I out this poll out on Twitter yesterday morning, and it closes soon:
The question is, I think, binary.
There is no way that we are going to save the planet for human habitation without greater government investment. That is, in turn, going to require the reorientation of savings away from private sector deposit takers and towards government based savings mechanisms that will provide the capital to make this process possible. Anyone can pretend otherwise, but I just don't see how we can do it in any other way.
In that case, if we insist on calling government provided savings facilities ‘government debt', then that debt is going to rise as a pre-condition of our survival.
It would seem that the respondents to this poll understand that.
What we know is that Rachel Reeves does not. And that makes her a threat to the survival of everyone's children.
There's no subtle way of stating that fact, for fact it is.
And that's why a large Labour majority at the next election could be a catastrophe, unless someone can persuade the Party leadership to change its mind.
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It would appear, judging by today’s column from Polly Toynbee in the Guardian, that some Labour members have taken your suggestions about taxing wealth on board and claimed them as their own. I have little respect for Margaret Hodge but she is correct in identifying the massive and arcane tax relief giveaways currently enjoyed by big business and the wealthy. Link here: https://www.theguardian.com/commentisfree/2023/nov/30/britain-margaret-hodge-commons-tories-economy-labour?CMP=GTUK_email
I see only a few overlaps, and Margaret lost credibility some time ago, as did the U.K. tax justice movement.
The main issue with the Toynbee article is that it assumes that Hodge, Reeves, and the current Labour leadership actually want to greatly increase taxes on the wealthy and big corporations – Hodge was a major figure in the 13 years of New Labour and it’s not like she was pushing for all of this back then when she had the chance. But I’m curious about how you see the specific measures Toynbee claims Hodge would enact. Are you just sceptical of how far Hodge would want to go, or is it the specific measures themselves that you doubt even if Hodge was genuinely wanting to increase taxes for the wealthy? If we imagine that Hodge and Reeves were genuinely going to enact all of the measures Toynbee outlines how viable do you see the following measures from the article as being for raising tens of billions or even £100bn+? Or are there issues with them such that you don’t see how they could raise that kind of revenue? According to Toynbee:
Last year only 11 wealthy individuals were prosecuted for tax cheating so this would be greatly increased
Eight tech companies including Apple, Google, and Facebook pay a tiny amount of tax from their vast profits so this would be greatly increased
£350bn is lost through fraud and money laundering and so Hodge would prevent a large amount of fraud and money laundering to presumably get a substantial amount of this £350bn
Billions lost to Covid fraud which Hodge would recover
There are 1180 tax reliefs, with 100 of these costing £195bn, and so she would eliminate a lot of these tax reliefs, and also Toynbee notes that Reeves announced £174bn tax reliefs that will be reviewed
£18bn spent on homeless families, so instead spending this on homes would both reduce homelessness and save a lot of the costs of homelessness.
My problem is nothing is said
She refers to the tax gap and some think it bigger, which obliquely is me. But she says nothing about how to collect it.
The Tax Watch estimate uses a methodology I created. But the data is old and fails to recognise that HMRC have the data to address this now – so there is likely little to win there now
The £350bn of fraud is a flow, not income, and is not tax able in all likelihood. It makes no sense to claim that much if it is.
And I quantify the allowances we can address, and this article claims we don’t know when I show that we do.
It’s just all very lame when I have shown there are real answers to hand.
And Polly has had the Taxing Wealth Report.
Just to cheer you up, there was a council by-election yesterday in Highgate which was won by the Green candidate, who had originally been a labour councillor who crossed the floor after saying that labour wasn’t listening. The by-election was because Sian Berry is going to be the Green Party candidate to take over from Caroline Lucas in Brighton Pavillion.
Very complicated but good news for the Green Party.
Bad news for labour as it’s Starmer’s constituency.
Thanks JenW. Any good news is welcome these days. The more ‘greenies’, the better.
If I understand government Debt correctly it mainly consists of savings. So the government will never tax away peoples savings (of the rich) so as usual the debt will go up and continue to be used as an excuse to cut spending.
