A system is corrupt when it is strictly profit-driven, not driven to serve the best interests of its people.
Suzy Kassem, Rise Up and Salute the Sun
Oh, the irony! This week in Boris Johnson’s ‘levelling up’ speech, he said: ‘It is an outrage that a man in Glasgow or Blackpool has an average of 10 years less on this planet than someone growing up in Hart in Hampshire’. He followed that by saying, ‘The Government’s mission’ was to ‘unite and level up across the whole UK, not just because that is morally right but because if we fail then we are simply squandering vast reserves of human capital, we are failing to allow people to fulfil their potential’.
Reading those words, it is difficult not to feel that one has been transported into an alternative universe, given that the poverty and inequality he is referring to can be laid directly at the door of government spending policies and the economic dogma which drives them.
Over the past year, we have learned the value of those key workers in the public and private sector who have, at some risk to themselves, kept the economy functioning during the pandemic, just as they did before its arrival.
This week, the TUC drew attention to the low pay and insecure employment which afflicts many in a variety of occupations, from social care to supermarkets and delivery drivers, and which were, it said, the principal reasons for ‘in-work poverty’. It makes it all the more difficult, then, to understand Treasury plans to cut the Universal Credit uplift, a move which will affect some of the poorest people in our communities, many of whom are in work.
Levelling up?
If Johnson’s vision for building back fairer and better is to be believed, it should start with recognising the value of those workers, as well as the economic improvement that better wages and terms and conditions could represent for the economy and people’s lives across the country. In this respect, it is the government which, through its legislation and spending decisions, has the real power to make that difference, if it chooses to do so.
And yet, even the Prime Minister’s own MPs are seeing through the rhetoric and are increasingly concerned that his words represent little more than soundbites, with little if no substance at all. This was noted by the Institute for Public Policy North (IPPR) who made the point that two years on since the promises to level up were made, there still exist ‘deep divides between and within regions’ which are continuing to grow, and that words had to move beyond mere rhetoric towards real action. So far, we have seen no sign of the promised ‘levelling up’.
This week the Birmingham Mail reported on a schoolgirl who was spotted filling her pockets with food for her younger sister, so she didn’t go hungry. It is yet another clear sign of the harsh reality of government policies over ten years, which have been reported on regularly by the GIMMS team in the MMT Lens. From the use of charities filling the growing gaps in public provision, the rise of food banks and homelessness and the decay of those public services which keep an economy and its people safe and healthy.
Yes, welcome to the 21st century. Britain regressing towards a return of Victorian values predicated, as it was then, on charitable works rather than government intervention.
In the same week, the findings of a report published by UK Children’s Charities revealed that council spending on early intervention services had halved, from £3.6bn to £1.8bn. It estimated that since 2010 a thousand children’s centres and 750 youth centres had been forced to close. The charities warned that local authorities were stuck in a ‘vicious circle’, meaning that a lack of funding forced cuts to services which then, in turn, resulted in more expensive crisis interventions and care placements later on.
The Chief Executive of The Children’s Society, Mark Russell, said: Behind the figures showing increased numbers going into care and becoming subject to child protection measures are heart-breaking stories of children facing sometimes horrific risks inside and outside the home, including neglect, abuse and exploitation.
And the Director of Policy and Campaigns at Action for Children, Imran Hussain, added that ‘An approach centred on firefighting crises is not a strategy that protects children.’
Again, this week, Channel 4 News reported on the consequences of the increased use of temporary housing on mental health. According to government statistics, more than 95,000 people in England are living in temporary accommodation which, according to previous reports, is often substandard and unfit for human habitation, with all that implies for both physical and mental health.
A study carried out by the charity Shelter and published in 2017 found a direct link, unsurprisingly, between poor housing and mental health issues. It revealed that more than half of the adults who were surveyed were suffering from depression, with children over three times more likely to demonstrate mental health problems.
That was before the pandemic. The housing crisis is not new, but the past year has made things much worse. It is a direct failure of the government to act legislatively to ensure that housing is fit for purpose and, through its spending decisions, to guarantee sufficient good quality housing at reasonable prices and truly affordable rents.
The problem has been compounded, over a decade, by the severe cuts to local authority funding from central government, which has impacted on its ability to ensure accommodation standards are maintained and that there is sufficient affordable housing stock available to meet demand.
While Rishi Sunak reinforces the concept of fiscal discipline, contrasting against the Prime Minister’s spending promises, the dire situation in social care rears its ugly head, yet again. It was revealed this week that at least 75,000 people are waiting for an initial assessment of their care needs after having contacted their local authority for support, and an estimated 159,000 (those already in the system and receiving care) were facing long delays in getting their annual care review.
Continuing lack of adequate funding has left local, government-run social care services more and more stretched and people are being abandoned at a time when they need support the most, and in some cases, may have died before getting the care they need. This is shocking and unacceptable in a civilised society. The Association of Directors of Adult Social Services said it was a ‘reflection of the parlous financial situation facing councils after a decade of cuts and a pandemic that had created staff shortages in care services.’
