From the TUC: There is an alternative to the current mania for public spending cuts.
The coalition Government has said that reducing the deficit in the public finances is “the most urgent issue facing Britain”. To do this, they want to cut spending by at least £60 billion (around 10%). Some think the cuts could well be considerably higher.
There will be some tax rises to help pay off the Government’s debts but the great bulk of the savings are to come from cuts.
Already we’ve seen heavy spending reductions in areas such as support for unemployed young people, universities, youth services, legal aid and the Child Trust Fund.
The Government argues that the cuts are unavoidable. They also argue that they can be made without damaging services or the wider economy or hurting the most vulnerable — that these will be “fair” and “progressive” cuts.
This is fundamentally wrong.
Looking at the historical experience of cuts in previous recessions, you can see that spending cuts will:
- damage the quality of public services
- damage the wider economy and jobs
- hurt the most vulnerable.
But most fundamentally, the cuts won’t actually reduce the deficit. Because spending reductions will hurt the economy and create unemployment, tax incomes will actually decline. This actually means the deficit is likely to get worse.
In short, the Coalition Government will impose a great deal of pain on the British people for no gain.
We want to help make the case that there is an alternative to cuts — a better way to reduce the deficit.
Read our report, All Pain No Gain: The Case Against Cuts to find out more.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
There are links to this blog's glossary in the above post that explain technical terms used in it. Follow them for more explanations.
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
Buy me a coffee!
Richard, what is the source for the statement in the paper that “it has been shown” that recruiting another 20,000 HMRC staff would raise £20bn of tax? The paper cites the “Great Tax Parachute” paper; this gives the figure as an estimate without showing any underlying calculation or giving any further references.
@Marc Daniels
It’s a composite of the work that could be done – based on the research summarised in the Great Tax parachute – to tackle evasion and avoidance
The Great Tax Parachute is of course also a summary of much other work
The grossly simplified summary of all that work is that if there’s £1230 bn lost then £20 billion might be recoverable and more people employed would achieve that
Nothing else will achieve that
In a recent tax publication, Graham Black the president of ARC (the HMRC union) makes the following comments:
and
Whilst I don’t have access to the data on which these comments are based, I for one have no reason to disbelieve him.
Much as I’d like to hope that presure from the likes of the TUC, warnings from the OECD and figures which show that export-led growth is (and will remain) a myth would lead to a change in direction, Richard, in truth I doubt it very much.
Why? Because these polices are the manifestation of a deep-seated ideological project (neo-liberalism) that has at it’s core the redistribution (rather than generation) of wealth and income to an elite. The primary mechanism for achieving this is what David Harvey calls ‘accumulation by dispossession’ – something which has been happening in the “background”, as it were in this country since the 1980s, although more explictily pursued elsewhere (e.g. Argentina, China, Mexico, etc, etc). I quote (the last sentence is particularly pertinent re the actions of ConDem government):
‘…accumulation by dispossesion. By this I mean the continuation and proliferation of accumulation practices that Marx had treated as “primitive” or “original” during the rise of capitalism. These include the commodification and privitization of land and the forceful expulsion of peasant populations (…China and Mexico); conversion of various forms of property rights (common, collective, state, etc) into exclusive private property rights (most spectacularly represented by China); suppression of rights to the commons; commodification of labour power and the suppression of alternative (indigenous) forms of production and consumption; colonial, neocolonial, and imperial processes of appropraition of assets (including natural resources); monetization of exchange and taxation, particualrly of land; the slave trade (which continues particularly in the sex industry); and usuary, the national debt and, most devastating of all, the use of the credit system as a radical means of accumulation by dispossession. The state, with its monopoly of violence and definitions of legality, plays a crucial role in both backing and promoting these processes.’
Harvey, D. (2005) A Brief History of Neoliberalism.
As elsewhere in the world over the last 30 years (or more), once in power those of a neoliberal bent (in politics, media, etc) will not easily – if at all – give up on this project.
Should have checked for errors before posting. That should have read ‘policies’ and ‘its’, of course.
@Ivan Horrocks
I agree
We’re talking challenging those who are trying to enclose the commonwealth of public good here
They won’t give up lightly
@Richard Murphy
So it hasn’t “been shown”, then?
Following up on the comment about ARC earlier, the link below contains another link to the ARC report “Being Bold”, published earlier this week:
http://www.fda.org.uk/Media/Union-launches-radical-report-on-tackling-public-debt.aspx
How much more money do you print when you have already printed trillions of it? How much more do you spend when the deficit is already beyond $2 trillion?