I do not think that follows
Inspired by Mr Warren on another blog entry – and with apologies- my response to the question posed by this blog is based on a trip to Ireland on family business. I saw Ireland – for all its warmth and beauty – as a microcosm of the issues facing us all.
My brother currently works as a dumper truck driver who also has responsibility for the trucks themselves. Indeed, it is common for him to be out and about delivering aggregates all day and returning to the farm he is based on and having to fix the trucks as well for no extra money. My brother already has issues with the Irish health system he has been paying into for 30 odd years because he has a rare and disabling condition that is threatening his viability as a wage earner that they keep cancelling treatment for. The Irish health system is also under huge pressure because of a lack of funding (get used to those 3 words).
When I arrived in Ireland, the same day the Irish Independent was reporting a crisis on the Irish Health and Safety Executive who was not doing its job because of a lack of funding. I spent nearly a week with my brother in his lorry just to be with him. It was a real eye opener – fun too – I met lots of interesting and rather real people.
The HSE crisis struck home because of where my brother works:
The quarry is not lit at night.
There are no guards on the stone crushers with men working next to huge flywheels and crushing equipment.
There is no site/welfare cabin on site with basic amenities at the quarry or the farm. No toilets or hand basins. I cannot describe to you what they have to do instead. Indeed throughout Ireland, conditions for lorry drivers compared to the continent and even the UK are a joke. Yet road transport dominates.
Many of the minor roads are not lit at night.
It seems that most of the farmers I’ve met are those who have used the farm as an an asset to diversify into aggregates, haulage, building services, bottling plants, stud farms, executive homes etc., and those assets are being worked very hard indeed alongside the animals that they have – in fact some of the animal husbandry I’ve seen is the worst I’ve ever seen anywhere and also in some cases the best.
Another thing cracking off in Ireland that very day I arrived was that there was a riot in Dublin after a stabbing outside a school. Since then, the Irish Independent and Irish Times has been reporting about everything about the riot – from the possible resignation of the Justice Minister to that of the head of the Garda. Fintan O’Toole writing in the Irish Times blamed fascism but wrongly I felt under-emphasised poverty – poverty is the kindle wood of fascism so in a way he was right but also, (sorry Fintan mate) wrong.
It turns out reportedly that Garda officers on the night of the riot had to go home to collect their tactical/riot gear – it was not stored in any of Dublin’s Garda stations!! The internet – where online organisation of the riot had taken place – was not monitored sufficiently because of Garda staff shortages (lots of retirement etc). Both these was attributed to the under-funding of the Garda. Another issue was that the Garda had been previously pulled up for breaches of behaviour codes for being too heavy handed, so the Garda seemed confused about how the society it was supposed to protect should be protected. I still get the feeling however that it is not the Justice Minister or head of the Garda that needs to be sacked but the Irish Finance Minister who seems to talk like a certain Andrew Bailey/Jeremy Hunt!
The last I read that the Garda were to buy two water cannons, and be issued with stronger tasers (amongst other things). I understand from the Irish Times that the Mayor of London recently scrapped the water cannons Boris Johnson as Mayor purchased for London? I bet the water cannons are cheaper than more and better equipped Garda as well as more generous benefits for the poor of Ireland eh?
Anyhow, at the weekend we went to a gig at a well known venue south of Cork and the craic and particularly the Murphy’s on tap was superb (sod Guinness). The two bands we saw spoke about their cancelled gigs in Dublin and spoke out about right wing fascism. However on the way home, the Brother and I had a blazing row about immigrants that had been simmering since I’d got there. Thankfully blows were not exchanged, I did not have to walk back home and things calmed and points were conceded. But I was struck by how difficult things were for my brother and how easy it was to start thinking that way and allow fascism to sneak into your life – I heard his friends and customers saying the same thing nearly all day. He said to me that what was the good of him knowing what I knew since there was nothing he could do about it? All I said was that it was about mental health defensive fitness and not allowing some fascist to put their words into your mouth. He seemed to get it. But I see this in a lot in people who are stressed by hard times.
I found this weird because my brother is well know and liked in the area, but he is too forever an immigrant from England and if push comes to shove, the indigenous Irish always back their own and he comes off second best. I saw this at first hand – but note this is maybe a phenomenon in most societies – not just Ireland.