For a decade, this government has put fiscal discipline over the health of the public and has conned citizens into accepting the lie that there is always an eventual price to pay for its spending and borrowing. If Sunak gets his way, even after an astonishing display of the capacity of government to spend to prop up the economy in this time of crisis, that same lie is likely to be perpetuated, yet again, in the future. Already, ten years of selective government austerity has created a fragile society that is cracking under the strain and the public and social infrastructure is no longer fit for purpose. Can society cope with yet more?
And to make matters worse, it has been announced that Johnson, repeating his newly appointed Health Secretary’s suggestion that we could raise taxes to pay for social care, is backing proposals for a new tax to fund the ailing system. After having swept the issue into the long grass for too long, they have come up with a solution that continues to reflect the mistaken belief that tax funds government spending.
Great idea it is not! Taking money out of the economy, putting it into the metaphorical shredder and leaving people with less money to spend, is a recipe for more disaster. Such a solution would be harmful to an economy which has suffered from the consequences of previous government policies and austerity, and will add to the ongoing effects of the pandemic, which are far from over.
While the government emphasises its objective to get the economy ‘back to normal’, whatever that might mean, and at whatever cost to the nation or the planet, it seems that for a former Chancellor he’s not that bright. The logic of one person’s spending equalling another’s income seems to have escaped him. If you take more of that spending capacity away at such a time of economic uncertainty, you take away the income of those down the line. It is an inescapable fact. Such a solution would, quite simply, make a recovery even slower and harder to achieve.
Johnson’s levelling up programme is looking more like a sham.
Words are cheap. As Johnson promises the Earth, his Chancellor remains fixated on fiscal discipline. As always, the problem boils down to the false idea of monetary scarcity. So, after a year of vast government spending to manage the economic consequences of the pandemic, we are being wrongly told that there will be a price to pay in the end.
As we see over and over again, the public discourse is founded in both ignorance and political agendas. And again, this week, we were treated to yet another disgusting spectacle as the government won the vote to back the proposed cut in foreign aid, by a large majority, despite opposition on both sides of the House.
According to a poll, 66% of people backed the cut to aid, thus demonstrating once more the poison that spreads when people don’t understand how government really spends. That it is lying when it claims it has to cut spending because we’ve spent beyond our means, and must now tighten our belts in one way or another. It reinforces a message that then divides people in the belief that such spending could be at their expense, in terms of higher taxes or cutting their public services to pay for it.
This decision is short-sighted, particularly at a time when we need to work cooperatively globally to address the climate emergency, and also the poverty and inequality that has already derived from it and the decades of neoliberal dogma. Not just decades, but centuries, of exploitation of both the human and real resources that the west uses to maintain its people’s lifestyles, lie at the heart of the many problems faced by ‘developing’ countries.
Western institutions such as the IMF and the World Bank, through their imposition of unsuitable solutions to development, have made things worse; indebting many of those countries which then face the crushing burden of structural adjustment programmes that have ravaged them, creating yet more of the poverty and inequality which has become both endemic and destructive as a result.
In the light of the climate crisis, which is adding to those problems, it is only right that we reject the idea that we can solve them by pretending we live in a vacuum – the island mentality of pulling up the drawbridge. Our failure to act now, cooperatively at this crossroads in history, which will define what happens next, will be a failure for us all as a species if we fail to recognise that fact.
When the Prime Minister tells us that the cut is needed to keep public debt down, it is a lie. A lie with damaging consequences for some of the poorest countries in the world.
In stark terms, as Daniel Willis from the Campaigning Group Global Justice Now, commented, ‘when the inevitable death and suffering from aid cuts hits the news and every MP who has voted to sever the UK’s 0.7% commitment should know that blood is on their hands’. And, as even the former Conservative Prime Minister, John Major, said, ‘it seems that we can afford a ‘national yacht’ that no-one either wants or needs while cutting help to some of the most miserable and destitute people in the world.’
The economic ‘ignorance’, if that is what it is (and one must begin to question that assumption), is shocking. And the lack of compassion, unforgivable. This was further reinforced this week by the comments from a Tory MP, who enjoys the benefit of multiple homes and many thousands of pounds of public money claimed for hotel expenses, yet who voted for the cuts, saying, ‘we must not forget that, as my adult sons remind me regularly, every pound we spend on international aid is borrowed from future generations.’
The harm to future generations which include her sons, and any offspring, will not be future debt as a result of borrowing, or the threat of higher taxes to pay for it. Government is the currency issuer and has no need to borrow to fund its deficit. The burden of future debt is a myth promulgated by those serving an agenda. As Professor Bill Mitchell wrote:
“The idea that borrowing ‘takes money from the pockets of future taxpayers’ is nonsensical. The funds to pay for the bonds originate in the government net spending in the first place.
Clearly, deficits now are in part helping the current generation with income transfers and the like. But they also facilitate public education, public health and other infrastructure which provide massive benefits into the future for the current generation and their children.
Once you understand that then the idea that there is a future burden will make you laugh.”
