Originally published February 2013.
Under the cover of their austerity program, the Government are hacking back at the protection given to the most vulnerable and disadvantaged in society - from the disabled and the unqualified to the plain and simple dim and unemployable. It is both necessary and electorally popular that the Government reduce the current benefits bill and balance this with tax rises, in order to bring down the structural deficit in current spending, however judging by the pronouncements by some ministers and their more obnoxious backbenchers it seems they still believe that the poor bring it upon themselves and that the cuts are a just punishment for the feckless and the workshy. We all remember those people we went to school with who had no interest in their own education, who disrupted lessons, who bullied, started fights, smoked behind the bikesheds, bunked-off, got in trouble with the police, etc and it is tempting when we see that they end up in poorly-paid jobs or unemployed to say 'tough - it's your own fault'. But the reality is that it is rarely entirely their own fault. Sure, given two people in identically poor circumstances one may manage to make it out and make something of their life and the other may remain trapped in a cycle of generational deprivation, but the odd success story here or their doesn't justify writing off the rest - it's illogical and defies statistical analysis - it's plain daft to think that everyone can follow the same path out of poverty. The Tories and their electoral appeal however feeds on and re-enforces this popular perception. It appeals to the basest, most unpleasant aspects present in everyone's personality to a greater or lesser degree; it asks us to give in to hate, give in to divide-and-rule, give in to vilification and finger-pointing. The reality is most people on benefits or in low-paid employment had parents in similar circumstances; if your parents don't value education or don't hammer home it's importance to you then in today's ultra-competitive jobs market what chance do you really stand of breaking the cycle? How does blaming the individuals help solve the problem long term? And the Government's assault on those claiming disability benefit is even more wrong-headed; how can we blame those with disabilities for their own circumstances? I suspect it is driven by the popularly held Tory-media-inspired idea that in reality they are in the main fraudulently 'on the sick' with there being only a minority of genuine claimants.
I don't want society to be riven by such envy and such jealousy - the relatively well-off being so envious of the meagre benefits bestowed upon the poor. So, there is going to be a choice ahead of us - either choose the Tory route of driving down benefits below subsistence levels to minimise the cost to the state so the 'problem' can be contained. And then turn a blind eye to the outcomes and continue to say it is their own fault. I don't think choosing that option makes us a better society - only more individualistic, less caring, shallower and uglier. Alternatively we try, for the greater good, to break the cycle of social exclusion by investing massively in early years education and continuing through primary and junior to secondary schools to counteract the negative impact of pupils' own circumstances and the malign influence of the worst parents. Sure-Start was one of Labour's greatest success stories but has been systematically dismantled, as was Building Schools for the Future, by a short-sighted government that has chosen the path of least resistance - that of slash and burn.
How to pay for the required investment in education though? There are two aspects to this - firstly I would like to see Labour commit themselves to a national (regionally adjusted) living wage. This would remove the massive taxpayer subsidy to poor employers - currently the Government is spending billions on in-work benefits simply because employers can get away with paying inadequate wages. This is insane - you and I are contributing directly to the bottom line of exploitative employers and it has to be stopped. The cost in additional unemployment is estimated at 160,000 jobs, which given the reduction in the benefits bill is perfectly manageable.
Secondly I would like Labour to commit to a serious annual wealth tax and a reduction/elimination of inheritance tax. It is simply unacceptable that the richest people in this country currently pay marginal rates of tax as low as 10%. Madness. They are able to do this, and it is perfectly legal, as they are able to minimise their income and capital gains for tax purposes, whereas a tax on wealth (assets) is far harder to avoid - for example property cannot be shifted to a lower tax regime. An argument that was deployed by Tory commentators against Vince Cable's proposal for a mansion tax, a watered-down version of a wealth tax, was that it would be unfair to impose a property tax on the asset-rich and cash-poor such as retirees, who have worked hard all their life to own their own home and don't have the income to pay the tax liability that would result; apparently it wouldn't be fair to ask them to pay the tax bill. When I heard Kirsty Allsopp, the daughter of former Christie's chairman Charles Henry Allsopp, 6th Baron Hindlip make this argument, I almost threw the radio into the garden. Compare and contrast to the bedroom tax! It made me laugh this morning when I saw Jeremy Hunt announce that people's houses would be protected from having to fund their care in old age 'the home you have lived in all your life'; what a contrast to the bedroom tax where he expects people to up-sticks and move out as soon as they have a spare room, which the Government sees as an over-indulgent luxury. Let's offer pensioners some of the same solutions offered to housing benefit claimants - rent the spare room out, downsize, etc. Sounds heartless? Whats the difference? Besides, there are plenty of other options available to release capital tied up in their home without moving out, and your average run-of-the-mill retiree is not the primary target of a wealth tax anyway - the target is the multi-millionaires and multi-billionaires paying accountants to sweat the figures to get the income tax bill down as far as is legal.
And before anyone shouts that this would hit the 'wealth creators' please take a look at how well trickle-down has worked in the USA - the 400 wealthiest people in the States now have assets worth more than the combined assets of the bottom 50% of the population. Low taxes on the wealth creators, combined with trickle-down is an abject and total failure it has merely resulted in a huge transfer of wealth from the poor to the rich. A rising tide apparently does not lift all boats. This is not acceptable for Britain; we can do better than that. If we are serious about breaking the pattern of social exclusion and social immobility we need to get serious about wealth taxes and the living wage.
