Thursday, 23 July 2015

Suffer the Children

You wake up this morning as Chancellor of the Exchequer. Your dream - to "balance the books" by filling a £12 billion gap between Government spend and Government income.

You have a choice, Chancellor.

Take £12 billion out of welfare? The impact assessment by your civil servants says that will hit 330,000 children from low income families.

Or put £12 billion onto taxes?

If you decide, Chancellor, to use progressive taxation to fill the £12 billion gap, you might start by boosting the taxes of high income households. There are 2.7m households in the UK in the top decile for household income - with average annual earnings per household of £102,366. With two taxpayers per household, that is £51,183 per person. These folk pay the higher tax rate, 40%, on all income over £31,786.

That 40% tax on those households currently raises £41.4 billion (see "Maths" below).

Raise that tax to 52% (on all income over £31,786) and you raise £12.4 billion, and balance your books.

There is your choice, Chancellor.

Suffer the children? Or ask the wealthiest 10% to pay a wee bit more in tax?

That is the choice Scotland will face at the next Holyrood election. If we want better welfare provision, we're going to have to pay for it. 

I'd vote for a Scotland that stopped the suffering of children, and started taxing for a fairer society.

The Maths:

Calculation  Top Decile 
Households in the top decile by income                              2,670,000
Average household income  £                             102,366
Number of tax payers per household 2
Average income, per person  £                               51,183
Pay 40% on income over  £                               31,786
Pay 40% on  £                               19,397
Which is, per person  £                                  7,759
Totalling, all taxpayers  £               41,431,992,000
Funding Gap  £               12,000,000,000
So percentage increase in tax taken, to meet £12bn funding gap: 29.0%
That % increase on 40% 11.6%
So, raise the 40% rate to: 51.6%
Let's call that 52%, which is payable on  £                               19,397
Which is  £                               10,086
Totalling, all taxpayers  £               53,861,589,600
Which raises an extra  £               12,429,597,600

In practice, of course, the 40% rate applies to many more people. It would also apply to most of the people - another 2.6m households - in the ninth decile, so the £12 billion would be shared amongst more people. A tax rise from 40% to 47.5% would probably do it.

Wednesday, 22 July 2015

European Bounty

What are we to make of Europe? What has happened to the idea that Europe, the EU, would help us construct a fairer society, one in which absolute poverty and exaggerated wealth would disappear?

Europe has, or has had, a model that used progressive taxation to pay for a broadly inclusive health service, free education, rights for women, workers and minorities, and more or less functioning democracies. These were common characteristics of a common market. They saved many from the levels of poverty seen in the paragon of free markets, the USA. They also saved us from wars (in which, as in all wars, the poor foot soldiers suffer most.)

And then came Grexit. A poor country that had been loaned billions on easy terms by the banks, the IMF and member states. Easy terms that did not include, as perhaps they ought, a requirement that Greece strengthen her institutions and, specifically, her capacity to gather taxes. The markets, followed by the bankers of Frankfurt, lost confidence in Greece. The Troika swooped and austerity, the only paradigm in town, was imposed.

In the shadow of the Troika, the questions at the top of this article have started to gnaw at the hearts of people on the left. Janan Ganesh in yesterday's FT described "the left's wrath at Brussels (and Berlin)". Zara Kitson, candidate for the Scottish Green Party in an excellent article in last week's The National wrote about "...the Troika bullies [as] representatives of the neoliberal status quo." "...the vision of the EU as a beacon of peace and reconciliation, democracy and human rights [is] now under threat of being hijacked for good by free market fanatics." Zara called for the people of Europe to "...stand up for an alternative European defeat austerity and xenophobia, and to promote peace and sustainability, whilst pushing to make the Europe of our intentions become the Europe we're a part of."

