Category Archives: Austerity

The Paradise Papers and Tax Avoidance

People will by now have grown well-used to revelations about Tax Avoidance by large corporations and the wealthy elite. However this week’s BBC Panorama programs on the so-called Paradise Papers (available to watch here and here), about the widespread use of offshore Tax Havens, will have shocked many by the sheer scale of the avoidance that is going on – and not just by the usual suspects of large corporates like Apple, or corrupt individuals like ex-Tory Treasurer Lord Ashcroft, but also including much-admired sports stars like Lewis Hamilton, and much-loved celebrities like the cast of Mrs Brown’s Boys.

However the program unfortunately failed to explain just why such Tax Avoidance is so prevalent, and how nothing will change until we make fundamental reforms to our parliamentary system.

Some may think that Tax Avoidance is so devilishly complicated that it is very difficult for governments to come up with an effective way of dealing with it; or alternatively that it has up until now been very well hidden, but once exposed effective action can be taken. Neither of those points is true.

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Tropical paradise Bermuda is one of many British Overseas Territories that facilitates widespread Tax Avoidance. Picture © Mike Oropeza

The reality is that legislation, though complex, is easily within the capability of government experts to deal with. However they don’t, because successive governments have been absolutely complicit in facilitating Tax Avoidance, and will undoubtedly continue to be so, while all the time trying to fool us by making statements to the contrary. The reason is very simple – in a system of government where our political parties are reliant on private funding to run their operations and fight election campaigns, they are completely beholden to the providers of that money as to what legislation they enact. Take for example ex-Tory Treasurer Lord Ashcroft, who is one of the worst individuals for avoiding tax and featured in the recent program. He has donated over £10 million to the Tories over the years, and indeed contributed £500,000 to their recent General Election campaign. ‘He Who Pays the Piper Calls the Tune’, and his involvement in Tory funding therefore represents a massive conflict of interest. What chance is there of the Tories, even if they have a fit of good conscience and want to take action on Tax Avoidance, being actually able to do so, when their ability to win general elections is dependent on the continued financial support of someone who clearly doesn’t want such changes to be made? It obviously isn’t going to happen. And it’s not just Lord Ashcroft – over half of all Tory funding comes from the financial sector*, providing a relentless source of pressure to keep such Tax Avoidance loopholes open. (I’m afraid it’s not just a Tory problem either – the last Labour administration under Tony Blair was similarly reliant on donations from wealthy business people).

So what will actually happen? There will be many outraged speeches in Parliament, closely followed by promises of firm action by the government. There will then be the ritual punishment of some of the more minor players (the cast of Mrs Brown’s Boys better watch out), followed by some relatively insignificant changes to legislation which the government will talk up to make us believe the problem is solved. However behind the scenes the government will be reassuring people like Lord Ashcroft not to worry, be patient, and soon all will be well. Then, in a year or two’s time, when it’s all blown over, the government will quietly make some more changes to tax legislation, with a couple of loopholes deliberately included to help their wealthy friends. And that will be it – back to business as usual.

Don’t forget, whenever the government makes cutbacks on benefits, refuses to pay public sector workers a fair wage, cuts payments to local authorities, or generally does anything in the name of Austerity – justified by saying that state finances are in a mess and the deficit is too high – the real reason there is a shortage of money is because the wealthy elite are being allowed to get away without paying their fair-share of tax (Tax Avoidance is estimated to cost the country £95bn/year) and the rest of us all have to pay for it. And that won’t change until we stop political parties being funded, and therefore controlled, by the wealthy elite.

https://www.theguardian.com/politics/2011/feb/08/tory-funds-half-city-banks-financial-sector

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Google – Tax Avoider

The news this week has been full of comment about Google, its dreadful tax avoidance, and the way it managed to strike a cosy deal with the Inland Revenue to get away with paying only 10% of the tax that should have been due on its colossal UK profits. It’s certainly been one-in-the-eye for George Osborne, who started the week proclaiming the deal as ‘a major success’, though it became increasingly clear the words ‘abject failure’ would have been more appropriate.

Much has been written about where the fault lies, and it can certainly seem difficult to get to the core of the issue. However, as with many things in our corrupted political and economic system, the criminals at the top like to make a simple issue complicated, in order to hide and so sustain their continuing bad behaviour. So let’s look at what’s actually happening here.

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Google are only the latest in a long line of corporates to pay little tax on their vast UK profits.

