We are currently in a position where we have a government who are systematically removing support from the poor whilst increasing support for the rich. Our Prime minister, with an estimated wealth of £30,000,000, wants you to believe that the poorest people in this country are lazy, greedy and living a life of luxury, paid for by the tax payer. David Cameron, who used £13000 of tax payer’s money on a wine tasting tour; David Cameron, who was too cheap to pay for a 7p bulldog clip which then cost the tax payer 35p once the expense was processed; David Cameron, who used £21000 of tax payer’s money per year to pay his mortgage, despite his vast personal wealth, wants you to believe that those in the bottom 10% (who amongst them all only own the equivalent to one man, Major General Gerald Grosvenor, and his family) are greedy and luxuriant (The bottom 20% of the whole population, 12.6 million people, have the equivalent wealth of just five families). Such is the force of Cameron’s invective, the electorate have given him a small majority with which to enact this assault on the poor.
The justification for this “war on welfare” is the “desperate need” to “balance our books” and “cut the deficit”, yet Cameron, Osborne and their cronies will know full well that with a sovereign currency this is not necessary at all, especially in one of the largest economies of the world, who can borrow at their leisure at extremely low interest rates. Debt is used as a means to control inflation. We could pay off the deficit right now by simply creating more money, we don’t because we don’t want to risk the level of hyperinflation of Weimar Germany in the 1920s, but that is not to say that there is an urgent need to balance the books. We are not saving future generations from a debt mountain. Our debt is intrinsically tied to the economy in the present, and not the economy of the future. World War Two saw the nation plunged into considerable debt, whilst the 1950s and 1960s enjoyed relative prosperity. In order to understand this, one need look no further than the “economic miracle” of post-war Germany. When it comes to a nation’s debts it is simply not the case that the sins of the father will fall upon the son. They want you to believe that we could be the next Greece, but this is an impossibility. We cannot be the next Greece for the simple fact that the pound is our own currency, the supply of which is controlled internally in the country.
Both right and left wing governments borrow money- right wing governments tend more towards borrowing to pay off debts, whilst left wing governments borrow to invest- though parties across the political spectrum will do both to varying degrees. Neither is economically worse than the other, though the latter is more likely to improve the living conditions of the poorest members of society in the process. There is nothing inherently profligate in increasing a nation’s assets and future growth potential. But most importantly, it has been shown time and again that ““The boom, not the slump, is the right time for austerity.” (J.M. Keynes). Borrowing to invest has far more justification right now. Austerity in times of recession simply deepens recessions. Now, is entirely the wrong time to cut, cut, cut. There is a much stronger case for austerity and “balancing the books” once the economy is once again running at full tilt, but to do so now as if the deficit is a bomb that’s about to explode is a complete nonsense.
So why are the Conservatives pressing on with their austerity agenda? Why are so many people being made to suffer because of welfare cuts? Why have disabled people lost vast amounts of support? Why have numerous terminally ill people spent their last months fighting for the pittance they need to feed and house themselves? Why have disabled people died after being sanctioned? Why are hundreds of thousands of children being plunged into poverty? The answer is simple, and the only relationship that it bears to the economic crash is that it is a handy excuse: Conservatives believe in a small state. They do not believe in welfare and many believe that poverty is desirable in a capitalist system. The global economic crisis was a handy excuse to convince those who believe global economics is akin to balancing a current account, that Labour overspent, that welfare risks plunging a nation into bankruptcy, and that reducing inequality creates laziness. The only people austerity actually helps are the rich, to whom the Conservatives are bestowing a greater share of the wealth in their reforms which have consistently favoured those with the greatest wealth. The Conservatives want an economy which sees some struggling to live on the money for a year that his peers spend on a weekend away.
The Gini coefficient is a scale which measures the level of inequality in a country. 0 indicates complete equality, 1 indicates that all the wealth is in the hands of a single person. The UK sits at about 33%, whilst Sweden is at 25%, signifying that the latter is by far a more equal society. Since the late 1970s, years of Conservative, and neo-liberal Labour, control have seen inequality sharply rise in the UK.
Countries, such as Sweden, have better welfare provision and less income and health inequality than the UK and coincidentally they suffered far less in the crash despite the larger size of their state; largely because they are less dependent on the financial sector than we are here. Reduction in inequality can be proven, via negative cost calculations, to save a nation money. Estimates for the cost of inequality are calculated in the billions, policies which further entrench poverty cannot simply be measured in terms of the human cost, but also in expenditure. “Researchers pointed to the fact that the 100 wealthiest people in the UK have as much money as the poorest 18 million – 30% of all people – and said that the consequences of such unusually high rates of inequality needed to be acknowledged by politicians.” Source. It is perhaps instructive to compare the cost of inequality, at £39bn pa, with the £12bn of cuts to the welfare state in the latest budget, which will actually increase inequality.
