‘What you do makes a difference, and you have to decide what kind of difference you want to make.’
Dr Jane Goodall, Scientist & Activist
This week, Sajid Javid, the recently appointed Secretary for Health and Social Care, promised a health shake-up to fight the ‘disease of disparity.’ He noted that ‘the poorer you are, the greater the proportion of your life is spent in ill-health’. He said that plans to level up would start with ‘redressing the imbalance in healthcare services’. A laudable objective. However, predictably, Javid failed to mention the role of the Conservative government in creating those disparities over the last 10 years. And, after the events of the last few weeks, we can surely disregard the oft-mentioned objective of ‘levelling up’ as yet more rhetoric and fine words which have no basis in reality. You couldn’t make it up!
Apart from the decade-long Conservative assault on our public and social infrastructure, the destructive reforms to social security benefits, and politically created regional disparities which have led to growing poverty and inequality, the reality is that the vote by MPs this week to increase National Insurance, added to the coming cut next month to the £20 a week uplift to Universal Credit, will further contribute to the ability of working people to provide for their families. The growth in food banks and homelessness, along with ill-health, both physical and mental, is a direct result of government neglect, borne of the toxic economic ideology which has driven policies and spending decisions, including those related to employment, which have kept wages low and jobs insecure. It is not a failure; it has been a deliberately pursued objective to withdraw from publicly funded and delivered provision, whilst at the same time pouring public money into private profit. A health shake-up cannot address those problems without dealing first with their roots, which lie directly at the door of the government. It’s putting the cart before the horse!
The level of disconnection between government ministers and those who will be affected by these decisions was demonstrated very clearly this week, when the Work and Pensions Secretary Therese Coffey claimed that claimants would only need to work two extra hours to make up for the loss of the UC uplift. Her assertion was shown to be incorrect because the taper system which applies to Universal Credit would mean that claimants would actually have to work an extra six hours to earn £20. As the MSP Elena Whitham said, ‘the Tories are totally out of touch with the reality of being in work and still in poverty. It is not just a matter of working 2 extra hours or getting a better job. That is akin to the old pull yourself up by the bootstraps mantra’. What has changed since Norman Tebbit’s speech in 1981 when he exhorted people to get on their bikes and look for work? The reality is that the jobs have to be there in order for people to get on their bikes to look for one (even if they could afford a bike). Without government intervention, in the form of adequate spending and full employment policies underpinned by a Job Guarantee, pulling yourself up by the bootstraps is a somewhat moot point.
It also came to light that the government had also failed to assess the impact of the £20 a week cut to the income of those affected, on the basis that it had only ever been a temporary measure during the pandemic. Never mind the fact that before the pandemic, people were struggling to get by on the punishing Universal Credit regime, whether in work or involuntarily out of work, and were relying on food bank charity to feed themselves and their families. It is, quite simply, just another example of the hands-off approach to government, passing responsibility onto those often least able to help themselves, not because they are to blame for their misfortune but because the government failed them.
A Guardian Editorial this week was clear:
‘The Resolution Foundation says that the government is embarking on the biggest overnight benefit cut in modern history, comparing it to the disastrous shrinking of unemployment support during the Great Depression in 1931. Without the uplift, the Joseph Rowntree Foundation notes, UC will not provide a decent standard of life for those experiencing hard times. Poverty ruins lives. Those that it does not ruin, it makes hard to enjoy. It is extraordinary, and appalling, that there are 4.2 million children living in poverty in a country as rich as the UK.’
Not a week goes by when further evidence of the dire consequences of government policies and spending decisions doesn’t come to light. The National Youth Agency, in a joint report with the YMCA, said this week that 1 in 4 youth centres were under threat of closure, as emergency funding for youth services comes to an end. It also noted that since 2010, youth services had been cut by 73%, annual spending had dropped by almost £1bn, and that 4,500 qualified youth workers had been lost from the frontline.
This comes at a time when, according to labour market figures published this week by the ONS, unemployment amongst the UK’s 16-24-year-olds is 8% higher than for May to July 2019.
Denise Hatton, the YMCA’s CEO, said:
‘This dire situation is only set to get worse before it gets better, as a dramatically increased need for provision is met with further budget cuts locally. Every decision not to invest in youth services right now, forces more and more youth centres into perilous situations.
Young people must be a priority and it is imperative that the government acts to prevent these missed opportunities for young people to get the support they need, and from which we all benefit as a society.’
