The following was commissioned for publication elsewhere today. It missed its intended audience of a couple of million or so, but what the heck? Here it is anyway:
“George Osborne has delivered the biggest single shock to the well-being of this country since the onset of the Second World War.
There's a big difference though. That war was necessary. We were genuinely all in it together. What Osborne has done is absolutely unnecessary. Worse still, as the Institute for Fiscal Studies has already shown, Osborne has designed his cuts to make sure that those with the narrowest shoulders bear the biggest part of the burden - which is exactly the opposite of what he told the House of Commons.
I'm not surprised by any of this. Osborne is an ideologue. He started his shadow chancellorship flirting with flat taxes. That’s a system designed to eliminate all higher rate taxes — paid by the rich - altogether. And I well remember once being told by his team that Ireland, in attracting companies like Google to its shores - even though they pay little or no tax there, was the example the UK should copy. Well, Ireland is now in complete economic meltdown and it looks to me as if George is trying to copy them after all.
The outcome of his cuts will be like the outcome of the Irish cuts. There won't be a massive boost to the economy. There won't be a cut in the deficit. There won't be easier times ahead. There will just be an economy that heads into terminal decline with companies and people trying to get out as fast as they can.
It's easy to explain why. No one, whether they are a household, a company or a country can repay their debt by cutting their income. And that is what George Osborne is really doing. By slashing government spending, by making half a million people in the public sector and as many again in the private sector redundant, he might be claiming to cut government cost but what he is actually doing is something much more sinister and dangerous. What he is doing is deliberately sucking demand out of our economy.
Those one million people won't be spending much any more. And that means other private sector jobs will be lost as well — because businesses won’t be selling as much. And in turn that mean business won’t be investing either because why invest when no one is going to buy what you’ve got to sell? So there will be no investment and so no new jobs. The result is obvious. We’ll not have 490,000 people without work — I estimate we might have 1.6 million people out of work as a result of what George Osborne has done.
That is 1.6 million people won't be paying tax any more. But they will be claiming benefits. Even if they are the new, reduced ones. So far from saving money, George Osborne’s so-called cuts will actually increase spending whilst massively reducing his tax income. The consequence is obvious. The deficit will go up, not down.
This is the real likely outcome of what Osborne has done. But because he does not understand some pretty basic economics he is slashing the services we all need, and is in doing so denying himself the money he needs to clear the deficit that the banks - not Labour — created. That's about as close to an economic suicide note as you get.
But the one thing you can be sure of is that George won't suffer as a result. He is safe and secure, as are his chums in the Cabinet and in the City of London. He knows that. And he wasn't going to risk changing that comfortable position. That's why he has instead imposed his cuts on ordinary families, on children, on women - because many more of them will be made redundant within the state sector than men, on the elderly who won’t get the healthcare they require because the NHS won't have the money it needs for our growing number of old people, on the vulnerable, the disabled, and those who can't work through no fault of their own.
For these people Osborne is not just delivering an economic disaster — he’s delivering a personal disaster too. For these people depression won’t be just economic — it may well be medical. But as my wife — a GP — says, depression is almost always a sign that something is wrong and that there is a need for change. Depression is caused by anger about that thing that is wrong turned inwards. And it can only be resolved by letting that anger out. In which case now is the time to begin shouting about your disgust, to tell the world you’re angry. The answer it to start protesting about what’s happening — peaceably — now in any way you can. Because otherwise we’re all doomed — unless you’re very rich. “
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Hi there Richard.
I’m the angry (and surprised by strength of feeling) Twitter user who kicked off the tweet about Vodafone’s tax evasion using luxembourg last thursday which ended up reaching 400,000 accounts.
I’m now attempting to get some strength of public feeling expressed through the petition you reported: it really does look from the outside that our government was stared down by Vodafone – and this simply isn’t good enough. As you point out in this article: George knows he’ll be OK, as will the parliament, the MPs, the CBI and the big businesses who lobby in ways we, the public, cannot.
The replies and support I’ve had have been funny, uplifting, occasionally challenging, but overall overwhelmingly supportive.
