Sunday, 6 March 2011

March 26th Rally TUC - What We Are For- Monbiot


What We Are For

The movements opposing the British government need a set of aims: here’s my attempt at a first draft.

By George Monbiot. Published in the Guardian 6th March 2011

Yet again we are stepping into the ring with one hand tied behind our backs. The great rally planned for March 26 will bring together the most impressive oppositional groups in Britain(1). It will show that we have the numbers and the will required to fight this government. But there’s a problem. We know what we don’t want. The people coordinating this protest have provided compelling explanations of why the government’s programme for tackling the deficit is unnecessary, unfair and likely to make the problem worse(2). We’ve been less clear about what we want.

Nowhere have I been able to find a statement of aims that is short enough to put on a flier but specific enough to be useful. There are plenty of 30-page documents and plenty of pithy slogans, but, as far as I can discover, nothing in between. What we’re missing is a simple set of proposals agreed by the main groups which would turn this from an oppositional to a propositional movement. The lesson to be drawn from previous battles is that lasting change doesn’t happen until we unite behind what we want, not just against what we do not.

Without clear aims, we remain trapped by our opponents, responding to their agenda, rather than forcing them to respond to ours. Without a programme for action, campaigns dissipate as people lose hope. A statement of aims allows us to tell whether or not we are making progress, rather than merely slipping back less rapidly than before. It can also be used to challenge opposition parties and measure their commitment.

This is a rough first draft of what such a statement might look like. There is nothing definitive about it: its purpose is to open the discussion, not to close it. Interrogate, improve, extract or maul it as you please. But don’t reject it out of hand unless you have something better to put in its place. Few of these proposals are new. Most I’ve harvested from longer documents written by trade unions, think tanks, academics and NGOs, some of which are involved in the march.

So here goes. We need to redress the balance between cuts and tax rises (currently 3:1)(3), as fairly as possible. That means starting with the UK’s most regressive form of taxation: national insurance. This levy is so unfair that it’s hard to understand why it hasn’t received more attention. On earnings of up to £844 a week, you currently pay 11% national insurance. On earnings beyond that point, you pay 1%(4). We should raise the national insurance rate for higher earnings from 1% to 15%(5). This would help to address a wider injustice: the poorest 10% of UK households pay proportionately more tax (direct and indirect) than the richest 10%(6).

We must close the tax gap. Tax avoidance and evasion are the preserve of the very rich: only millionaires and corporations can afford the specialist advice required to disguise their earnings. The tax gap amounts to between £40bn and £120bn a year(7,8). Not all this money can be reclaimed. We need a national target to claw back £25bn a year. Staffing levels at HM Revenue and Customs should be raised accordingly.

Of the various means of reclaiming money from the banks, a financial transactions tax (the Robin Hood tax) is the fairest and most sustainable. It’s easy to collect, hard to avoid and highly progressive, as it falls largely upon the richest people in the country(9). A tax of 0.005% on financial transactions could raise a net £13bn a year; a tax of 0.01%, £25bn(10).

The government should adopt the plan proposed by the Green Fiscal Commission: by 2020 levies on damage to the environment should amount to 20% of the total tax-take(11), with a commensurate reduction in the income tax and national insurance paid by people with low earnings. The tax exemption for private schools must end. This costs us £100m a year – to grant unfair advantages to the children of the rich(12).

Greg Philo of Glasgow University has proposed an interesting means of mobilising the money the very rich have stashed away: transferring the entire national debt to them. He’s shown that this could be done through a one-off tax averaging 20% on total assets worth more than £1m(13). It would be graduated, so that the richest people are charged at a higher rate than mere seven-figure millionaires. It wouldn’t have to be paid immediately: the asset-holders could choose to pay only the interest on the debt until they died, whereupon the capital would go to the state. This ensures, as the government has promised, that “the broadest shoulders should carry the greatest burden.”(14)

The government should set a target of 0.5% per year for reducing the Gini coefficient – the measure of income inequality – in the United Kingdom(15). To this end it should raise the minimum wage by inflation plus 5% each year until it reaches the level identified by the Living Wage campaign(16). We also need an official High Pay Commission, whose purpose is to identify, as a multiple of the living wage, the maximum remuneration anyone in the UK should receive(17).

The following new military hardware programmes should be scrapped: the Trident weapons system; aircraft carriers; Eurofighter jets. The Barrow shipyard, where new nuclear submarines were to be built, should be redeployed to produce offshore renewables: wind, wave and tide turbines(18). The money saved should be spent on a new public housing programme.