Further, this week, a Mumsnet poll of 2,000 parents revealed that those with a household income of less than £20,000 have had to resort to extreme measures to make ends meet, while paying for childcare. It showed that:
- A total of 16 per cent have used a food bank, while 39 per cent have used credit cards or credit arrangements, rising to 48 per cent for parents receiving universal credit.
- A third (34 per cent) said they have cut back on essential items such as heating, essential food or clothing and housing costs.
Mumsnet Founder, Justine Roberts said:
‘These parents are at the sharp end of the UK’s extortionate childcare costs. They’re falling into debt, they’re using credit cards for essential food bills, they’re cutting back on food or using food banks.
‘For those few years while their children are pre-schoolers, and especially during the years where they don’t receive any of the “free” nursery hours, many of them are running on empty, financially speaking, and childcare costs are a big part of the problem.’
With the continuing prospect that government will not back down on the cut to Universal Credit, it is likely to push more families into poverty and out of the workforce. Mary-Ann Stephenson, director of the Women’s Budget Group said:
‘Too many women with more than one child find that childcare costs more than they earn. These women, and their children, are already being pushed into poverty by the cost, including considerable amounts of paperwork, are high, often leading to burnout and an early exit. There are also significant regional differences in the data, suggesting some levelling up is needed across the country.’
The term ‘levelling up’, which implies increased spending to address the roots of poverty and inequality, has yet to match any sort of reality, despite the promises. The macroeconomic reality is that such a levelling up cannot be achieved whilst the Chancellor continues his addiction, for whatever reason, to the notion of fiscal discipline. The two positions are mutually exclusive. In the meantime, our public and social infrastructure continues to decay, and the government, through its policies and spending decisions, persists in showing scant regard for the lives of its citizens. The increase in NI and the cut to Universal Credit is the clear indication that it is not on the side of working people, and that it intends to make their lives even more difficult than hitherto, whilst also showing a level of macroeconomic ignorance that is lamentable (if that is what it is).
In work or involuntarily unemployed people should not have to live hand to mouth or exist in a permanent state of anxiety about how they will manage. As noted in a previous Lens blog, on the one hand, we have Rishi Sunak who leads a life of luxury and has never had to worry about whether he has enough to survive on, imposing a cruel and macroeconomically unsound cut to Universal Credit. And on the other, we have Boris Johnson’s preference for people to see their wages rise through their efforts, rather than through the ‘taxation of other people put into their pay packets’, thus seeking yet again to divide people with the lie of shirkers depending on tax fuelled benefits. He promotes a notion of self-reliance by suggesting that working people have control over their lives and earnings (as Therese Coffey did this week) when the reality is that the government has made a political choice to maintain an exploitative model, which keeps wages low and jobs insecure for the benefit of a profit-based, business model.
Johnson, and his colleagues, prefer the neoliberal blame and division game, which ignores the role of government with its currency-issuing powers to put in place the mechanisms to ensure full employment, a real living wage and good terms and conditions, as well as provide the vital public and social infrastructure which underpins a healthy economy.
Who could argue, either on the right or the left, that such a macroeconomically sound strategy would not serve the needs of both working people and businesses, unlike that of fiscal belt-tightening, the consequences of which even prior to the pandemic were clearly evident in the state of the economy? Instead, we have a situation where greed for profit trumps economic sense and leads into an ever downwards spiral of poverty and inequality, in the midst of the creation of excessive wealth and disproportionate access to real resources.
The reality is that, like nature, which is a complex network of inter-dependency, so is a properly functioning society which should be underpinned by a government that puts human and planetary health at the top of its agenda, not balanced budgets, or the endorsement of an economic ideology that promotes the individual over a sense of collective responsibility and enriches the few.
On a final news note, it was concerning to learn that US Congressional investigators have revealed that, ahead of a hearing next month to question heads of oil companies about their history of undermining the evidence that burning fossil fuels were driving global warming, they have uncovered ‘very concerning’ documents regarding Exxon Mobil’s disinformation campaign to discredit climate science. It could be said, that in terms of rising carbon emissions and their effects on the climate, the horse bolted from the stable decades ago, and it’s a bit late in the day for politicians to be waking up to the duplicity of those polluters. It is also surprising because it is not as if these issues had not come to light previously through the work of environmental campaigning organisations such as Greenpeace, which published a review of Exxon’s knowledge and subsequent denial of climate change.