Under the cover of their austerity program, the Government are hacking back at the protection given to the most vulnerable and disadvantaged in society - from the disabled and the unqualified to the plain and simple dim and unemployable. It is both necessary and electorally popular that the Government reduce the current benefits bill and balance this with tax rises, in order to bring down the structural deficit in current spending, however judging by the pronouncements by some ministers and their more obnoxious backbenchers it seems they still believe that the poor bring it upon themselves and that the cuts are a just punishment for the feckless and the workshy. We all remember those people we went to school with who had no interest in their own education, who disrupted lessons, who bullied, started fights, smoked behind the bikesheds, bunked-off, got in trouble with the police, etc and it is tempting when we see that they end up in poorly-paid jobs or unemployed to say 'tough - it's your own fault'. But the reality is that it is rarely entirely their own fault. Sure, given two people in identically poor circumstances one may manage to make it out and make something of their life and the other may remain trapped in a cycle of generational deprivation, but the odd success story here or their doesn't justify writing off the rest - it's illogical and defies statistical analysis - it's plain daft to think that everyone can follow the same path out of poverty. The Tories and their electoral appeal however feeds on and re-enforces this popular perception. It appeals to the basest, most unpleasant aspects present in everyone's personality to a greater or lesser degree; it asks us to give in to hate, give in to divide-and-rule, give in to vilification and finger-pointing. The reality is most people on benefits or in low-paid employment had parents in similar circumstances; if your parents don't value education or don't hammer home it's importance to you then in today's ultra-competitive jobs market what chance do you really stand of breaking the cycle? How does blaming the individuals help solve the problem long term? And the Government's assault on those claiming disability benefit is even more wrong-headed; how can we blame those with disabilities for their own circumstances? I suspect it is driven by the popularly held Tory-media-inspired idea that in reality they are in the main fraudulently 'on the sick' with there being only a minority of genuine claimants.
I don't want society to be riven by such envy and such jealousy - the relatively well-off being so envious of the meagre benefits bestowed upon the poor. So, there is going to be a choice ahead of us - either choose the Tory route of driving down benefits below subsistence levels to minimise the cost to the state so the 'problem' can be contained. And then turn a blind eye to the outcomes and continue to say it is their own fault. I don't think choosing that option makes us a better society - only more individualistic, less caring, shallower and uglier. Alternatively we try, for the greater good, to break the cycle of social exclusion by investing massively in early years education and continuing through primary and junior to secondary schools to counteract the negative impact of pupils' own circumstances and the malign influence of the worst parents. Sure-Start was one of Labour's greatest success stories but has been systematically dismantled, as was Building Schools for the Future, by a short-sighted government that has chosen the path of least resistance - that of slash and burn.
How to pay for the required investment in education though? There are two aspects to this - firstly I would like to see Labour commit themselves to a national (regionally adjusted) living wage. This would remove the massive taxpayer subsidy to poor employers - currently the Government is spending billions on in-work benefits simply because employers can get away with paying inadequate wages. This is insane - you and I are contributing directly to the bottom line of exploitative employers and it has to be stopped. The cost in additional unemployment is estimated at 160,000 jobs, which given the reduction in the benefits bill is perfectly manageable.
Secondly I would like Labour to commit to a serious annual wealth tax and a reduction/elimination of inheritance tax. It is simply unacceptable that the richest people in this country currently pay marginal rates of tax as low as 10%. Madness. They are able to do this, and it is perfectly legal, as they are able to minimise their income and capital gains for tax purposes, whereas a tax on wealth (assets) is far harder to avoid - for example property cannot be shifted to a lower tax regime. An argument that was deployed by Tory commentators against Vince Cable's proposal for a mansion tax, a watered-down version of a wealth tax, was that it would be unfair to impose a property tax on the asset-rich and cash-poor such as retirees, who have worked hard all their life to own their own home and don't have the income to pay the tax liability that would result; apparently it wouldn't be fair to ask them to pay the tax bill. When I heard Kirsty Allsopp, the daughter of former Christie's chairman Charles Henry Allsopp, 6th Baron Hindlip make this argument, I almost threw the radio into the garden. Compare and contrast to the bedroom tax! It made me laugh this morning when I saw Jeremy Hunt announce that people's houses would be protected from having to fund their care in old age 'the home you have lived in all your life'; what a contrast to the bedroom tax where he expects people to up-sticks and move out as soon as they have a spare room, which the Government sees as an over-indulgent luxury. Let's offer pensioners some of the same solutions offered to housing benefit claimants - rent the spare room out, downsize, etc. Sounds heartless? Whats the difference? Besides, there are plenty of other options available to release capital tied up in their home without moving out, and your average run-of-the-mill retiree is not the primary target of a wealth tax anyway - the target is the multi-millionaires and multi-billionaires paying accountants to sweat the figures to get the income tax bill down as far as is legal.
And before anyone shouts that this would hit the 'wealth creators' please take a look at how well trickle-down has worked in the USA - the 400 wealthiest people in the States now have assets worth more than the combined assets of the bottom 50% of the population. Low taxes on the wealth creators, combined with trickle-down is an abject and total failure it has merely resulted in a huge transfer of wealth from the poor to the rich. A rising tide apparently does not lift all boats. This is not acceptable for Britain; we can do better than that. If we are serious about breaking the pattern of social exclusion and social immobility we need to get serious about wealth taxes and the living wage.
I agree that education is the key to solving many if not all of society's problems but it's a massive mountain to climb - to break the cycle of under-valuing education will probably take 3 generations whereas governments generally only look as far ahead as the next general election
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