As is my usual habit, I have been listening to a variety of debate programmes, such as Question Time, Any Questions and Debate Night in Scotland. Doing so has left me with a sense of deep frustration.
The frustration has one common cause. It is the lack of imagination shown when addressing questions like “What are we going to do with the NHS?” or “How are we going to pay for whatever service it might be that the questioner wants to see improved?”
The over-arching assumption of those answering such questions is that there is an absolute shortage of resources within our society to now pay for services that we could, not so long ago, enjoy. There is, as a consequence, discussion of reform, outsourcing, and measures that fall little short of privatisation, all of which will apparently deliver the desired outcome or something approximating to it.
I have little sympathy with most of these suggestions for three reasons.
The first is that pretty much without exception, we need more, and not less of the services that are being discussed. The implication of the discussion is, however, that in almost every case we cannot now have what he once enjoyed. I find that incredibly difficult to accept. If we were once upon a time capable of educating our children, caring for the sick, providing for the elderly, delivering justice, protecting communities, and providing affordable homes for all those who need them, then in my opinion the only reason why we cannot do so now is because of a lack of willing to find solutions to make these things possible.
Second, as I have sought to show with the Taxing Wealth Report 2024, the idea that there is no money available to address issues is simply ridiculous. In a country where financial wealth amounts to £15.2 trillion (or a staggering £287,000 per adult person, except that most have very little of it because of its deeply unequal distribution), it is simply not possible to claim that there is no money. What there is, instead, is an absolute lack of willing to raise the necessary funding to both provide public services and prevent inflation from those with the resources to pay the necessary tax to achieve these goals.
Third, there is an extraordinary lack of willing to challenge the existing hierarchies of wealth that are reflected within the tax system.
This last point is particularly important. For example, no one questions why we spend almost £70 billion a year subsidising the pension savings of those who are, in the main, already wealthy when cancelling all such relief would allow the reallocation of that sum so that it might be used to increase the current old age pension of every single person over the age of 66 in the UK by about £5,500 per annum. In many cases, this would represent an increase in their income of almost 50%.
If Labour was really serious about reducing demand in the NHS then there is very little his party could do that would be more effective than this. It has been proven that providing pensioners with sufficient income to ensure that they can have adequate heating significantly reduces demand on the NHS. Providing them with the opportunity to buy sufficient good quality food would have much the same effect, whilst giving pensioners currently living in poverty the chance to have a bit of social life would reduce the demand for mental health support for some exceptionally vulnerable people.
I am not pretending that anyone is likely to take such a radical step. On the other hand, if people are really serious about reforming well-being, why aren't they at least willing to put such ideas forward for discussion? Aren't we at the point where radical thinking is required?
And before anyone says that I am ignoring other groups in society, if we need to provide additional funds for education (and no one really doubts it) then, as I have noted in the Taxing Wealth Report 2024, £18 billion could be found by imposing an investment income surcharge equivalent to national insurance on investment incomes. Or, more than £12 billion might be raised by aligning income tax and capital gains tax rates, which sum could make a significant difference to social care.
Plenty of other options are available.
In other words, we really do have a choice on these issues. We can support the current hierarchy of wealth and quite significant inequality in the UK that blights the lives of millions in this country, including more than 1 million children who have to share beds or who have to sleep on the floor. Or we could relieve that poverty and still leave those with high income and wealth with most of what they have.
Moreover, we might not need to tax as much as people think. The NHS would face considerably reduced demand if what I propose was to happen.
Schools might be places where people really want to work again, and where education can happen.
And if social care functions, the savings in costs in crisis management would be enormous.
Simultaneously, police on the beat and a functioning court system might encourage more people to have more faith in the society in which we live.
In every case, the paybacks could be very significant.
I do not, however, ever hear such things mentioned. At best, I hear about minor tinkerings on the peripheries of the problems that we face with no one apparently having the courage to stand up and say that if the current system does not work, as is clearly the case, then we really do need to re-imagine just what the state is for, who it is meant to serve and what resources it requires so that everyone in society can have the best chance that we might provide.
Is that too much to hope for?
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All excellent points…. do make them. This is where differentiate yourself from the status quo and add value to the debate.
Use your limited time on this subject and don’t get sucked into any debate on the Middle East (beyond a brief statement of your principles).
Wealth has been very clever at reserving freedom for itself – liberty from the collective (society, law, accountability, social norms, making the exception for themselves etc.,) and therefore a detachment from the rest of society. This is where my talk of being more illiberal is aimed at – a curtailing of this decoupling.
This is what your Taxing Wealth Report has done to me anyway – I’d like to see it all implemented just to see what would happen and take it from there. Wealth has done really well throughout austerity and Covid and their loose money is tainting our society.
Is this too much to ask for? I’m afraid it is at the moment. I’ve just read a book about Bobby Kennedy and it got me thinking.
I think we live in a time where political conservatives have failed to find compassion, and where liberals have failed even more miserably to reconcile the individual with the collective. Such as we are, we are increasingly left without answers to our problems in the West.