Firstly, though Google has undoubtedly behaved abysmally, they are not responsible for the well-being of ordinary British people, nor for maintaining our public services, and nor has anyone at Google been ‘elected’ on any such promises. Therefore although it is certainly easy to point the finger at their moral bankruptcy, one can really expect little more from a corporation whose main objective is to maximise profits for its shareholders and staff. The responsibility for ensuring fairness in our society lies with our government and their agents (in this case the Inland Revenue), and if there has been failure (and there undoubtedly has been failure) it is they who are ultimately responsible. However it is here that things get murky.

Our current system of government allows for the private funding of political parties, and that inevitably creates a massive conflict of interest. The Tory party for example gets over half its funding from the financial services sector alone – so to whom do their loyalties lie? The people who fund them or we who elect them? Or to put it another way – if the Tory party were to seriously start clamping down on all the egregious behaviour in the corporate sector, to what extent would that impact their political donations, and consequently their ability to win elections? Such a conflict of interest would be unthinkable in any other area of society, and yet in politics it has become so ingrained that people rarely discuss it.

Make no mistake, clamping down on all the various tax-avoidance measures that companies like Google utilise is actually very easy (and don’t believe for one instance the politicians who say nothing can be done without international co-operation either). Systems have already been devised (for example Unitary Taxation, see link here), which would deal with most of the shifted profits/tax haven nonsense. The fact of the matter is that our leaders don’t want to clamp down on corporate tax avoidance in any meaningful way, because to do so would alienate the very people whose money they need to stay in power. Of course public opinion has to be kept compliant, and so occasional token efforts are made (eg the ‘major success’ of getting Google to pay £130 million tax, when closer examination reveals that £1 billion would have been a more accurate figure), in order to stop the masses getting too restless. However the fact remains that the government, and in particular the Tory Party, are totally hand-in-glove with the corporate sector, and assist them in their continued efforts to rip-off ordinary people.

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George Osborne proclaims ‘major success’ against corporates, but is actually helping them rip us all off. Picture © M. Holland

The sheer hypocrisy of all this of course is that when the government continues to make cutbacks and impose Austerity, justifying it with statements about balancing the books, the reality is that the books could just as easily be balanced by simply dealing with the issue of tax avoidance (which runs at about £95 billion per year* – easily enough to sort out the government finances). Or to put it another way, the Tory party would rather make cuts to the NHS, local government, in-work benefits and a whole host of other social services, all the while increasing the misery for millions of ordinary people, rather than do anything to annoy their fat-cat friends.

As long as private money remains in politics, it means that our so-called democratic processes have been completely hijacked by the wealthiest members of society, and legislation will continue to be enacted (or not enacted) that enables the very-rich to get even richer while ordinary people suffer, and see their standard of living steadily diminished.

* http://www.taxresearch.org.uk/Blog/2013/10/11/hmrcs-new-tax-gap-report-a-work-of-fiction-and-guess-work/

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Labour’s Lurch to the Left

By electing Jeremy Corbyn as its new leader, the Labour Party has finally thrown off the last vestiges of Blair-ism and taken a firm step back towards its Leftist roots. This has led to much shock, both within the party and outside it, with the inevitable virulent attacks from the mainstream media. So what is actually happening here? Has Labour really made itself unelectable by taking on a thoroughly discredited ideology, or is this the start of a fundamental change in our political system?

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Unlike in the 1980’s, society is no longer blighted by militant Trade Unionism. Picture © Nick Efford

The first thing to say is that the frequent comparisons with Labour’s last lurch Left in the 1980’s are completely wide of the mark – because the country and the economy are in vastly different positions now to what they were then. In the early 1980’s the economy was stagnating, largely, many believed, due to the effects of militant Trade Unionism (those old enough to remember will recall the devastating strikes of the 1970’s and early ’80’s, including the dreadful ‘Winter of Discontent’). Under such circumstances it wasn’t very likely the electorate were going to turn to a party espousing hard-Left policies (and don’t forget that at the same time the whole of Eastern Europe was still in the grip of Soviet-style Socialism, again hardly an advert for the benefits of Left Wing economic practices.) So when Margaret Thatcher came along promising to rein-in the unions and let ‘the markets’ provide wealth for all, it was hardly surprising she was able to crush Labour and romp to three consecutive election victories.

However things are now very different. The current economic crisis, and excessive government debt, have been caused not by Trade Union militancy, but by an out-of-control financial system, itself the product of Right Wing free-market economic theory. In other words, in the 1970’s the Left caused the problems, with the Right promising the solution, whereas now the roles are reversed with Right Wing theory causing the problems, and the Left promising to come to the rescue.

