When the government speaks of ‘recovery’ (which may well turn out to be a bubble largely supported by consumer spending, inflated house prices and private credit), it is worth asking, ‘what is being recovered by whom?’
When the government speaks of ‘recovery’ (which may well turn out to be a bubble largely supported by consumer spending, inflated house prices and private credit), it is worth asking, ‘what is being recovered by whom?’
In the wake of the UK government’s Autumn Statement (5 December 2013), the ever-stimulating Scriptonite Daily (www.scriptonitedaily.com/) blog offered a good summary response to that question, looking at the contrasts between ‘life at the top’ and ‘life at the bottom’, mediated by tax benefits for the wealthy and social spending cuts for the most vulnerable.
What lies at the heart of current economic policies is an attempt to persuade ordinary people that it is ‘common sense’ for them to have to pay for a crisis significantly created by unaccountable, speculative wealth; that the problem is public sector debt (in fact it is unleveraged private and financial sector debt which is the real problem, and sensible public spending which can help reduce the debt); that austerity is required for all but the wealthy, and that the deficit and the debt are essentially same problem (they are not, and the former may need to rise in order to reduce the latter).
The cost of these sleights of hand is borne by those with least. Here, with a couple of editorial modifications and additions from me [in parentheses], is the picture Scriptonite Daily paints concerning who is winning and who is losing.
The question at the heart of economic and political democracy, of course, is ‘who decides?’ This is where a fundamental shift is approach, towards Common Weal (http://allofusfirst.com) is needed.
Life at the top:
* Corporation Tax is lower today than at any time in its history. Company taxes now constitute only 12.5 per cent (Corporation Tax is just seven per cent) of the tax revenues of the UK. In comparison, the people’s taxes (income tax and VAT), make up more than 60 per cent of tax income.
* UK Corporation Tax in 1984 was 52 per cent. By 1986 it was 36 per cent. In 1999 it dropped to 30 per cent. Under the Coalition, Corporation Tax has been cut from 28 per cent to 20 per cent.
* The Top Rate of Tax has been cut by five per cent – meaning that someone earning £1 million a year will be saving £107,500 a year.
*Yet in spite of this largesse from government, tax avoidance is costing us almost £70 billion each year. [The Chancellor’s target is to cut this by only £9 billion over five years, and he is ignoring the General Anti Tax-Avoidance Principle Bill]
* Only one in four of the UK’s top companies pay their taxes; meanwhile they receive tax credits to the tune of hundreds of millions of pounds by people who did pay their taxes.
The assault on the welfare state:
* The Health and Social Care Act has effectively privatised half of the National Health Service, while new competition regulations going live in April 2014 open the service up to the highest bidders to take over.
* The Academy and Free Schools programmes turns publicly accessible schools into profit making companies, and Private Finance Initiative (PFI) debt is transferring ownership of schools from the state sector to banks.
* The profit-making public asset of the Royal Mail was sold off for less than half its value, gifting a working service and vast profits to wealthy investors while defrauding the taxpayer.
* Public sector workers (nurses, street cleaners, teachers, scientists) have had their pay restricted to a one per cent rise each year. With inflation at almost three per cent this amounts to a real terms wage cut of per cent for the last three years.
* The cut in Council Tax Benefit (which supports the same groups) rolled out in April 2013 will mean a rise of up to 333 per cent in council tax bills [in England – they are frozen in Scotland, but the burden of that on public finance will increase.]
* Workfare has been imposed. This has ended the tradition of a contribution-based social security system. Workfare means that despite a person’s contributions, s/he is forced to work full-time, for months at a time, for corporations (many of whom pay little or no tax) in order to receive the social security payment s/he is already entitled to. If s/he refuses, the benefit is withdrawn.
* The cumulative impact of the Bedroom Tax, the Benefits Cap and cuts to disability benefit means some 600,000 disabled people losing as much as £131 a week.
* Over 90 per cent of all care home provision (up from 61 per cent in 1990) to elderly people is in the independent/private sector after the public sector was encouraged to outsource provision in an effort to cut costs. The same period has seen an astronomical rise is the cost of care home places.
Life at the bottom:
* The cost of living is rising at four times the rate of wages. In fact, UK wages are falling faster than any other ‘developed’ country.
* Thirty-four disabled people have killed themselves, and 32 have died every week while undergoing stressful ATOS ‘work capability assessments’ over the last three years. Hate crimes against disabled people shot up 25 per cent in 2012.
* The number of people reliant on Food Banks tripled in the last year, with 350,000 people unable to feed themselves without charity support. This winter, the Red Cross will be launching its first emergency food aid programme on UK soil since the Second World War.
* Statutory Homelessness rose by 21 per cent in England and 17 per cent in Wales in 2012. While Rough Sleeping has risen even faster, at 31 per cent in England. Outreach workers from Homeless Charity Crisis performed a count in London which found a 62 per cent rise in rough sleepers in the capital in just the last two years.
* The average cost of a single room in a care home has risen to over £27,000 a year. This is higher than the average UK annual wage (£26,000) and more than double the average annual pension income of £13,208. In fact since 2011, care home costs have risen at twice the rate of inflation. Yet last year, the regulatory body for the UKs care homes The Care Quality Commission (CQC) published a damning report that showed that more than half of all elderly and people with disabilities in care homes were being denied basic care.
* One in six British pensioners now live in poverty, and 24,000 will die this winter because they cannot afford to heat their homes.
The tripartite question, “who wins, who loses, who decides?” goes back to erstwhile URC minister, hymnodist and social activist Brian Wren in his 1970s book Education for Justice (SCM Press), by the way.
—
* Read the full Scriptonite analysis, with sources, here: http://www.scriptonitedaily.com/2013/12/05/osborne-announces-cuts-that-take-the-uk-economy-back-to-1948/ Excerpts reproduced with acknowledgement and thanks.
* More from Ekklesia on the Autumn Statement 2013: http://www.ekklesia.co.uk/autumnstatement
* Common Weal, December 2013: http://allofusfirst.com
* ‘Common Wealth: Christians for economic and social justice’ statement, 2010: http://www.ekklesia.co.uk/CommonWealthStatement
————-
© Simon Barrow is co-director of Ekklesia. Follow him on social media at Twitter @simonbarrow and Rebel Mouse www.rebelmouse.com/simonbarrow