Robert Kennedy looked to me to be a new sort of politician who might have reconciled the difference between Right and Left bringing together compassion and collective sentiment, ‘making gentle the life of the world’.
The way he tried to do this is well described over and over again: by doing what many politicians even today still not do the world over: Robert Kennedy went and looked. And when he went to look, he found things to do that only political leadership could sort out. And he committed himself and his country to do just that. But he never got the chance.
Too many politicians are quite happy to listen to their funders and talk to focus groups these days. That is not democracy in my view. Bobby Kennedy could have chosen to sit back and look at America through the lens of his own privileged life but chose not to.
How many of our politicians in the Tory and Labour party have visited a NHS hospital waiting room recently or gone to a job centre or actually seen the havoc that their lack of ideas is having? Or watched hungry children turn up to school?
Too few I wager. And therein lies a big problem.
If only one could hear Starmer come out with the words “This party will not put up with greed!” Followed by announcements of policies to tackle it then there would clearly be less despair in the country. But Starmer has evaded taking any such stance and as Shakespeare would say “There’s the rub!”
Yes you are completely right. But it is because we are viewing an economy through money which focus it on saving it. When we view an economy through resources the potential to meet everybody’s needs is readily apparent. I like to extend the credit card analogy to explain this. If a family has a maxed out credit card and someone looses their job, they can either sit on the sofa and watch TV and say woe is me or they they could grow food in their garden, do some DIY, make some cloths. Some of which they could sell to neighbours. The family will be richer if not in monetary terms. Currently this nation is being told to sit on its arse and watching TV.
Maybe….
Neoliberalism depends on people sitting on their sofas, watching TVs; where they can be constantly but discreetly reminded what to think, when to think and how to think.
It is termed ‘the News Agenda’.
“The over-arching assumption of those answering such questions is that there is an absolute shortage of resources within our society to now pay for services that we could, not so long ago, enjoy.”
I’m building a bridge, & I’ve run out of inches for measurement,
The two sentences have exactly the same amount of logic……….none.
What is puzzling is that nobody in the meeja is capable of even remarking “hang on a sec”, such is the level of brainwashing. Perhaps their morning exercises involve running along a corridor, head down – and straight into a brick wall?
Interesting? sad? pathetic? I can commend the Skidelsky article linked to by Mr Schofield the other day (see below).
https://www.project-syndicate.org/commentary/boris-johnson-global-shift-from-monetary-to-fiscal-policy-by-robert-skidelsky-2020-02
I was having dinner last week with some Commission officials – we bemoaned the fact that our efforts had no impact. The reality is that we are dealing with priesthoods, be they concerning electricity markets, the action needed to de-carb the EU or, … in the case of central banksters how to fund everything. The UK “Treasury” is also the preserve of priests. The Skidelsky article notes the Treasury’s dead hand – & one which is self-perpetuating – Reeves was taught not to think – whilst @ the BoE (an extesion of the Treasury) ditto oh so many other people. I have a very good economist friend (actually some of my best friends are economists 🙂 ex-Commission etc. He was offered a job by the UK Treasury (following an interview) – he found them boring, staid, fixed in their ways, incapable of thinking, but that is a description of many/all “priesthoods”, who for the most part are fantasists – they believe in stuff that has no connection whatsoever with the real world & how it operates, or, increasingly in the case of the EU & the Uk – how it does not. Example: the imbecilic Germans can’t even make their trains run on time – problem? – lack of money – cause? – ECB “religious rules”, watch as the German cabinet goes into a heads-down, bums-up in front of the ECB. I confess to a certain amount of shcdenfreude in this particular case – particularly when German friends go into full-on whine mode.
And as many of us have stated the failure of the extreme centrist priesthood with their worship of neoliberalism will be to drive us headlong into fascism.
Came across this really interesting article the other day, puts some perspective on the recent Tory (and New New Labour) war on Net Zero and chimes with much of what Mike says about the EU / Germany / energy market failure: https://www.politico.eu/article/robert-lambrou-alternative-for-germany-heat-pump-election-climate-change/
Skidelsky’s piece is a reminder of something that has been debated here often enough before, over the distribution of QE. As Skidelsky implies, QE’s purpose may be summarised as: “Quantitative Easing (QE) involves large-scale asset purchases by a central bank, financed by the creation of central bank reserves.footnote. These purchases seek to boost aggregate demand and hence inflation” (‘QE at the Bank of England: a perspective on its functioning and effectiveness’; BoE QB 1, 2022). Note that QE has operated since 2009, yet the BoE confesses that “it is important to recognise the difficulties faced in extracting strong conclusions from the available experience”. In short the BoE struggles even to identify convincingly what has happened because of ‘small sample’ and ‘identification’ problems. Oh, dear perhaps the identification problem is not helped by failing to examine with sufficient independence the use of a distribution network for QE entirely dependent on a narrow, privileged, pre-selected collection of insider vested institutions/interests consisting of elite commercial banks and dealers. It doesn’t work.
I must read that
I am beginning academic work on QE
This is crucial Richard.
