Yesterday and this morning, I noted the FT's view that the poorest in our society must suffer an income loss to fund the interest they think is rightfully due to savers during these stressful times for the wealthy.
This morning, The Telegraph notes that Kemi Badeoch thinks the poorest amongst us might do even more to fund this country in its time of need. As they report:
Today, Kemi Badenoch, the Conservative Party leader, will set out how she would raise that £10bn. It's the first time we will hear specifics on how to hit the 3 per cent target of GDP for defence spending by 2030.
It is by slashing the welfare bill, generating £3.1bn by reimposing the two-child benefit cap and saving £1bn by ending VAT exemptions for Motability vehicles, among other policies.
So, now we know. Kemi Badenoch, and no doubt her party, and a great many of its supporters, think that those who must do most to fund this country in its time of need are those who have the least ability to do so.
Children living in poverty must pay.
Those who are utterly dependent upon cars, which are very often adapted to suit their disabilities, must make the sacrifice that this country demands.
And, although we do not know the details yet, I strongly suspect the triple lock will be questioned when it comes to pensions, leaving some of the most vulnerable elderly people in the country even more exposed to economic hardship than they are now.
The logic that underpins this is perverted. I use that word quite deliberately. The proposal being made is sadistic. It is callous. It is intended to create hardship. The gloating, already apparent in the Telegraph's email, hints at the pleasure being derived from making such suggestions.
Let me put this another way. If there is such a thing as evil, and I think there is, then the comments made yesterday by the FT, and those which it appears Kemi Badenoch will make today, represent that in our current politics. We have come to expect both vileness and viciousness from Reform and Restore, but these sentiments come from a political party that once suggested itself as the representative of 'One Nation', and from a newspaper that would like to think itself a pillar of the establishment.
I can safely conclude one thing, and that is that the establishment is rotten.
In 1940, John Maynard Keynes, in his book How to Pay for the War, answered that question in a short book that explained his thinking. His logic went on to underpin the economic policy of the UK when we were fighting fascism, rather than promoting it.
His argument was unambiguous. He made clear that if sacrifice was to be made, it had to be by the wealthy, and it had to be seen to be so, so that everyone would understand the demands that might also be made of them if we were to beat an enemy.
I am aware that we now live in a different era. The threat from fascism is no longer external. It is here, now, amongst us. The defence we need against it must be built on what might, in 1940, have been called the home front. That is the arena to which defence spending should now be most directed.
But, that said, the relevance of Keynes remains. His argument was that if more resources were to be required for defence, those who could give up their excess consumption, and who could afford to do so out of the high levels of income that they enjoyed, were the wealthy. He argued that others should not.
Nothing has changed. If we need defence, it is because the wealthy's well-being is most at risk. After all, we have a country totally oriented to preserving the wealth of those who already have it. And yet the demand being made is that those with least must make required sacrifices to fund defence at a level for which no one can provide justification, against an enemy whose identity is still, in my opinion, unknown, since I no more expect to see Russian troops marching across Europe now than I did at the height of the Red Scare paranoia of the Cold War, which I witnessed when I was growing up.
There is, however, a difference between the 1960s and 1970s and now. Back then, we cared. Now it seems the greatest desire of our political leaders is to abuse those most in need.
Two obvious questions follow. The first is, how far have we sunk? The second is, how much further will we fall? I can answer the first: we are a very long way down. The answer to the second is what frightens me.
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You have outlined many practical problems in political economy, and your proposals to solve them, with which I agree.
You have in this post highlighted a primarily MORAL failure. The issue is not the pragmatic one, “that won’t work”, but a moral one, “that’s WRONG”.
Where we struggle is when we start to discuss morality, or ethics, or principles, or, LORD have mercy on us, religion (declaration of interest, I’m a lifelong follower of Jesus).
Part of my belief framework, is that in living a moral, “good” life, according to my particular beliefs as a Jesus follower, I am required to seek out (and can expect to find) “people of peace” (moral/good people/hearts in the right place people/make the world a better place people) who will have different views from me on many things, but with whom I can, and must work together, for the common good, and with whom I might agree on far more than they realise.
I agree with Richard here – what we see happening in politics today, is EVIL. The tragedy, is that we’ve been here before. With Westminster packed (deliberately) with a mixture of either amoral or immoral individuals, things have got very bad indeed.
The solution involves both a political, economic and MORAL revolution. We have to be willing to say, not only, “that won’t work” to the neoliberals and fascists, but, “that is WRONG – that is EVIL” – because it is true. As for Ms Badenoch, and all the others who use “cultural Christianity” to make their disgusting political schemes respectable, I utterly reject them, no matter how much Christian symbolism they hijack. Jesus reserved some of his harshest words for them.
KUTGW! (esp the GOOD work)
Much to agree with – I share your views on this
The trouble is that the threat from fascism is both internal and external. We know which countries are openly run by dictators and authoritarians. But now some of our so called “allies” are in that bracket. The U.S. Israel. And what happens in the U.S. filters down to the UK.
