If we value a better future for all, the secret will lie in asking them what sort of world they want to live in and using their talents to create it.
“The secret message communicated to most young people today by the society around them is that they are not needed, that the society will run itself quite nicely until they – at some distant point in the future – will take over the reins. Yet the fact is that the society is not running itself nicely… because the rest of us need all the energy, brains, imagination and talent that young people can bring to bear down on our difficulties. For society to attempt to solve its desperate problems without the full participation of even very young people is imbecile.”
― Alvin Toffler
This week emotions have been running high. Many of the students whose lives have been seriously disrupted by the Covid-19 pandemic were further battered when their A level exam results were not what they had been expecting. At such a stressful time it is profoundly distressing that results have been reduced to an impersonal algorithm which has favoured those in private education and left many in the state education sector reeling and without the university places they had been hoping for. Hopes and dreams shattered in an instant.
According to Boris Johnson, the system was ‘robust’ and ‘dependable’. Yet many students who were already disadvantaged by social, economic and geographic divides as well as 10 years of disastrous government policies which cut spending on education, health and social housing impoverishing their families and reducing their life chances, had to deal with the fall out of months of remote learning and, for too many, little or no access to adequate technology as well. Where did the promised laptops and broadband access get to?
Boris Johnson’s ‘levelling up’ promise has failed, at the first hurdle, to deliver for young people whose lives are still ahead of them and who face a future of uncertainty and further hardship, depriving them of life opportunities. They have been let down and not just by Gavin Williamson’s ineptitude. It will further split the generations, reinforce peer inequalities and create more angst and division across the board. Free appeals won’t cut it. Students should not be in this situation in the first place!
At the end of May, the LSE published a report entitled ‘Covid-19 and Social Mobility’ which looked specifically at the how both the economic and educational shocks caused by the pandemic could wreak long term damage to young people’s prospects in life. It noted its concerns that the pandemic would ‘push young people into a dark age of declining social mobility because of rising economic and educational inequalities.’ However, it also pointed out that even before the crisis younger generations had already been facing declining mobility with falling wages, fewer opportunities and stagnant or declining living standards.
It is therefore not a new phenomenon and quite rightly we should be concerned about the likelihood of such rising inequality becoming even further entrenched as opportunities for young people are reduced by the combined consequences of 10 years of harmful government policies and the fallout from the pandemic.
This week the headlines have focused on the fact that the UK had plunged into recession for the first time in 11 years, with the economy shrinking by an unprecedented 20.4% between April and June. However, even before this, figures from the ONS showed that the economy was already displaying signs of decline with economic growth in the final quarter of 2019 at 0.0%.
Damaging economic fallout from this pandemic was predictable, but we cannot ignore that it has been the politically derived and cumulative effects of austerity which has made things much worse. The public and social infrastructure has been damaged beyond all recognition.
George Osborne said in 2012 of his austerity policies ‘You will hear those arguing that we should abandon our plan and spend and borrow our way out of debt… You hear that argument again today… A credible plan to deal with our debts is an anchor of stability and a pre-requisite of recovery.’
Whilst the deficit hawks cheered him on, the results of spending cuts have been predictable. Dealing with our debts has not provided an ‘anchor of stability,’ rather it has proved to be a ball and chain around society’s ankles. And it certainly hasn’t been the ‘pre-requisite of recovery’ promised.
As mentioned earlier, society was already paying a heavy price for the government’s reckless obsession with cutting spending and now the very real cost is being revealed in human terms, even more so during the pandemic.
- Both national and local public services in a state of decay
- Rising numbers of people on zero-hours or part-time or fixed-term contracts,
- Low wages, insecure work, rising private debt, poverty and inequality
- A social security system unfit for purpose and based on blame and punishment, not real support.
- Improvement in life expectancy has slowed since 2010
- Health inequalities have increased
- A record rise in the use of food banks and increased homelessness.
- The highest excess mortality in Europe during the pandemic
- Social inequalities revealed in the higher rates of death in deprived areas and amongst ethnic communities
All have combined to leave a society fractured with an unprecedented crisis of confidence, both before and after the pandemic struck.