I can no longer listen to QT etc for the very reasons you note.
Its about the BBC not allowing such voices. Even their health correspondent Nick Triggle is now promoting what could well be a lethal falsehood – that covid is becoming a seasonal cold – rather than causing cardiovascular, neuro, and other long term damage to organs, in a significant number of covid sufferers. Some hospital managements threaten their own staff – if they dare to covid test themselves.
Is this a democracy when certain thoughts and certain information are not allowed?
Along with your TW report, we have to keep intoning ‘anything we c an actually do we can afford’ until someone has to respond.
Agreed, including on the absolute absurdity of Covid reporting when significant numbers are in hospital
Thanks
For the first time in over 3 months, Norway is exporting no electricity to the UK over the interconnector. No amount of redistribution will change this this morning. It’s down to the value of your currency – other neighbours with harder currencies are willing to pay more when the wind isn’t blowing and the sun isn’t shining.
You could literally give redistribute all that property wealth perfectly – it won’t change reality or generate additional non-financial resources.
Livejasmin
Just in case you were not aware green energy takes many other form than just sun and wind.
The tides will flow, waves still form, tidal bores will run, and hydroelectric power will be available to us regardless every single day of every year for a very long time.
Sorry to disappoint you….green energy is efficient relatively cheap and on this island of ours plentiful
A common danger with any major reform is trying to do too much, too quickly. Too often changes are made too fast, making it impossible to identify and fix mistakes before they become serious problems. Part 2 of Taxing the Wealth needs to address this, and provide a credible path from where we are now to where we need to be, recognising that it is neither possible nor desirable to get there in one giant leap.
I agree that no one would do all these recommendations in a go, or maybe at all. But I do think haste is required. Nonetheless, I hear what you say.
Thanks
Is it worth a “traffic light” system where all your ideas are ranked….
Green – easy to do, relatively uncontroversial. (Cut pension tax relief)
Amber – more complex to implement and/or controversial (Eg abolish NI, equalise income and capital gains tax rates)
Red – difficult and needs more work. (Eg. Capital gains on primary residence)
Of course, you may code things differently but it might allow campaigners to target more effectively.
I think that when I come to summarise the proposals made that will be a good idea
Thanks – it has proved a good answer for a colleague of mine spouting the ‘no money’ rubbish.
Is it optimism or just hope that the positive political impact of so many of your proposals combined with the necessity for investment in health services can (should) have many benefits? Ditto with education etc. If once Labour begins to give attention to your report, I find it hard to see how they will be able to resist implementing more and more of it.
The logic is compelling in sharp contrast to the feeble justifications for much current activity – or inactivity.
Limits on some types of spending are urgently needed but austerity doesn’t deal with either environmental imperatives or crushing inequality.
During WW2, rationing was not popular with the rich – but it was appreciated by the poor. I suspect that the terrible housing situation will never be improved until there are serious efforts to restrict – or heavily tax – the ownership of more floor space than is necessary.
A few weeks ago, I mentioned by own unexpected ‘notice to quit’. It will now, I trust, be resolved by the purchase of the flat from the current landlord by my family. But that’s just my problem. Coastal Dorset has abundant second homes most of which will be little used until the spring – apart from a few days around Christmas. The few properties available either to buy or rent are subject to prices which estate agents escalate with requests for ‘Offers in the region of … ‘. Somewhat poorer people now have to travel further and further – on ever diminishing public transport services – for work or education.
Richard,
Heres to your idea about ending Pension Tax Relief, but what are the wider implications? What is the average – mean on median Private Pension?
If we were to end Pension Tax Relief and put the money into the State Pension what percentage of the population would be better off? OK I would not be but I suggest that very many would be.
Even more radical, what about ‘nationalising’ or giving the option of buying a better State Pension to all the holders of ‘small’ Private Pensions? I imagine that given the saving in admin costs and the states ability to spread the risk many would end up with better pensions AND if the state took not the cash but the underlying investments the start of a National Wealth Fund?
To answer those questions wouild need more research than I have done.
As i have noted, this may not be the best diea available: what I use it as is an examople of radical thinking that needs further exploration.
For any individual it is a relatively simple actuarial calculation to determine (using market interest rates and mortality rates) what a pound today is worth as an inflation linked annuity starting at (say) 67 years old.
This would vary over time and savers would not know what a pound saved next year might buy but savers would be able to decide at each point whether to participate or save elsewhere. The government would be well placed to offer this service as it is uniquely able to manage the risks.
The infrastructure (NEST) is already in place so although there is a lot of detail to look at it ought to be straightforward.
Many do this type of calculation when considering voluntary NI contributions.
Private providers might be unhappy… but perhaps that is the whole point!
Can you write that up as a blog post?
Hi.
Could you give a source for the £15.2 bn of the UKs financial wealth? I am wanting to use the figure frequently when as a Sheffield Councillor in debate.
Thank you.
Cllr Bernard Little
It is 15.2 trillion. Source data is here https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/datasets/totalwealthwealthingreatbritain