However, late as whatever these revelations may be, what should come out of this hearing surely is that there is a need to question the power of the corporate body to lobby politicians and influence the public, which is continuing just the same today, only now it has another name, greenwashing. The fossil fuel industry is aiming with its usual propagandised deceit, to persuade the public that we still have plenty of time, and that technology will be our saviour. This is the status quo writ large for the benefit of the oil industry and other global corporations.
This should be of serious concern in the light of the work of researchers who revealed this week that despite being on ‘Code Red’, countries are making ‘sobering’ progress towards meeting climate targets. The organisation Climate Action Tracker reported that only one country, the Gambia, is currently doing enough to meet the targets agreed under the Paris Agreement and added that while the UK’s domestic target is 1.5°C compatible, it doesn’t yet have the policies and international support to make those targets a reality.
Well, is anyone surprised? We have the plans, but like the Wizard of Oz’s curtain, there is nothing behind them. Words need to be translated into action if we are to make any progress at all. With the COP 26 conference just around the corner, government promises, already on shaky ground, are likely to be further exposed as the hot air they are.
Whether we are talking about the vast inequalities that exist globally, as a result of the political obsession with neoliberal ideology, or the effects of that same ideology on the planet which is currently experiencing apocalyptic visions of fire and flood, and destruction of land and oceans, to keep endless growth on track, and more profits rolling in at whatever or whoever’s expense, the imperative for change is bearing down upon us with increasing urgency. As Peter Kalmus wrote in the Guardian this week, imploring political leaders to forget what he views as the deadly procrastination of plans to lower emissions by 2050, ‘It’s time to grow up and let go of the fantasy that we can get out of this without big changes that affect our lives.
While politicians, economists and think tanks continue to frame spending in household budget terms, or claim that over an economic cycle, balanced budgets are a vital component of economic health, we can make no progress towards addressing poverty and inequality or delivering the vital green agenda that will ensure a viable future for our young people.
Furthermore, while many on the left continue to accept and promote the ‘tax pays for spending’ narrative, arguing for wealth taxes to raise money to deliver public programmes, they will reinforce in the public mind the idea that we are dependent on the wealthy, when we are not. The only constraints faced by the government are not financial. They relate to those of real resources and how they are shared equitably throughout the population.
In this respect, after a week and more of left-wing MPs promoting wealth taxes to pay for social care, it was refreshing to hear the Labour MP Clive Lewis comment the following on the Politics Live show:
‘If you can find £37bn for shareholders of Serco, you can find £66bn for some of the most vulnerable people in our society, it’s as simple as that, and our government is making a political, not an economic choice.
We owe that money to ourselves. We owe it to the Bank of England [who] have given an IOU to the Treasury. [We] are the sovereign owners of the Bank of England. You are taking money out of the economy at a time when it is getting back on its feet’.
This is a step forward, and not only challenges the notion that taxes fund spending, or that government needs to borrow from the private sector, but also makes clear the macroeconomic consequences of raising NI or removing the UC uplift. It is a political choice, as Lewis says!
As Stephanie Kelton noted in her recent TED talk, explaining the role of deficits, ‘Their red ink is our black ink’. Far from deficits being a burden on the nation, they represent the money circulating in the economy, and our savings. Their size is directly related to the prevailing economic conditions or challenges being faced, and the government’s response. Taking money out of the economy at such a time of economic uncertainty will hurt those that can least afford it, and in no way will it increase the government’s capacity to spend. Once the tax obligation is extinguished, contrary to common understanding, it plays no further role in government spending.
However, that said, at a time of climate breakdown we must also consider that it is now vital to re-evaluate our priorities and rethink the dominance of wealth and power in the political decision-making processes that will determine what happens next.
Can the planet afford to allow those with excessive wealth and privilege to continue to burn up the planet’s resources, whether it’s pleasure trips into space or sending a manned rocket to Mars, when we should be addressing the climate emergency here on Earth, and putting in place a global strategy for a Just Green transition? That is the real role of taxes. Not just to create equity, but also to release the real resources that will be needed to drive forward a truly green and equity-based agenda.
As the economic anthropologist Jason Hickel tweeted this week:
‘Societies that tolerate rich elites are forced to devote a tremendous quantity of resources and energy (and labour) to servicing elite consumption. In an era of ecological breakdown, we have to decide whether this is something we are willing to accept.’
Join our mailing list
If you would like GIMMS to let you know about news and events, please click to sign up here
Support us
The Gower Initiative for Money Studies is run by volunteers and relies on donations to continue its work. If you would like to donate, please see our donations page here