Having said that though events aren’t simply a mirror image of each other (history never does quite repeat itself) and we need to be aware of the differences. In the 1980’s inequality wasn’t that severe, so there was a real feeling that ‘we’re all in this mess together’; and in those circumstances Margaret Thatcher was able to mobilise support from all classes of society – both the business community and workers. Now however, after 35 years of ‘Free Markets’, levels of inequality are far, far greater than they were in the 1980’s, and are in fact nearly at levels not seen since before the First World War. So it’s absolutely obvious that we’re not now ‘all in it together’, and while a privileged strata at the top of society enjoy almost unheard-of wealth, those at the bottom are being forced to endure endless cuts to public services and ever-deeper Austerity. In other words society is incredibly divided, and in such circumstances no one party can whip-up widespread popular support. The Tories with their ‘business as usual’ approach can probably rely on the continued support of the top third of the population, who are currently doing very nicely, thank you (that’ll be the third of the population that voted them into power – just – in the May election). Meanwhile, at the other end of society , an extremely large number of people (though quite how many it’s hard to judge) will probably vote for any party which promises an end to their poverty and economic misery. In the middle are all those who are just about getting by, but would probably like to see a change from the usual batch of disingenuous politicians, or have sufficient moral integrity that they don’t just vote out of self-interest. The big question is whether Corbyn and the Labour Party can turn enough of that middle section to vote for them. To do that they need to show pragmatism, maturity and above all, economic competence.

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John McDonnell, Labour’s new Shadow Chancellor, is putting forward very different economic ideas. Picture © Kolrobie

The first thing they need to do is show they’ve learnt the lessons of history and aren’t just old-fashioned Socialists, who want to nationalise everything and in so-doing – in most people’s opinion – crush the economy. They need to recognise that the public do, in general, support private enterprise, but it’s the repulsive excesses of unregulated Free-Market Capitalism – out-of-control multinationals, corporate corruption, cronyism, rampant tax-avoidance, all leading to vast inequality – that people want to see the back of. Things on that front are looking good so far where, despite the media’s attempts to portray them as old-style Socialists, Corbyn and his shadow chancellor John McDonnell have actually so far only talked about re-nationalising essential public services (a policy which opinion polls indicate is supported by the majority of the population). Their policies of balancing the books, not by Austerity, but by clamping down on tax-avoidance and increasing taxes on the very wealthy are also sure-fire vote-winners. So, economically they are so far looking very sound indeed.

They will of course also be attacked for relatively trivial things, and just need to make sure they don’t give their enemies any more ammunition than they have to (Jeremy Corbyn would be well-advised to bite his tongue and sing the National Anthem occasionally); and they will need to explain and deal with past ambiguous statements on things like the IRA and Israel, which so far they have done pretty successfully. However there are three issues they do need to be very wary of, issues which are highly contentious but don’t necessarily follow a straightforward Left/Right divide.

The first is nuclear weapons. Jeremy Corbyn may well support nuclear disarmament, but he needs to be aware that though there is plenty of support for cutting-back on the astronomical costs of running Trident, that doesn’t mean that the general public agree with him that nuclear weapons should be got rid of altogether. Ignoring public opinion on that issue would be a massive vote-loser, and could indeed cost him an election victory.

The second issue is migration. Opinion polls show that immigration is for most people now the single biggest election issue. Though there is no doubt that most of the population want to show compassion for refugees and help where they can, that doesn’t necessarily mean they support the sort of open-door policy nowadays being espoused by some politicians. If Labour were to move in that direction, and so increase significantly the already problematic 330,000 per year net inward migration, they would undoubtedly be alienating many of their potential supporters.

And the third issue is the EU referendum, which admittedly is a potential minefield for all political parties. Jeremy Corbyn has already stated he will campaign for Britain to stay in regardless, which is a bit premature and could even go against some of his union backers. He and his team need to think very carefully how they will play this, as again they don’t want to shoot themselves in the foot over such a divisive issue.

In summary though, Jeremy Corbyn and his team are serious contenders indeed, and despite all efforts by the mainstream media to portray them as crazy no-hopers, the skill with which they have (so far) dealt with their detractors has their opponents already realising that defeating them in the next general election will be no easy matter.

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The Labour Leadership

With the demise of Ed Milliband after Labour’s election defeat, the race is now well underway to find a successor. Initially this seemed as if it would follow the predictable path, with various pro-business Blairite-type candidates fighting it out between them, while a token ‘Old Labour’ Socialist-type candidate kept the Left of the party happy but would inevitably come last. However things do not seem to be turning out that way.