The real harm to future generations will be a government that has failed people, both here and abroad, as a result of an inadequate response to the climate emergency and the vast levels of poverty and inequality deriving from a noxious economic dogma. When the suggestion is that the debt is more important than human well-being or survival, then we should start to ask questions. The so-called debt, that really isn’t one, concealed as it is by the smoke and mirrors of how government really spends, will still be there as the waters are closing over the heads of those same generations. That’s a big risk to take! Our children will not thank us.
On a connected point, it is also concerning to read, in this respect, the media headline this week ‘Global philanthropists pledge £94m to cover UK foreign aid cuts.’ At the same time as it is shameful that we have a government claiming, falsely, there is no money when we need urgent global cooperation to address the biggest challenge humanity has ever faced, it is, by abdicating responsibility, ceding power to philanthropists with political agendas, thus bypassing democracy. These are the equivalent of the Victorian ‘great and good’, distributing largesse to the deserving poor and then abandoning support when it no longer suits their corporate objectives.
This economic household budget bilge of unaffordability is not confined to the Conservatives. Labour continues to do an exceptionally good impression of bowing to the economic dogma of ‘hard earned taxpayer’s money’ which is, unsurprisingly, supported by many of the public whose ideas of how the government spends are couched in the usual household budget narratives.
A newly launched Labour group called Renaissance, rooted ironically in the language of ‘rebirth’, carried out a series of the ubiquitous ‘focus groups’ that it is so fond of, and now seems firmly committed to sticking to the notion that it will need to regain voters’ confidence in its fiscal integrity. Liam Byrne’s note left in the Treasury saying that there was no money left, which was so cleverly used by the incoming government of the day to justify its austerity programme, is still reverberating in the mind of voters today. Fiscal Discipline Rules! As for the concept of ‘rebirth’, it seems more like the promotion of the status quo. Hurry along now, nothing to see here.
Its report, which will be published later this year, reveals the concerns of voters about the national debt, and who also expressed the view that ‘it would be hard to trust Labour as the costs of the pandemic will have to be paid back for some time.’ Years of the endless retelling of the lies about the dangers of deficit and debt, or burdens on future taxpayers, continue to take their toll on the lives of working people.
Others in the focus groups were, apparently, concerned that centrally funded Labour local authorities were failing to do their job. It is regrettable that there remains a lack of public understanding of the background to some of that failure, which has affected Conservative and Labour authorities alike, forcing some even into bankruptcy.
Without an understanding of the difference between the currency issuer, which is the national government, and the currency user, in this case, local government, it is easy to appreciate voters’ concerns. And yet it is a situation that has been created by a decade of cuts to central government funding which have stretched local government budgets, forcing unpalatable decisions, either in cuts to services or increased local taxes and all that means for the health of local economies.
This is symptomatic of the hole that Labour has dug for itself over a decade when it had an opportunity to challenge this false narrative and build a new one. It rejected that opportunity and now is stuck with the consequences of that failure. Consequences that will reverberate for many years to come.
The household budget narrative is doing vast damage to future prospects both domestically and abroad, and yet we continue to accept it without question. It is doing vast damage to the prospect of managing the climate emergency, framed, as it is, in the false concept of monetary scarcity.
A report published by Vivid Economics has made clear, this week, that the commitment to dealing with the climate crisis is still lacking in real substance. It pointed out that the ‘green recovery’ promised by many governments last year had, quite simply, not materialised, and suggested that public money was being spent on things that harm the public. Jeffrey Beyer, a lead author of the report said:
“With stimulus programmes winding down, it is the end of the beginning of the Covid-19 recovery. We can only build back better sustainably if we protect the climate and nature. Unfortunately, it is impossible to justify the fact that public stimulus money is doing more harm than good to our climate and biodiversity, which underpin our economy. Nature has been particularly neglected, with fewer than ten of the countries we studied investing in nature-based solutions such as reforestation or wetland restoration. Ignoring nature misses out on the triple-win opportunity for jobs and the economy, climate, and biodiversity.”
“We did not see a sufficient shift to green spending. It’s hard to be optimistic when you look at the evidence about how much climate change and nature have really not been considered in public spending decisions.”
The challenge remains, and so far, the UK’s response has been limited and lukewarm, forged as it is on fancy rhetoric rather than real action. And globally, we haven’t even got over the starting line as the key measures for change remain monetary affordability, rather than human survival.
At the same time as the excessively rich with money to burn fly to the edge of space, to create the next thrill to liven up their empty, boring lives, the government is ignoring its responsibility to drive change through its policies and spending decisions, which includes acting to restrain the irresponsible behaviour of the excessively wealthy, whose desire for pleasure come before planetary health.
It doesn’t have to be like this. There is an alternative that will protect future generations and create sustainable societies which would allow humans to flourish whilst respecting planetary and environmental boundaries.
There is still time to ‘take the road less travelled’ and move away from the maintenance of a damaging status quo. Knowing something about how the government spends could allow us to take that first step along the path.
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