And yet whilst Rishi Sunak took the only course of action open to him to stem the tide of unemployment and economic decline – a programme of fiscal spending – we had him yet again intimating this week that there will be difficult choices ahead. It echoed George Osborne responding to the publication of public sector borrowing figures by the ONS (Office for National Statistics) which was £51.1bn higher than the same month last year who warned that there would be ‘hard choices’ ahead for Boris Johnson and his colleagues on tax and spending.
Household budget rhetoric lives on in the corridors of power, in public institutions and disappointingly in the minds of the public as GIMMS has noted many times before. If we are to address the fallout, which will be considerable if left to the deficit hawks, we need to break the cycle in the latter.
It was regrettable again this week that the household budget narrative was reinforced in an article in the Guardian which referred to the report mentioned earlier in this blog in which the authors Stephen Machin and Lee Elliot suggested quite rightly that it was time to redress the balance as the pandemic threatened to further exacerbate the longstanding divisions in society. But its preferred mechanism for doing so was imposing a one-off progressive wealth tax on the top 1% richest people in Britain ‘to help repair government finances battered by recession and… repay all the extra government debt incurred by the pandemic’. They suggested that ‘failure to take action would ensure that the coronavirus crisis ushers in a dark age for social mobility.’
It is shameful that economists from a prestigious Russell Group university are still promoting the ‘tax funds spending’ trope. To be frank, it is the greatest scam ever; the deliberately created and reinforced illusion that tax of any sort pays for government spending. Equally inexcusable is the suggestion that the lives of future generations will depend on such an approach.
The simple truth is that governments with sovereign currency-issuing powers don’t need tax before they can spend, and they certainly can’t ‘repair the finances.’ As Deborah Harrington, an advisor to GIMMS and director of the NGO Public Matters, put it so succinctly in a comment on social media:
‘The debate we have around taxation is to treat it as if we were wholly dependent on extracting tax from the wealth of the rich in order to fund public services and social security benefits. As if it were a charitable concern rather than publicly funded. We behave as if tax was actually the income of government and that its spending is tightly constrained by it and that we have to go and borrow from the private sector when we can’t tax the private sector enough to pay for everything. These formulations entirely ignore the reality that the only creator of net financial assets into the economy (i.e. additional money) is the government itself. The government is more powerful and has deeper pockets than the private sector will ever have. We end up with a story that makes deficits into the enemy of ‘responsibility for the economy’. From this perspective, high taxation is ‘left-wing’ and tightly controlled and reduced public spending is ‘right-wing’. Yet both put deficit reduction and/or running surpluses on a pedestal, both are neoliberal perspectives.’
Yes, we can tax the wealthy in one way or another for the purposes of equity by removing their purchasing power and to reduce the enormous political influence that their excessive wealth affords them. That is the conversation that we should be having, not how we can collect more tax to ‘repair the finances’ or fund public services. Taxation does neither in the normal course of events.
A political world where the wealthy are seen as the wealth creators who should, by dint of being so, pay less tax thus causing wealth to trickle down (or so the narrative goes) has been shown to be political propaganda to justify government’s market-driven policies which have distorted the economy and impoverished many. With such a false household budget narrative, one can only imagine who will be made to pay in the future for this round of vital government spending to protect the economy.
On this basis, Johnson’s promise for increased spending not just to ‘level up’ and deal with the huge inequalities which have arisen (not just on his government’s watch) but also to invest in public infrastructure would appear arguable, indeed downright misleading, when the conversation is turning to how it is to be paid for. They seem to contradict his own Chancellor’s message that hard times are coming and there will be a price to pay.
It is vital that we knock this narrative on the head before many more people get hurt by the acceptance that there is no alternative.
There is one.
This week GIMMS shared a just-published video called ‘The Power of the Pound‘ which explains, in a very easy to understand format, how the UK can afford the things it needs for its citizens, like the NHS, social care, social security, education and pensions. We recommend our readers to check it out and pass it on.
We don’t have to accept the narratives pushed by politicians and institutions which frame government spending in household budget terms and make the claim that spending is constrained by a finite pot of money.
Our nation’s values should not be determined by the question of whether we can or cannot afford to pay for the things that improve society. Our values should be determined by how we share a finite pot of real resources more fairly and equitably to improve people’s lives and create an economy that works for everyone – including our young people who need all the support they can get to be a light for the future.
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