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Jeremy Corbyn is shaking up New Labour diehards. Picture © David Hunt

That old warhorse of the Left, Jeremy Corbyn, while barely scraping past the nomination stage, has since gone from strength to strength and is now, according to some polls, in the lead. This has led to all sorts of handwringing from ‘New Labour’, bemoaning the fact that any return to traditional Labour values will alienate the electorate and make the party unelectable; while at the same time many grass-roots Labour supporters are ecstatic that finally there’s a chance that Labour will abandon its policy of mimicing the Tories, and will at last go back to standing up for the rights of ordinary working people.

So which side is correct? Well, unfortunately, in this hugely unequal society in which we live, to an extent they both are. Since the end of the Second World War, seventy years of unrestrained Capitalism has led to a society with as much inequality as in the late Victorian era. In such circumstances those who do well out of the current system (which inevitably includes most of the 11m people who voted Tory in the recent election) are probably recoiling in horror at the thought of any candidate who threatens any of their wealth, or doesn’t think that the word Socialism is an insult best consigned to the dustbin of history. At the same time, the 500,000 people forced to use foodbanks, the 1.8 million unemployed, the 13 million people living in poverty, and anyone else who has any sort of conscience or compassion for their fellow human beings whatsoever, are probably desperate for someone to espouse an economic narrative which rejects endless Austerity, puts people before business, and wants to build public services rather than destroy them.

We also now seem to be living in a time where most people vote purely out of self interest, and for what benefits them, rather than what is good for society as a whole – and it is that which decides elections. As our ridiculous first-past-the-post constituency system means that a party only needs to get 36% of the vote to get a majority in parliament, it means that if a party can keep just over a third of the electorate happy, it makes no difference how poverty-stricken, miserable and deprived the rest of the population become – they can all go hang as their votes won’t be enough to make any difference. This is what the Tories relied on during the last election, and sadly it worked.

So where does this leave Labour? Well the Blairite New Labour policy was, and is, all about stealing Tory votes, and came as a response to the crushing defeats inflicted on Labour during the Thatcher era. At the time it was probably the only thing they could do – however that was before the financial crash and policies of Austerity. Now there are millions of people bearing the terrible brunt of the current economic system, meaning that it’s perfectly possible for Labour to get elected on a platform, not of trying to appeal to Tory sympathisers, but of rejecting the current Free-Market, pro-business orthodoxy completely, and instead appealing to the masses of ordinary people left behind by the current system. However that does’t have to mean going back to old-fashioned Socialism (in this respect the Blairites are probably right, and it would make the party unelectable) but instead taking a path, that while demonstrating economic competence, and recognising that private enterprise certainly has its place in modern society, at the same time removes the profit motive from essential public services, and ensures that private enterprise, where it does exist, is controlled and properly regulated for the common good. In short, policies that ensure that the benefits of our capitalist system are felt by all members of society, not just a wealthy elite. Any candidate that is able to get that message across may indeed be able to get enough ordinary people behind them to win an election and form a government, and so put society in a far better place than it is now. Jeremy Corbyn may well be that man.

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Greece and The Euro

Over the next few weeks the news will be full of the unfolding Greek tragedy, and if current trends are anything to go by most criticism will be firmly directed either at the Greek people – for borrowing so much money in the first place; or the Syriza government of Alexis Tsipras and his finance minister Yanis Varoufakis – for their reckless handling of the crisis. However the situation is far too complex to paint in such black-and-white terms, and there are so many vested interests at play no-one directly involved can be trusted to give an honest interpretation. One thing is sure though, the Greek government are challenging the very foundations on which the EU, the Euro, and our entire Free Market Capitalist system has been built, and for that they should be applauded.

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Greece’s Prime Minister, Alexis Tsipras, is the first EU leader to challenge the current neo-liberal orthodoxy. Picture © FrangiscoDer

There are undoubtedly many deep structural and cultural problems in the Greek economy: and endemic tax-avoidance, financial profligacy, an unsustainably low pension age, and a bloated public sector all need addressing. However the central part of the current crisis is in fact just a more extreme version of what the UK is currently going through – a corrupt elite controlled and manipulated the financial system for their own gain, and when the system came crashing down, ordinary people were expected to pay the bill through policies of Austerity.  The only difference is that Greece’s government debt is higher than ours (180% of GDP vs 82%) and so the Austerity measures being imposed are that much more severe. So, whereas in this country ordinary people are, so far, taking it on the chin, in Greece they’ve finally had enough. And of course, on top of that, Greece’s membership of the Euro complicates matters even more.

So what is to be done? Well, Greece has two choices. It can either do what its creditors would like – carry on enduring intense pain almost indefinitely (and don’t forget their current economic situation is already worse than America’s was during the Great Depression); or default on its debts, probably leave the Euro (and maybe even the EU), endure even worse pain and  chaos for a year or two before finally getting itself back on some sort of even keel.

