MILLIONS OF PEOPLE face the future with dread, due to what has been dubbed a cost of living crisis. But what we really face is a social justice crisis.
The amount of excessive wealth held in a few hands has soared during the pandemic. The government could, if it chose, make life more bearable for the growing numbers of people who are now unable to pay their essential bills. But it chooses not to, because that is the ideology and the moral character of this government.
Figures from the DWP in the last few days showed that when the Chancellor increased Universal Credit by £20 a week, it lifted around 400,000 children out of poverty. Just like that, at the stroke of a pen, the Chancellor has the power to improve the mental and physical health, the educational attainment, the life chances, the happiness, of hundreds of thousands of children. Then at another stroke of a pen, he removed that support, tipping those children back into poverty. Imagine having that power over children’s lives, and deciding that those children will just have to suffer.
And of course, that kind of decision doesn’t just affect children, it affects whole communities. In addition to removing the £20 uplift, the Chancellor decided not to uprate benefits in line with inflation, which he said would have cost £25 billion. That is £25 billion not going into the pockets of the poorest people and the poorest communities – a conscious decision to let those households and those communities fall further into poverty and destitution.
Of course, it can be presented as a saving. Withholding that £25 billion might make the Chancellor’s balance sheet look better – but that is all it is, a balance sheet, figures on a screen. In the real world, it is a tragically false economy, the effect of which is unquantifiable. It will incur all sorts of long-term costs in poorer health, rising homelessness, increased crime, sheer misery and deaths.
The excuse always given for this callous disregard for people is that the government has to balance the books, reduce the deficit, etc. But this attitude to government debt is misguided at best. It’s not really clear whether the politicians who promote the view actually believe it themselves. But with the help of the media they have done a very good job of convincing most of the population that government debt is like household debt – when nothing could be further from the truth.
Public debt is very manageable. It is, if you like, good debt. The government can borrow very cheaply, and do good things with the money. At the end of March, UK Government 10 year Gilts had a yield of 1.6 per cent. It can also issue its own money, and it can’t go bankrupt. During the pandemic the Bank of England created the money the government needed – there is no pressing need to pay that back.
And when the government refuses to use its ability to create money or borrow extremely cheaply in order to help its own citizens, it forces millions of them into debts which really are expensive, destructive, and ultimately damaging to the economy.
These debts, in the shape of rent arrears, Council Tax arrears, credit card debt, overdrafts, and even debts to loan sharks, are very much bad debt. They suck the life out of individuals, families and communities, creating a plethora of social problems which drag communities down, making life worse for everyone. And these damaging debts are now set to increase rapidly. This is no way to run an economy or a society.
Even if we accepted for the sake of argument the false notion that ‘there is no such thing as government money, only taxpayers money’, there is still no excuse for the government not to act in the interests of social justice. In the UK we tax income from work more heavily than we tax income from wealth. In 2019, the IPPR said: “Wealthy people who make huge profits by buying and selling assets should pay the same rates of tax as those who work hard for a living…If everyone who makes ‘capital gains’ paid the same tax rate as earnings from work, it could generate at least £90 billion in extra revenue over five years.” And that was in 2019, it would be considerably more in 2022. Imagine what that money could do in the NHS, or in the pockets of people on low incomes?
But that would require a government with a completely different vision to the one we have. The government we have is hellbent on running down or selling off public services, and leaving millions to the mercy of loan sharks and bailiffs. And it’s not through incompetence, which would be bad enough. It’s a conscious, deliberate choice. Just as the Spring Statement helped the rich more than the poor, so the Chancellor intends to do even more for them in the future. As he said in his statement: “From this point forward my priority is to keep cutting taxes, not to increase public spending”.
It has never been more apparent that poverty is a political choice. And all the dreadful human consequences that follow on from that are the product of a conscious political choice by this government.
© Bernadette Meaden has written about political, religious and social issues for some years, and is strongly influenced by Christian Socialism, liberation theology and the Catholic Worker movement. She is an Ekklesia associate and regular contributor. Her latest book is Illness, Disability and Caring: A Bible study for individuals and groups (DLT, 2020). Her latest articles can be found here. Past columns (up to 2020) are archived here. You can follow Bernadette on Twitter: @BernaMeaden