I agree. Trump regards Putin as a friend and ignores the bombardment of civilian areas of Ukraine. Putin seeks help from Kim Jong Un – one of the worst dictators, while he keeps Lukashenko in power in Belarus. Trump also welcomes Netanyahu and ignores the levels of killing in Gaza. Both Putin and Netanyahu are indicted by the ICC.
Trump supported Jair Bolsonaro. His son Flavio, will stand in the next Brazilian elections. On TRT I saw Netanyahu giving his full support to him.
Bush’s phrase the Axis of Evil comes to mind when we see these links across four continents.
I’d agree with your conclusion, and add that things are a lot worse than in the height of Cold War paranoia because then we had a number of politicians who had been to war and knew far more than the jingoists of today. Heath, Whitelaw, Wilson, Callaghan etc.
We are constantly presented with a funding problem that must be resolved within the envelope of the fiscal rules. And then various parties and pundits chip in as to how to do it. If a suggestion is found to work it simply takes us forward to the next problem.
A small, but suppressed, minority want to talk about the envelope metaphor and the continuing relevance of the orthodox fiscal/monetary approach to the new world that we face.
It seems obvious to many that for Climate Risk/ AI development alone:-
> the risk is unpriceable
> private credit cannot absorb it
> sovereign debt must expand
You would think that the holders of bonds would realise this and would themselves be demanding a solution that is conceptually incoherent rather than calling for the diminution of the sovereign power that their wealth depends on.
Yes – a great post – my view being that we are now living in the era of politics where Atlas has indeed shrugged as Ayn Rand intended.
If something does not make money for you or others, it is seen as extraneous or as a waste. It seems as simple as that to me. Non monetary returns or benefits are simply invisible in world that is obsessed with money – obsessed with it as an output.
It is as if morality itself has become monetized, as well as politics. We need money because that is what a heavily marketised society requires for the market to deliver what we think we need. So money comes first in this self-reinforcing system. Everything else is sacrificed on the altar of financial return, just like ancient civilizations sacrificed innocents to satisfy their Gods in their time. For piles of heads and blood everywhere, today we can see stunted growth in children, hungry people, homelessness and rotting public infrastructure.
We have not come very far really as a species have we? I find it rather pathetic but also supremely disappointing. My desire for disassociation from my species becomes ever urgent.
Thank you
I have been appalled, if somewhat confused, by the reports of rampant crime in Middlesbrough these last two weeks following a fatal head on collision. I’ve found it hard to get any clear information about what is actually going on, and of course the right wing press seems to be inflaming a moral panic to some extent, and placing it all within their own skewed political narrative.
What I think we can’t ignore is that the problems there are very real and not down to a few bad sorts. Something structural has broken to permit this kind of breakdown. I lack any real detailed evidence, but I instinctively think that 15 years of austerity has had some significant impact on what is currently going on. If the tories intend to cut back even more, they should start talking about how they intend to deal with all the likely consequences of their actions, from extreme poverty and suffering to social cohesion and criminality.
You see messages like ‘people shouldn’t have kids if they can’t afford them’. Which ignores that circumstances can change (such as relationships ending, health changing, etc), ignores that larger households have substantially higher proportions in poverty so do genuinely need the help, that the tax system penalises larger households because they’re more likely to have a single income where only a single tax allowance is effectively shared between multiple people, and ignores that we are facing a demographic time bomb because our birth rate is too low already.
It’s callous self-interest dressed up as ‘fiscal responsibility’.
Agreed
And good old Dan is doing his bit:
“DAN HODGES: Burnham’s proud to be a tax and spend socialist – at a time when there’s nothing left to tax or spend”
https://www.dailymail.com/news/article-16100335/Burnhams-proud-tax-spend-DAN-HODGES.html
He is an idiot.
The world knows it.
The neoliberals are running out of money, or so they say. And they do say. They blame the socialists or a particular public policy that makes them feel angry. Net zero, mass immigration, Europe, North sea oil. Take your pick. They never take responsibility for their failures. Until then we will keep falling.
’twas ever thus
https://www.independentlabour.org.uk/wp-content/uploads/2010/07/sacrifice-2.jpg
There are a lot of poor people and not many rich ones.
The question might be better put as what will happen if the poor become so immiserated that they no longer care – while the ‘spark’ was racism just look at whats happened over the last few years.
The Wealthy are very clearly aware that there is a limit to the extent that they can trust their own ‘security’
And Generous Jim (O Neil), well off former banker with lots of investments is banging on about abolishing the triple lock again. As Wedgewood Benn said many years ago in parliament to avoid unparliamentary language resulting in him being told off, he used a phrase to indicate the considered certain people to be bastards because of their attitude. Applies to Jim. He is a very selfish individual.
A suspicious mind would think that a fOI requested found out that the uk government didn’t know what data centres are being used for with 300+ waiting to tear up and eat our resources, are infact tools to control the populace, a suspicious mind would also think that the US disclosure requests regarding UAP reteoenginered tech as David Grush has said exists with the capability to end reliance on fossil fuels, destabilise economy’s and has the ability to fundamentally change the direction of our society in terms of employment and energy. Then add in the abusive stance our government is taking towards the traditional escape goats, disabled poor and asylum seekers. Sprinkle with sentient AI as two have already exisited, do they own the place or do we still is the question. You have a beautiful melting pot just waiting to blow. It begs the question if this new era is born as it is suggested to be soon how would the government react if it no longer had an economy in the current way it operates now. If the mechanisms for abuse were removed what would the government do without there escape goats. Would they or could they govern an empowered population?