But this is where those vested interests come into play. If Greece was a completely independent country it could choose its own path out of this mess (and plenty of other countries have defaulted on their debts or engaged in money printing in response to an economic crisis). However as a member of the EU and the Euro, it is beholden to a whole load of external financial and political interests. And those interests care little for the suffering of the Greek people, only their own financial gain or political ideology. Its creditors want their money back, and will do anything to force the Greek government to pay, even if the Greek people have to live in complete penury for generations. Meanwhile the proponents of the European project are so wedded to the idea of ‘ever closer union’ that they cannot countenance the idea of Greece leaving the Euro. And this is the crux of the matter. Almost everyone is agreed that Greece should never have joined the Euro in the first place (and the Greek government of the time certainly has to bear a heavy responsibility for that).  One way to deal with the problem therefore, would be to plan for some sort of structured exit from the Eurozone. Unfortunately the mandarins in Brussels are so wedded to the concept of the European project that they cannot even consider such a thing, as it would go against everything they stand for. They, unfortunately, would rather see Greece crash out in a mess, for which they can blame the Greek government; than admit maybe they got it wrong in the first place and perhaps the idea of the Euro isn’t so great after all. And that is what will probably happen – the current crisis will escalate, the banking system will collapse, and Greece will descend into a prolonged period of even greater pain – all so that the Eurocrats in Brussels can say ‘wasn’t our fault – it was those damned Greeks who ruined it.’

Time will tell whether Alexis Tsipras and Yanis Varoufakis are clever game-players or well-meaning amateurs, and to what extent they have planned and prepared for the events that are now unfolding. One thing is certain though, the Greek people, for all their faults, are no more to blame for the current crisis, than the British people were to blame for the financial crash we went through in 2008. Corrupt governments, failing democracy, vested corporate interests, blind faith in a broken system, and an out-of-control financial sector have led us all to where we are today.

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Non-Dom Tax Avoiders

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Multi-Billionaire Football Club Owner and London resident Roman Abramovich is registered ‘Non-Dom’. Picture © Mark Freeman

This week the Labour Party made a manifesto pledge to abolish the scandalous ‘Non-Dom’ rule, which allows wealthy individuals to avoid paying tax on their foreign earnings, while the rest of us ordinary mortals have to pay all our tax in full. This rule is long-overdue for abolition, as it means that certain people who live here permanently (and in some cases were born here), can enjoy all the benefits and privileges residency in this country brings, but none-the-less dodge tax by shifting their cash abroad and stating that at some unspecified point in the future they intend to leave the country.* (The list of people benefiting from ‘Non-Dom’ status is quite shocking, and includes the Governor of the Bank of England and the chief execs of 3 of the 4 big high street banks.*)

The Labour announcement produced the predictable cries and squeals from the well-off, who now face the prospect of being slightly less well-off. However it also threw up some well-worn arguments about the generation of wealth, which are often deployed by those defending Free Market Capitalism. Namely:

1. If the wealthy are taxed too much they’ll all flee abroad, taking their money and talent with them, leaving us all destitute.

2. We need to attract wealthy foreigners to this country as without them our economy will collapse.

Both these arguments are utterly ridiculous, but show the extent to which Free Market Capitalist thinking has entered our consciousness, and brainwashed large sectors of the population.

Firstly, it is nonsensical to believe that this country needs foreign money in order to thrive. The people of this country have a long and proud history of success, and have for centuries succeeded in generating wealth through their own talent, effort and hard work. To now suggest that we need wealthy foreigners to guide us is to somehow suggest we’ve all suddenly become useless, lazy and incompetent.

Secondly, the idea that a few ‘talented’ people are the ones who generate all the wealth is also complete rubbish. The wealth of this country is generated by the combined efforts of every man, woman and child who contributes their labours to the general good and well-being. To suggest otherwise is to dismiss the priceless contributions so many of us make. And even though it may be true that we need bright brains to drive industry, technology or become entrepreneurs, this country has never been short of such talented people, and if a few of them do up-sticks and leave there are plenty more to take their place. In fact, personally speaking, if a few selfish individuals do put their own personal wealth ahead of any care for the society they live in, then I don’t want them here anyway.

Two more points it’s worth bearing in mind. This argument about ‘Talent’ forgets to mention that it was our ‘Talented’ bankers who led us into the financial crash of 2008. So ‘Talented’, but apparently they never saw that coming (or maybe they did but were too busy filling their boots to care). And many corporate disasters have been overseen by management who afterwards claimed the business was too big or complicated for them to fully understand what was going on. Again, talented? Or just enjoying the privileges and good fortune of being part of the wealthy elite.