The other issue then that raised its head is exactly what is going on information wise. Having mixed with multi-generation Irish and friends and family I’m afraid it does not look good. Most of the people I’ve met are not towns folk and many out rightly distrust their present government, if not detest them. Newspapers sell, but I’ve never seen them sell out. No one I was around seemed to read a newspaper. They were too busy working or sorting something else out.
Most of the info/content seems to be delivered online and I would rank content as follows and is just one long continuous mass distraction exercise:
1. Pornography. Honestly, its everywhere. Men and women selling themselves online for readers to join up and pay online – all permutations catered for. Online Sex(?) obviously cheers people up!!
2. Celebrity culture, mostly salacious, related to………….
3. …………Wealth porn – who has what, how much and how you can be the same (yeah right), what are they spending it on?
4. Reality TV – loads of manufactured crises that apparently one should be concerned about, never mind any real crisis.
5. Identity politics – this seems to be a competition to find the the worst treated segment of the population, ignoring the fact that everyone seems to be suffering.
6. Oh yeah – and fascism too.
The fact is that trying to get a certain portion of the population to realise what is actually happening to them is going to be a huge problem.
At the end of the weekend, Broheim took me to a well known coastal spot for a walk with the dog. The tide was out and I took pictures of Egrets, Cormorants and Oyster Catchers (the biggest I’ve ever seen) until the wind changed direction and we were overcome by the stench of raw sewage. We stopped and looked around us and realised that the beach we were on was covered in non-marine matter as well as the marine type (what looked like a stranded jelly fish was actually a used prophylactic). We quickly got out of there and retreated back to a coastal path instead but I was struck by the fact that it was not just England that had problems with processing its sewage. And why?
So, what is working in Ireland? Well, top of the list is housing – new, big expensive housing – single multi bedroomed executive type homes – that’s what my brother was delivering aggregates to in order create another indicator of wealth – long drives into the executive homes. These were usually on farmland in the middle of no where, the latest trend being slate fronts and white stucco. These were everywhere and can be said to be the new mansion generation, owned and built by farmers or Germans or English/Dutch. Some of them I can only describe as vast in size. Agricultural land is being sacrificed to houses for the rich. And then what?
And the other growth area it seemed is new cars – SUVs and high end German cars are everywhere in Ireland. And you need a car out here for sure. And many of the roads my brother was driving down can only be described as very poor too outright dangerous.
Given that a lot of the infrastructure in the rural areas can only be described as ‘shite’ what we have once again is private opulence at huge public cost – just like in the UK, the US and perhaps increasingly in Europe. Money can be made for mansion houses, cars and even stud farms but not to equip and ready a nation’s security service for a riot or fund its HSE or health services sufficiently enough.
And the tax take on working people in Ireland seems to be very unfair indeed. I’m going to talk to my brother and nephew about this a lot more but working overtime seems to be simply not worth it in Ireland even with a cost of living crises there too.
A lot of investment in Ireland has taken place that it extractive – but just because you have more shops and petrol stations selling you stuff does not mean that you are a modern, equal society. Please note Mr Varadkar. But this lack of simple infrastructure and service investment seems to be a world wide thing.
Whilst reading the Irish Times (Derek Scally, 24th November, ‘How Germany’s Obsession with Debt could ultimately paralyse it economy’) its economics section mentioned the issues Germany was having with its budget but also explained how Deutsche Bahn is in such a mess mow. Apparently, Angela Merkel ‘squeezed’ 200 billion Euros out of its rail operator in the pandemic years rather than invest with new money. So DB was used as a cash cow by its government who wanted to follow the fiscal rectitude (or should this be ‘rectum-tude’) of the ECB instead. Angela Merkel – that most lionised and admired recent ‘global’ politician – sacrificed and consumed her country’s rail service rather than make a case for new money to the ECB and left it with aging rolling stock and infrastructure and poorly performing just as we need public transport in the world more than ever. How many times will this happen again I wonder in Euro-land as the unelected ex-city financiers ECB managers dictate where the euro should be invested? And what does it tell us about the standard of politicians running our countries that they are prepared to rob Peter to pay Paul rather than hack out better investment deals from central bankers?
