As Emma Agyemang in Copenhagen and Chris Gilesl have noted in the FT big read today:
[The] entire consensus around taxing and spending could start to crumble [soon]. Since the 1980s ushered in Reaganomics in the US and Thatcherism in the UK, the dominant political idea in many advanced economies has been smaller states that do less and tax less.
What they make clear is that this consensus may be over. Governments have appreciated their need to spend more. Borrowing capacity may be constrained. Tax, is then the answer. And in that case, knowing who to tax more on, and what revenue is capable of being raised is critical.
That is what the Taxing Wealth Report will be about.
Of course there will be many on the right who will deny that the world is changing. But the reality is that the era of asset stripping government is over. Around the world it is apparent that underinvestment has left states impoverished. Simultaneously we need a green transition. In that case tax is going to be back in vogue, whatever politicians might say now. Nothing else will make the economic equations work.
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Whilst agreeing with the blog, there is another angle to this (spending), which in the case of vile-liebore and its weird “don’t spend” policy will force change.
Sir Kid Starver aka “Mr Law n Order” will in the first weeks of gov face this problem (which by 2024 will have “evolved”):
https://www.theguardian.com/society/2023/sep/05/germany-refuses-extradite-albanian-man-uk-jail-conditions
Specifically, more courts in the EU refuse to send back people that appear to have committed crimes in the UK, likely, given defense lawyers will soon pick up on this, cue
the UK Meeja will start to howl & Kid-Starver & co will have little choice but to open the money taps with respect to jails.
But.
That means “they are spending money on crims” (new meeja narrative opens up) instead of crumbling schools, starving children,….. the list is long.
The talentless mediocrities that Kid Starver has just selected will crumble & vile-liebore will be exposed for the sham that it is.
Or
Reeves is ditched and the money taps opened. Stranger things have happened. If vile-liebore get into power, I give it less than 6 months before they make the current crew of vile-tories look competent.
I totally agree, but are we going to get a burying and defenestration of thatcherism from politics?
Are we going to have plenty of parliamentary commissions to explore and hang the people who enabled this out to dry?
Is Laboured going to dig into BREXIT and the Tory party criminality and depravity to make sure the public knows what it has got up to?
The only way to secure the future is make sure everyone knows this truth.
Otherwise, we’ll just be reinvesting in the public sector for it all to be asset stripped again at some point.
We need hearings about the NHS, Covid, housing, social services – the lot.
We need to make sure that the Tories are seen for what they are – toxic, poisonous to the people of this country.
We are experiencing very high levels of inequality of responsibility. Anyone who is over-paid by DWP will be pursued quite aggressively even if they have little. An ‘ordinary’ person who defaults on credit card payments or rent or council tax will be pursued aggressively frequently resulting in greater debt. Protestors can now be prosecuted for making too much noise. A campaigner at an illegal fox hunt is more likely to be arrested than the organisers of the hunt.
On the flip side some politicians have been able to say anything, however untrue, with little fear of ramifications. A business, lets say for example a chain of trendy resturants, is able to run itself into the ground at which point all the employees are left with nothing, but the owner can waltz off, their own private fortune intact. Water utility companies can regularly and illegally dump sewage into rivers, any legal actions running at a glacial pace.
If an ordinary person engages someone or some entity for services they pay upon receipt of the bill, corporations and the very rich withhold payment, without sanction, for months.
The list of these inequalities is long, many we are all familiar with. Some of our leaders play these out right in front of our eyes. At what point can be expect them to be brought to account?
Having read through the FT ‘Big Read’, suggesting the need for higher taxes on wealth (and commenting that many issues will need to be dealt with), your Taxing Wealth Report 2024 would seem very appropriately timed… (are you sending a link to the FT?)
I might…..
Birmingham City Council has just declared itself effectively bankrupt.
https://www.bbc.co.uk/news/live/uk-england-birmingham-66717957
Country falling apart.
The old Tory way has failed. Labour will be foolish to think they can just fix it.