Finally, in recent years the massive influx of foreign money has been a huge contributor to the increase in house prices, and consequently rents. That may have benefited property owners, but for the majority of the population all it’s done is lead to increased hardship, and in the case of central London, a form of social cleansing.

This argument that we somehow ‘need’ the rich is a complete lie put about by, not surprisingly, the rich (and those they’ve brainwashed) to justify them increasing their wealth while the rest of us are forced to suffer endless Austerity.

* Non-Dom fully explained: http://www.bbc.co.uk/news/business-32216346 Bank Chiefs: http://www.bmmagazine.co.uk/newswire/labour-non-dom-threat-hits-rbs-barclays-lloyds-boe-governor-carney/

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Defenders of the Free Market

Yesterday a post was made on the website of the Centre for Policy Studies*, a right-wing think-tank that was set-up by Keith Joseph in 1974 to promote ‘Economic Liberalism’ – now more frequently called neo-Liberalism or Free Market Capitalism. Also counting Margaret Thatcher as one of its protagonists, this group of course proved to be very successful, and its policies were subsequently adopted by most Western governments and political parties. For many years, from Margaret Thatcher becoming Prime Minister in 1979 until the Banking Crash of 2008, these economic doctrines were pretty much unquestioned  – I myself was an advocate of free markets during that time.

Margaret Thatcher was Deputy Chairman of the Centre for Policy Studies. Picture © US Govt

However the crash of 2008 changed all that, and many people saw that free markets, far from benefiting everyone, only actually benefit the narrow elite at the top. The privileged few use corporate structures to ensure the wealth that capitalism generates does not trickle down, but instead remains in their hands, which also means that ‘competition’ only really exists at the bottom of society, where workers have to compete for who will work for the lowest wage. Any attempt by the government to redress this wealth imbalance is thwarted by tax avoidance, and in particular hiding money offshore in tax havens. The result is endless grinding poverty at the bottom and ever-increasing wealth at the top. Privatisation of public services of course accelerates the process, and then when you add into the mix the inevitable economic crises (as the financial sector takes greater risks to increase its wealth even further) and the subsequent government bailouts (state funds being use to support private industry) we get to see that, remarkably, Socialism is still alive and well – but only for the wealthy and the world of business. Paid for by yet harsher Austerity, these bailouts serve to accelerate the transfer of wealth from poor to rich, and lead to an ever-more unequal society (hence 500,000 people are now using foodbanks while at the same time Executive Pay soars higher than ever.)

So, to get back to the post from the Centre for Policy Studies, Matthew Rees was commenting on the recent Occupy protests in Parliament Square, and said that if the protestors really were interested in Civil Liberties they should be supporting Free Trade, not opposing it, and highlighted the forthcoming TTIP treaty as an example of this. This was an extraordinary statement.  The TTIP treaty, if it goes through, will allow corporations to sue governments over anything which causes them financial loss. The possibilities here are terrifying. The government wants to stop the use of genetically modified food? Biochemical companies could sue them for potential ‘lost trade’. We decide we don’t want to take the environmental risk of fracking? Fracking companies could sue us for lost business. The government proposes changes to the NHS? Health companies could sue if they think that will cost them money. The government wants to encourage people to cut down on smoking? Tobacco companies could sue for lost revenue. The welfare of ordinary people will come second to the profits of multinationals, and all these disputes will be settled behind closed doors, with only lawyers and corporate cronies having a say in the outcome.

If Matthew truly does believe that such legislation serves democracy, civil liberties, and the will of the people (and if he is not being paid to say such things by the corporations who will benefit) then I can only say that he must be so blinded by his own ideology, that he is unable to accept the evidence of how badly society now operates for millions of ordinary people.

http://www.cps.org.uk/blog/q/date/2014/10/23/occupy-london-giving-civil-liberties-a-bad-name/ 

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Austerity Affects Law and Order

The inevitable consequence of Free Market Capitalism is that society becomes ever-more unequal, as the wealth gap between those at the top and those at the bottom gets larger and larger. This happens directly (with salaries diverging, and wealthy people using their assets to generate yet more wealth for themselves), but it also happens indirectly, as  pressure from those at the top to pay less tax forces the government to balance the books by imposing Austerity – the result of which is ever-greater cuts to public services, and so an ever-faster decline in the standard of living of the more disadvantaged members of society.