My firm belief is that the cozy conspiracy-like atmosphere in London will not be tolerated as these cuts bite. Noises from Danny Alexander and the coalition about going after tax evaders are precursors to going after nickel-and-dime offenders rather than the Vodafones of this world (the India story is interesting, ESP the VP suicide) and the people cannot put up with this much longer. The media are driven by circulation and viewing figures. All it’ll take is the right feedback and the touch paper will be lit – the media will ask more and more why people are being evicted, starving, freezing while banks give out the usual bonuses and Vodafone and their ilk walk away from their social contract here to pay towards the country’s upkeep.
Your column is a stimulating read. I’ll be keeping an eye on your opinions.
Cheers,
Andy watt (Basexperience on Twitter)
@Andy “basexperience” watt
Good work, I say
And you’re right – people will not put up with this
The Revenue have to act or another front in opposing the ConDem cuts will be wide open
I’m no fan of the ConDems – but I’d rather they tackled the tax issue first
Keep them on notice – please
Richard
Not just George Osborne – 24 of the 29 members of the cabinet are multimillionaires, and they won’t worry about the cuts either. I was thinking about how perplexed I was as a child by the Victorians putting debtors in prison, because how were they going to repay their debts? Perhaps someone should direct Osborne to Dickens… but on second thoughts it might give him even more dreadful ideas.
“We’ll not have 490,000 people without work — I estimate we might have 1.6 million people out of work as a result of what George Osborne has done.”
I know three people who had been out of work for nearly a year (all aged over 45) who have all been offered and taken up well paying jobs in the last month (one at a US Fortune 100 company, one at a UK multinational with worldwide operations and one at a UK based international supplier of business data). Not as well paying as jobs they might have had before about 2005 but far ahead of anything they were offered (if anything) in the last 2 years of Labour.
What has changed? Money is as tight as before at each of the firms and there are no rash investments, but all three firms are prepared to invest in new people in the UK whereas under the last 3 years of Labour governemnt they were only prepared to hire people at the lowest tiers in their organisations. The UK (outside London) was seen as an unattractive place to invest, with high costs and a government deficit that signalled future tax rises. There is a perception amongst many businesses that the current government is getting to grips with the problem even though government spending will still increase year on year for the rest of this government.
Richard,
To really udnerstand where power truly lies in this country consider this:
It has taken the Tories just 5 months in office to reverse many of Labour’s benefit reforms and help to the vulnerable through the welfare system.
The sucker punch though is this: the Tories haven’t even had to gain a majority in parliament to do it.
Contrast that with Blair’s social democratic policy paralysis post 1997 despite a 179 seat majority!
If that realisation isn’t enough to make one angry, I don’t know what will.
So it is now tax evasion by Vodafone! Perhaps you have a better understanding than most of this matter and could share this with us.
@Andy “basexperience” watt
Nice comment/s.
But: The MSM are not THAT shallow. They are, after all, owned by people who possess staggering wealth and hence influence.
The continuing global-warming arguments show that facts rarely influence reporting.
At the end of the day (or parliament) those now running the show will be wealthy, those who may be running the show will be wealthy, and those who [with an outside chance] could possibly be running the show will be wealthy.
Hardly the recipe for caring and sharing or taxing.
As I pointed-out some time ago, sending the tax onto building sites to catch a few labourers and to a few burger vans to catch a few benefit crooks, is a lot easier than catching the corporate crooks (many of who are not crooks but use the accounting services available to evade the tax)
Then again, Mr Osbourne, if he had his way, would reduce or eliminate tax for those who “create wealth”.
Hardly the person who will enlist more tax inspectors to end the current deficit-generating tax avoidance industry.
@Justin
I stress – as my own work says – Vodafone has not tax evaded
I suspect Andy makes the mistake so many lay commentators make – and that’s why I allowed it on
Most lay commentators reverse evasion and avoidance, in error
I don#’t – and repeat – Vodafone has not evaded
@BenM
I’m angry Ben
We have to be