In the last government, in a coalition cabinet , 23 out of 29 ministers were millionaires, despite only 1.5% of the general population being so. It would be too big a leap of the imagination to suggest it was a coincidence that their policies favoured the rich. Conservatives like to present egalitarianism as “the politics of envy”. They seemingly think that poor people wanting equality constitutes moral deficiency, yet they have happily used these same mechanisms to convince others that their wellbeing is at risk if poor people are properly supported. They like to tell us that benefit claimants are shirkers and scroungers, despite a huge number of them simply being low paid workers, single parents and disabled people. They want you to be jealous of the people they’re telling you get a lot of something for nothing. They want you to resent the welfare state because they want you to be jealous of its beneficiaries. Those in authority, who the hidden curriculum teaches us to trust from the moment we enter the education system, tell you that you are the enemies of each other because they don’t want you to look at them, our true enemies.
This is ac all to arms, we do deserve better, and we can have better, if we tell our masters, for once and for all, that we won’t tolerate it anymore. Our state can be both more egalitarian and prosperous. Sweden is proof of that. We need to start believing that it’s not an impossibility and we need to demand it now. We only believe it is an airy fairy pipe dream, because the very rich, who would lose out in a more equal society, spend a lot of time telling us so. We need to shrug off our complacency and stop believing the lies we are told, before more people suffer for the sake of the economics of fiction.
Awful but sadly that happens when people don’t vote! Great post x
Rob Davis said:
It’s very wrong of any government to fail to lead by example but there are very few occasions when our leaders Tory or Labour have not seemed oblivious to the plight of those, who are decent people some hardworking,some unable to be,who are stuck at the bottom of the economic pile. I think that dogma gets in the way of common sense with politicians and the worse decisions are made by those most remote from the bottom rung of everyday life especially millionaires! Gordon Brown was someone, a son of the Manse,who was trying to lift those in poverty and succeeded to some extent but I doubt he intended tax credits to subsidise or encourage some employers to be paying lower wages, whereas it was intended to help the poor and Alistair Darling confirmed that point,just last week.
Reblogged this on Britain Isn't Eating.
I make this point on my own blog. People complain that benefits were rising whilst wages were not. What is wrong with that statement is apparent: wages should have risen with inflation, and If minimum wage had increased with inflation it would be worth far more by now. In fact I read somewhere that if minimum wage had risen at the same rate as average wages from it’s implementation, then it would actually be worth £18 per hour by now.
But the main point that I make is that the rich wouldn’t have become poorer if minimum wage had risen like that; quite the opposite. As we know, poorer people spend their incomes in the local economies, so if they have twice the spending power, they’re going to consume more, which means businesses will grow, take on more employees, which would reduce the unemployed numbers. And those at the bottom can then afford to save more, which helps the banks.
The rich would still be rich. Small businesses may have found it hard, but they’re the ones that could attract government subsidies to continue. Being that tax receipts would be up, and tax credits claims would be few, the government could afford this.
Being that this is not the case, then the only reason wages haven’t risen – as we all well know – is purely on an ideological basis. Similarly, we all know that there are never going to be enough jobs for everyone, and the government know this, so why are unemployed hounded and treated like slaves? Again, it must be purely ideological. You can’t be on the side of ‘hard working families’ and then go onto slash their government support: why would a government do this? All ideology as your article points out. They must despise and hate us that much, enough to destroy lives, even take lives.
All the marches and protests, all of the committee meetings in government, all the ‘inquiries’, do nothing to change this. Nothing but a reaction similar to the poll tax protests will do, except that sort of activity is all sown up now. Technology will work against those who dare step out of line. Already so many people are even banned from marching when they’ve done nothing wrong, so if you try to stand up against it, you’ll find that you’ll soon become targeted.
I don’t know what the answer is, but at the very least we have to keep speaking out while we still can, and that time-frame may be very short indeed.
Interesting article. There is quite a bit of evidence that reducing the top rate of tax (I reckon around 35% is the top revenue for the UK) brings in more tax, which potentially makes people on benefits better off. I reckon the monopoly of money possibly has something to do with monopolies.
By the way, do you thing you can actually reduce benefits while making most people on benefits better off by fixing overdraft facilities?
Lets not beat about the bush, it was when they began really harassing people on jobseekers that they forced everyone onto the sick. Before that, some people would not look for a job for a while, then get a job. Thats observation.
I guess the benefits bill would be reduced if they stopped viciously harassing people on jobseekers and auto shift the not exactly crippled onto jobseekers.