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Cutbacks to policing as a result of Austerity are starting to make our streets less safe. Picture © Canley

This last point took a particularly unpleasant turn today when the Police Inspectorate announced that much criminal activity was now going uninvestigated due to lack of resources, and in some cases the victims of crime were even being asked to do the investigations themselves (including interviewing neighbours, looking for fingerprints, locating CCTV footage or checking eBay for their stolen property.)  The result of this, it said, is that a lot of offences, including criminal damage, car theft and burglaries of property were effectively being decriminalised.*

Sir Hugh Orde, President of the Police Officers Association made a direct link between this and Austerity, saying ‘The reality of austerity in policing means that forces must ensure that their officers’ time is put to best use and this means prioritising calls.’

This is of course just the thin end of the wedge, and as Austerity continues to bite more and more of these essential services will be cut back, and our streets will become less and less safe. Anyone who has ever travelled to countries with very divided societies and under-funded police will know where this all ends up. In places like South Africa, and many parts of South America the huge crime levels mean that the wealthy start to barricade themselves in their homes, living behind razor wire, high walls or in secure compounds, and often with private security.  Meanwhile on the streets the less well-off have to make do as best they can, often living in constant fear of the dreadful crime levels. In this country we may be some way off from such awful times yet, but we are undoubtedly taking the first steps in that direction. And as long as those with the reins of power think that their personal wealth is all that matters,  the needs of society are irrelevent, and it’s simply down to every individual to look after themselves, then for sure that is the kind of society we will eventually find ourselves living in.

* Ref:  http://www.huffingtonpost.co.uk/2014/09/04/police-not-investigating-crimes_n_5763632.html

As a sad addendum to this piece, last week it was announced that lawyers are setting new records for personal wealth, with more of them than ever before now earning over £1m/year. Could our society be any more dysfunctional, with lawyers raking in so much money, whilst those who actually catch criminals are unable to do so due to lack of funds? http://www.thetimes.co.uk/tto/business/economics/article4192714.ece

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The Injustice of Free Market Capitalism

This year there has been a flurry of excitement with the release of the book Capital in the Twenty-First Century, written by the French economist Thomas Piketty . In it Piketty explains how the inevitable result of Free Market Capitalism is ever-greater levels of inequality in society – and after a couple of centuries the only reason levels of inequality are not higher now than one might expect, is because two world wars effectively hit the ‘reset’ button on our economic system. However, nearly 70 years after the end of World War II, levels of inequality are now approaching the levels they were prior to the outbreak of World War I.

Piketty provides plenty of statistical evidence to support his claim – however we only need to look around us to see everything he predicts happening before our very eyes.  So what have we got? The government is currently claiming that the economy is on the up (annual GDP growth of 3.1%), the job market is vibrant (unemployment down to just under 2.2m),  the number of people in poverty is falling, and the booming property market is adding to the (theoretical) wealth of millions of homeowners. Everything is therefore great – except of course it’s not.

Deepening inequality is not incompatible with a booming economy, it just means the wealth is being ever-more concentrated in the hands of the privileged. The economy growing? Well if the wealthy get wealthier faster than the poor get poorer then of course overall wealth is going up. Job market vibrant? Well 2.2m still don’t have a job, and with 1.4 million people now on zero-hours contracts one has to seriously question the validity of those statistics anyway. Number of people in poverty falling? Well the poverty rate is still near 20% (over 12 million people) and new Food Banks are still opening every week to feed  a need which is growing not diminishing. Booming property market? Yes, great if you’re a home-owner, awful if you’re a renter who is seeing increased property prices once again feeding through into higher rents.

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Martin Sorrell – one wonders how he can justify paying himself a salary of £30m/year. Picture © Eirik Solheim

We’re a country of two halves, and nowhere is this more apparent than in some of the news items this week. Firstly Freshfields, the law firm, has announced that  last year its partners earned an average salary of an extraordinary £1.5 million each. Even more extraordinary, WPP, the advertising agency, has just announced that its boss, Martin Sorrell, has been given a pay-rise – and he now takes home (I can’t bring myself to say ‘earns’) £30 MILLION per year! And then last week the yacht manufacturing industry gleefully announced that at the luxury end of the market business is once again booming, with a record number of super-yachts on order (presumably as all those ridiculously rich people like Martin Sorrell and the Freshfields lawyers have to decide what to do with all their money.)

However at the same time as all this is going on, the government has confirmed that there will be no above-inflation pay-rises for public sector workers for the next four years, citing the perilous state of government finances. Coming after several years of pay-freezes, this means that many key workers (eg firefighters, teachers, care-workers etc) have seen a sustained fall in leaving standards since the recession, and are now, on average, £2,245/yr worse off than when the coalition came to power. As a result of this the TUC has called a one-day strike* – and the response of the coalition, rather than address the issues being raised, has been to condemn the strike and confirm further planned tightening of anti-union legislation.