This reminds me of the film Jaws, “we are going to need a bigger boat”.
And remember, they STILL got overwhelmed by the Great White, even with a bigger boat = Starmer’s near certain fate, given his asinine narrowness of vision.
Labour believe that they can fix it by management rather than funds. Both will be required.
To be fair Birmingham are the authors of their own downfall. LA equal pay claims were settled everywhere else 15 years ago. Birmingham decided to fight when they couldn’t win.
I thought I understood in the case of a fiat currency such as ours, tax does not pay for public services provided by central government?
It doesn’t
But tax is required to stop the inflation that arises when the government spends more in an economy heading for full employyment.
I make the point often, but most people miss it.
We were losing WW2 when Churchill came to power.
We are losing the climate and environmental war – much more seriously.
Stuka bombers and panzer tanks were terrifying symbols of danger then … but wildfires, droughts and melting glaciers are pretty vivid for any political leader (or commentator) convinced of the need for dramatic action.
When Covid restrictions were first announced, the public reacted strongly as requested. The usually congested A35 through Dorset carried only the occasional vehicle. The public will respond when a serious policy is properly explained – and nobody has another planet to live on!
Petrol was rationed from 1939. In 1942, the UK petrol ration for private motoring (including journeys to and from work) was reduced to zero.
From Pearl Harbour onwards, the maximum legal speed in the USA was 35 mph.
Fossil fuels mean CO2 emissions!
In WW2 there was a blackout for fear of bombing raids. If all inessential lighting was forbidden now, it would save a bit but, importantly, it would be a highly visible symbol that action was being taken.
Why do we need Grand Prix motor racing when our children’s lives are in such danger (Probably most adults are in more danger than politicians and pundits are admitting)?
And if the dangers are as great as I believe they are, why are there Olympic Games – or indeed why is there any professional sport that involves journeys greater than, say, from Liverpool to Manchester?
I have no means of assessing the financial impact of serious measures to cut greenhouse gas emissions to the maximum extent possible in countries such as ours.
What’s your guess, Richard?
Churchill was ready for our country to act alone. If ours acted alone now, the low countries might act out of self-interest and follow suit. Then other countries. One must hope …
That change is so big I have no estimates
I get your point, but Churchill was an insider with a long track record (albeit, checkered) of government, he didn’t spring from nowhere. I cannot see anyone on the political landscape with equivalent clout making the case.
If we we depend on “cometh the hour, cometh the man” we are 9 times out of 10 going to be disappointed and let down (as well as ignoring 50% of the population). We need a massive change to politics (it is half of political economy) as well as to economics (it is the other half)…many people get the logic but are unable to break out of the party system. Political discipline kills thinking – Starmer is just like Lenin imposing “democratic centralism”
I heard (at a Compass meeting) from someone who could know that Blair/Brown both read JKGalbraith The Culture of Contentment and that contributed to their giving up on anything radical, but I also heard Ken Clarke say the tories couldn’t understand why Blair was a Labour politician.
We urgently need to do something different…
https://brianfishhope.com/index.php/abstract
I think Galbraith was radical
His son certainly is
Lord Ashcroft this week published a detailed report about his polling results relating to what people think is the role of government, with the very apposite title The State We’re In.
https://lordashcroftpolls.com/2023/09/the-state-were-in/
The message that comes over loud and clear is the complete opposite of Tory policies (no big surprise) but also of current Labour policies. Put bluntly, if his sharp move to the right is designed to attract more votes, Starmer is barking up the wrong tree in the wrong wood.
It turns out people want more regulation of businesses, they think people have a right to things like decent housing, healthcare, education and enough to live on, and the government has a responsibility to make sure everyone has them, people (supporters of the Tories included) want water, gas, electricity and railways to be nationalised.
And much more along the same lines.
I don’t recall seeing big headlines in the press drawing attention to these very important findings (again, no big surprise).
We face a crisis of almost all of politics being out of line with what people want