To fill looming gaps in provision and reduce unemployment, the government should raise the public workforce by the following levels: 10,000 more social workers; 10,000 more planners; 50,000 more hospital cleaners; 100,000 more educational staff; 350,000 extra care workers for the elderly(19). As Unison points out, 92% of the cost of employing a public service worker is recouped by the state, because it raises tax revenues while reducing benefit payments(20).

These measures will help to address the immediate problems of the deficit, the debt, unemployment, inequality and a threatened double-dip recession. But we also need to move to a system which doesn’t depend on endless economic growth to sustain high employment and a decent standard of living. We need a Steady State Commission, to develop a government programme for turning a growth-based, boom and bust economy into a stable system, without damaging the prospects of the poor(21).

I can’t speak for anyone else, though I’ve borrowed plenty of ideas in compiling this list. The point is to encourage the brave and brilliant groups organising the protests to produce their own brief but specific statement of aims. We know what you’re against. Now tell us what you’re for.

www.monbiot.com

References:

1. http://marchforthealternative.org.uk/

2. There are some good summaries of the problem here: http://falseeconomy.org.uk/cure

3. Compass reports that “by 2015/16, 77% of the total consolidation will be delivered through spending reductions and 23% through tax increases.” George Irvin, Howard Reed and Zoe Gannon, September 2010. The £100 Billion Gamble on growth without the state. Compass. http://clients.squareeye.com/uploads/compass/documents/Compass%20cuts%20WEB.pdf

4. HMRC, viewed 6th March 2011. National Insurance Contributions. http://www.hmrc.gov.uk/rates/nic.htm

5. There’s a proposal by Compass to charge NI at 11% thoughout. This, it says, “would turn NICs into a flat tax, making it ‘merely regressive’ rather than ‘├╝ber regresssive’.” (George Irvin, Howard Reed and Zoe Gannon, 3 above). But I don’t see why we can’t go further than this.

6. George Irvin et al, November 2009. In Place Of Cuts: Tax reform to build a fairer society.
Compass.

http://clients.squareeye.com/uploads/compass/documents/Compass%20in%20place%20of%20cuts%20WEB.pdf

7. The low estimate (£42bn to be precise) comes from HMRC, 16th September 2010. Measuring Tax Gaps 2010. Table 1.1, Page 7. http://www.hmrc.gov.uk/stats/measuring-tax-gaps-2010.htm.pdf

8. The high estimate comes from Richard Murphy, March 2010. Tax Justice and Jobs: The business case for investing in staff at HM Revenue & Customs. http://www.pcs.org.uk/taxjusticedoc

9. This is explained in detail by Tony Dolphin, June 2010. Financial Sector Taxes. Institute for Public Policy Research. http://www.ippr.org/publicationsandreports/publication.asp?id=756

10. Tony Dolphin, as above.

11. Green Fiscal Commission, October 2009. The Case for Green Fiscal Reform: final report. http://www.greenfiscalcommission.org.uk/images/uploads/GFC_FinalReport.pdf

12. Polly Curtis and David Brindle, 16th January 2008. Do more for poorer children or lose your charitable status, private schools are told. The Guardian. http://www.guardian.co.uk/society/2008/jan/16/voluntarysector.schools

13. Greg Philo, 15th August 2010. Deficit crisis: let’s really be in it together. The Guardian. http://www.guardian.co.uk/commentisfree/2010/aug/15/deficit-crisis-tax-the-rich

14. eg http://www.telegraph.co.uk/finance/personalfinance/consumertips/tax/8292330/1.6m-to-pay-higher-rate-of-tax-for-first-time.html

15. While the measure stabilised during the later years of the last government, since 1983 it has risen from just over 28% to 34%. See Office for National Statistics, 10th June 2010. Income inequality remains stable.

http://www.statistics.gov.uk/cci/nugget.asp?id=332

16. See http://www.citizensuk.org/campaigns/living-wage-campaign/

17. There’s an unofficial High Pay Commission, established by Compass: http://highpaycommission.co.uk/. The aim I’ve proposed here goes beyond that group’s objectives.

18. Kate Hudson, no date given. Scrap Trident and invest to create 100,000s new jobs. In:

http://falseeconomy.org.uk/files/challenging-cuts-pamphlet.pdf

19. Unison, July 2010. Alternative budget: We can afford a fairer society. http://www.unison.org.uk/acrobat/18887.pdf

20. Unison, as above.

21. The basis for a programme like this has been laid out by Tim Jackson, March 2009. Prosperity without Growth? The transition to a sustainable economy. Sustainable Development Commission. http://www.sd-commission.org.uk/publications/downloads/prosperity_without_growth_report.pdf