Anyone with any sort of moral compass whatsoever has to seriously question a system that allows some people to earn many millions of pounds per year, while vast swathes of the population are in poverty and visiting foodbanks. You also have to question what sort of a society it is that justifies inflicting austerity on nurses and teachers, while heaping ever-greater rewards on bankers, lawyers and advertising executives. However as long as we have a system of government where lobbying and party funding mean the levers of power are controlled by those with money, I guess little will change.

http://www.theguardian.com/politics/2014/jul/09/million-public-sector-workers-prepare-strike

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Westminster Abbey Occupation

Yesterday members of DPAC (Disabled People Against Cuts), Occupy, and UK Uncut staged a protest in the grounds of Westminster Abbey. This was to highlight government cuts to the ILF (Independent Living Fund), a fund which enables some of the most severely disabled members of society to live relatively independent lives*. Cuts to this fund are of course part of the much wider cuts the government is imposing on the most disadvantaged members of society in the name of Austerity.

I was fortunate enough to be involved in the organisation of this protest, and this is a brief personal view of how events unfolded on the day.

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The Westminster grounds where the protest took place. Picture © Christine Matthews

Having met at a secret location close to Westminster at lunchtime, and having meticulously gone through final preparations, we set off for the Abbey at 3.30pm. The plan was to occupy the front grounds of the Abbey, and set up camp before the authorities had time to act. However my role was as part of a small team that was to talk directly to the Dean of the Abbey, John Hall, and hand him a letter outlining the reasons for the protest.  So while most of my fellow activists went through the gates and began setting up camp, I and a colleague went into the Deans Court Yard and asked to speak to the Dean.  We weren’t sure if he would come out, but after about 10 minutes he duly appeared and we gave him the letter and explained our case. Discussions with him were amicable enough, and he did express some support for the rights of disabled people, however he was adamantly opposed to the concept of direct action, and particularly if it affected his church! We did explain how the Archbishop of Canterbury has expressed great concern recently for the plight of people suffering government austerity, and how a couple of months ago 27 Anglican Bishops signed a letter condemning policies which have led to a massive upsurge in the use of Food Banks. We also said we wanted to work with the Church to ensure the protest remained peaceful and non-disruptive. However he was having none of it – and said he would not allow the protest to continue. After 10 minutes or so we parted.

On returning to the front of the Abbey it was clear things hadn’t gone quite to plan. The gates to the grounds were locked and the police had formed a cordon around the camp. This meant that although 100 or so protestors were inside the grounds, many more, including myself, were now trapped outside and unable to join the protest. More seriously, not all the equipment  had made it inside the site, so it was not possible to build the camp in the way that was orginally planned. This was actually quite a big problem as several of the protestors were severely disabled with specific care needs.

There then ensued a long stand-off, with the protestors inside building the camp as best they could, while those of us on the outside provided vocal encouragement. On the outside we were also joined  and supported by David Graeber (Professor at the London School of Economics) and John McDonnell (one of the few MP’s who actually seems to care about the plight of ordinary people). The performance artist Pete  the Temp also appeared and got the crowd going in his usual exuberant style.

As time passed by it became clear that there were increasing concerns that, due to the logistical problems outlined above, it would not be possible to sustain the camp overnight (the original plan was to hold the camp for 3 weeks, until the close of parliament). Also police numbers were constantly increasing, far outnumbering the protestors, raising the threat that some sort of forced eviction was being planned. Finally, shortly before 9pm, the decision was made to leave the camp, and the police allowed everyone to go, taking their equipment with them.

On the surface it was disappointing that we weren’t able to hold the camp as long as we intended. However the protest was nonetheless very successful in generating a lot of publicity for a massive issue, with many reports across the media*, both about the protest itself and also cuts to the ILF. What I thought was particularly significant was that one week earlier no fewer than 50,000 people gathered in Parliament Square to protest against Austerity (including many well-known speakers) – and the media barely mentioned it. Yesterday 200 protestors tried to stage an Occupation, and it generated significant amounts of publicity for the issue in question. It goes to prove, in my opinion, that traditional methods of protest achieve nothing, and non-violent direct action is the only realistic way to achieve change. I was also personally disappointed that the church showed little interest in helping support disadvantaged people, and seems to be far more interested in looking after itself. Some would probably say I’m naive in expecting it to behave in any other way.

* ILF Details: http://www.theguardian.com/commentisfree/2014/mar/31/independent-living-fund-disabled BBC Report on the Protest: http://www.bbc.co.uk/news/uk-england-london-28074848

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