This, too.
Pluralistic: Preparing for a post-Trump internet (03 Sep 2026) – Pluralistic: Daily links from Cory Doctorow
I should read Cory more often. This is very good.
Escaping from commercial billionaire-owned sofware is not just a quirk of eccentric privacy geeks. It’s a vital part of the resistance to neoliberalism, and essential to self-preservation. Especially for organisations. For years we have been gradually incentivised to both centralise everything with multinationals, and to rent rather than buy our software – and to “do everything on the app”.
And dont start me on Apple, Facebook, MSOffice, and Whatsapp – so many organisations organise their comms (and cloud storage) via Meta or Microsoft or Google. Like with hard drugs, “Just say NO!”.
Sustainability accounting will easily justify the training required for organisations to move to FOSS – Free Open Source Software, and descend from the “cloud” to something a bit more tangible and secure.
This ought to be a key part of our national defence strategy. But it won’t occur to Mr Healey or Mr Burnham.
I know I should follow your advice…
[…] * * *And part of a follow-on post today, Is there any limit to what the poor might fund?: […]
The Tories are also talking about bringing back conscription. Who in their right mind would be prepared to risk their life and limbs for politicians who clearly do not give a damn about them, and obviously view them as the proverbial cannon fodder. As I understand it, in the run up to and during WW2, a high proportion of conscripts were found to be unfit for service due to years of poverty induced malnutrition and ill health for want of affordable healthcare. History may well soon be rhyming as Mark Twain supposedly said.
In your YouTube video on this subject, you proposed tiering of interest on commercial bank reserves at the B of E and paying interest only on an initial minority tranche. I support the sentiment but I’d suggest that interest should only be paid on the second/later tranche of reserves not the first. This is because if the first tranche receives interest and later reserves don’t, banks have an incentive and opportunity to reduce their non-interest-bearing reserves. While they can’t lend out these reserves directly of course, they can reduce them by lending to customers of other banks (reducing their own reserves and increasing those of the other bank through the settlements process). This creates an incentive to engage in beggar-thy-neighbour lending and to lend at any rate above zero. B of E Governor Andrew Bailey has already used this as an argument against change in a letter to Reform’s Richard Tice (who wrote to Bailey last year proposing the removal of interest on reserves).
But if each bank was required to hold a minimum level of non-interest-bearing reserves based on a percentage of their three-month-rolling-average short-term liabilities, with reserves above these levels continuing to receive interest, this behaviour would be self-defeating because making such loans would (a) reduce the interest-bearing tranche of reserves first, and (b) increase the bank’s short-term liabilities and thus their future reserve requirements. The percentage of short-term liabilities could be set at a level sufficient to ensure that c. 75% of reserves (c. £400bn?) were non-interest-bearing. The Governor set out other objections in his reply to Tice, but all can be rebutted (though not by Tice, who didn’t respond).
Thank you. I think there is a simpler answer to this.
First, there is no necessity to pay interest on central bank reserve accounts. Doing so is a policy choice. The Bank of England could operate a tiered system, including a substantial tranche on which no interest was paid.
Second, the commercial banks did not create these reserves. The Bank of England created them, most notably through QE. The commercial banks therefore did nothing to earn the reserves on which they are now being paid substantial amounts of interest.
Third, and crucially, the commercial banks cannot collectively get rid of those reserves. One bank can transfer reserves to another bank when payments are settled, but that merely moves the reserves around the banking system. It does not destroy them.
Only the Bank of England can remove reserves from the banking system.
So the suggestion that banks have to be paid interest to persuade them to “hold” reserves makes little sense. Collectively, they have no choice but to hold them.
That is why I see no justification for paying Bank Rate on all these balances. The banks did not create the reserves, they cannot destroy them, and paying interest on all of them is not necessary.
I agree with your specific points and I fully support tiering. But the simpler answer won’t work because as far as the government is concerned, tiering has already been considered by the Treasury Select Committee and Chancellor, and rejected as impractical based on advice from the Governor of the Bank of England. Repeating the proposal without addressing the Governors technical arguments therefore won’t have any effect.
One of the Governor’s main arguments against tiering was that it would have a destabilising effect because banks would have an incentive to lend out unremunerated reserves. While we know that banks can’t do this directly or in aggregate, the incentive to lend to other banks’ large corporate customers is real and potentially destabilising. The mechanism I set out addresses this and overcomes one of the Governor’s key objections to tiering. That’s why I see it as a critical point rather than just a technicality – it shows that tiering was not properly considered and is practical.
Politely, stop being boring. Saying ‘because the Treasury says so’ is not an argument when it is very clearly possible elsewhere. We just need to copy Japan. Stop wasting my time.
Thank you, Richard for a terrific response to the FT.
Brilliant piece Richard with very interesting comments from others.The sooner this so called
‘better together’ union breaks up the better.