Substantial increase in inheritance tax by introducing a number of tires that progressively take more as the value of the estate goes up.
D. Substantial increase in council tax by introducing a number of tiers above where it is caped at the moment.
I am not an economist and tend to see economics as more of an Art than a Science and can see how easy it is to be lured into the agenda of the right and believe that low tax economies are the only successful way to go. Below are a few suggestions as to why this view may be a fallacy if they don’t satisfactorily answer your response they may at least open up the debate.
1. If you look at America before the economic collapse one can see a low tax economy producing great wealth with the belief that this will somehow trickle down and every one will prosper. This would seem to be a myth as it would appear that a significant part of the population then and now lack sufficient medical cover and welfare provision .
2. Higher taxes it may be suggested can contribute to a system of welfare and education that allow creativity and wealth creation, through that sense of security the individuals feels able to extend themselves. Investment in students brings both individual and economic rewards to society. Investing in arts and sciences fosters both creativity and innovation.. some company’s it may be suggested are only interested in the maximization of profit and not a long term legacy thus the role of the state starts to become apparent
3. I am informed that the UK after the Second World War faced huge debts but was still able to set up the NHS and bring about the Welfare State. This begs the Question how was it done? The answer in large part appears to be through higher taxation
4. After the election both the Conservatives and the Liberals suggested that the basic rate of tax would have to go up by about 6% over a number of years to close the deficit and the only way forward was cuts to welfare and the role of the state. It may be suggested that the above-mentioned figure could be significantly lowered By extending inheritance tax in line with the value of the estate ( The lager the estate the higher the percentage)and higher direct taxes upon the wealthy which seems fair as wealth creation seems in large part dependent upon labour (see above). Closing loop holes in offshore bank accounts may gain more revenue this could be done by making private companies disclose salaries (as the public sector now has to do) and profits and encouraging employees to report tax evasion and abuse by offering a reward and freedom from prosecution
@dizzyingcrest
You are an economist – and a lot of what you say makes a great deal of sense – more than can be said for 95% of tose who claim the title