Finally, back to blighty with the result of an overheard conversation between members of the train crew of Northwest train service I was on. Basically this crew who were polite and efficient throughout all of the journey from Holyhead to Crewe were worried about their future roles. The guard was constantly asked by people about connections and other enquiries and yet our government and the scumbags who run the services want to get rid of them. They were in a salty mood and talking about the forthcoming strike action.
Again I got thinking about this. If our politicians are in cahoots with business to cut wages and jobs to make savings in order to ‘generate wealth’ to reinvest in the economy, then can we continue to argue that wealth creation generates jobs? The only thing this de-manning of the railways really does is increase the wealth of a narrow band of the population – the rich owners and directors and managers. The workers are thrown on the scrapheap and become someone else’s problem – apparently the governments – who too are not really interested in them. Oh, and lets not forget – the politicians will be rewarded too – with campaign contributions no doubt. But this false mode of capitalism is now dead isn’t it – trickle down, raising all the boats has now been rumbled for sure.
Added to that is another problem. Without jobs, what are people going to live on? UBC has to be in the picture, but what happens if that choice is to let people have interest bearing credit instead and all the instability that credit brings to the economy?
So, in answer to what we will leave ‘our children’ then?
If you are rich and have assets and income streams you’ll be able to leave those to your children and they will carry on your ‘good work’. The politicians that you financially support will ensure that your and its money only goes into extractive enterprises that generate huge returns. Your taxes will be low as will be ALL your other obligations – except your obligations to yourself and yours.
For the rest of us, we could well be bequeathing the following:
Unsafe, dangerous places to work.
Poor pay and next to negligible working conditions.
A poor commons, under invested in and crumbling, also hazardous to life.
Poor public services that are ineffective forcing people into expensive extractive private provision.
A lack of investment in infrastructure that cannot be exploited or increasing exploitation of roads, rail etc. ,pushing up prices.
Kept in a state of indebtedness.
Kept in a state of constant crisis and unable to take stock and understand what is happening to them, retarding a popular response for something different.
Fascism – always there to exploit their frustration.
Shorter lives spent in fear – a bit like the farm animals I’ve seen.
Environmental degradation unabated.
And all this because the same central bankers and politicians who were so quick to bail out the private bankers who screwed up the financial system in 2008 simply refuse to acknowledge the need for investment in our children using sovereign money for you and your communities and still think even now that only private funds should provide investment because the financial return is the only return that matters and is the only indicator of success. Thus we effectively have the privatisation of state funding. And that continues to be a huge problem unless more of us open our eyes
Thanks.
Wow
So, essay
Thank you
Brilliant post PSR.
Partner has regularly used DB – it is pathetic, cancelled trains a-go-go in the richest country in Europe. I fully agree with one of your last comments ” the privatisation of state funding.” The ECB is to blame & the banker eco-system of which it is a part. There needs to be drastic change in the relationship society-finance – at the moment all are quasi-slaves to a small self-selecting coterie of finance types – a chummy club that does what it wants. I am bringing your essay to various people’s attention since it gets to the heart of the matter – whilst also bring some direct personal experience.
Suggestion to Richard – perhaps these essays could be collected? Given they contain very useful data, make excellent points and stimulate thinking/reflection.
Collected where?
DB is a take of austerity gone mad
And remember Germany has austerity by law – a budget deficit is illegal.
Dear Mike
Honestly, my comment was not conceived as an essay – just a stream of consciousness based on some observations shoe horned conveniently into an inspirational blog post by our generous host. Thanks for your supportive comments all the same.
The big worry though is how politicians like Merkel deal with hard line austerity mongers in central banks.
In my local authority we have a hole in the pension fund. This is because Labour councillors took a pension contribution holiday offered by the same Tory government that was underfunding statutory services. It solved one problem but created another serious one later.
So, who is more stupid – the Tories or the local and national politicians who have to find ways around what can only be described as snakes and ladders policy bullshit?
It all comes down to one thing: over-control – behaviour more fitting of monopolists than those who make out they are ‘pro-market’. I don’t know about anyone else but I’m heartily sick of it all.