Raül Romeva is the lead candidate for Junts pel Sí, the single candidature that is planning to stand in September's elections for the Generalitat, the Catalan parliament. The group is pro-independence, or at least pro- the right to chose independence for Catalonia. Last year he published* "We Are a European Nation (and a tricky dossier)," a collection of essays on Catalonia and the EU. He is a highly qualified commentator, having been an MEP 2004-14 and supervisor of elections in Bosnia and Herzegovina for the Organization for Security and Cooperation in Europe in 1996 and 1997.

In Raül's view the "...current 'EUreality' is a union, but only of states. Peoples and people have become a secondary issue." The debate about Europe has become yes-no , in-out "...while we have forgotten other equally important [variables]...the nuances, the 'how', the 'why' and above all the 'for what'." He argues that we need the power of a Europe that works together if we are to meet the superpowers like the US and China, or the more insidious powers of the mega global corporations. And, drawing a line between Scotland and Catalonia, he argues with Zygmunt Bauman that the European Union or a future Federation of European States offers the best guarantee that the identities of small nations will be protected.

For Raül, the challenge we are facing is ideological, not economic; "...crude neoliberalism is now not only found in the boardrooms of the leading economic and financial entities. It has made itself soul and master of the groups that are directing the main European institutions whether they be in Brussels or the main capital cities."

Like Zara's "stand defeat austerity", Raül calls for a people's mutiny. A peaceful, democratic mutiny to take control of the European ship of state.

Europe links Catalonia, Scotland and poverty. The existence of the European Union as a powerful binding force allows small nations to evolve safely into states (we don't have to create states out of wars in the old way.) Europe, with its protective human rights, workplace and environmental legislation (yes, yes there is not enough of any of it) at least limits the scope of poverty. And the European model, the one that the Troika appeared to break, is the model that limits the greed of wealth and salves the wounds of poverty.

That Europe, the caring, sharing Europe, the Europe in which Scotland and Catalonia could be independent, is worth fighting for.

Time for a mutiny.

Romeva, Raül. Som Una Nació Europea: (i Una Carpeta Incòmoda): Catalunya Vista Des d’Europa. 1. ed. Barcelona: Rosa dels Vents, 2014.

Tuesday, 21 July 2015

May London Flourish

The City of London is a building site. Walking through its courts and its lanes means navigating scaffolding, concrete blocks and cement lorries. Wobbling to work on their high heels and pencil skirts or their brogues and pinstripes, City staff divert from pavement to pavement to avoid the construction sites.

London is booming, and not just in new buildings. House prices are up (did they ever fall?) along with the salaries of its bankers, lawyers and investment managers. It is the centre for research and development, for arts and culture, for earning and spending, for broadcasting and education. London is a global mega-city, a Tokyo on the Thames.

For Scotland, London is the big business opportunity. A few hours away by train, speaking the same language (or something like it), and with a rampant consumer culture for the speciality foods that Scotland produces, London is open for business. Scottish firms are selling everything from architecture to whisky to the London market.

Long may London, the global mega-city, flourish.

London's governance - à la Boris Johnson - is about letting the free market rip along, with only the tiny inconvenience of the Congestion Charge. It is laissez-faire governance,  neoliberalism. The priorities of a global mega-city are cast in the same mould; yes, let's pack a new runway into the world's busiest airport to make it even busier (to hell with the Green Belt).

Neoliberalism is the philosophy of the global mega-city, competing for favoured investments amongst the banks and finance houses of the world. New York? Tokyo? Rio? Sydney? Nah, let's go to London. They will let us pay taxes in the Netherlands Antilles while we work in Blackfriars. London needs neoliberalism or it will be overtaken, God forfend, by Frankfurt or Geneva. London is a vortex, a Death Eater that sucks the wealth, and the spirit, from everything around it.

Westminster is in London, and Westminster shares London's dominant political philosophy, the economic neoliberalism that is the accepted paradigm of Tories, Labour and Liberals.

But the governance required for a global mega-city is very, very different from that required for the hills, glens, lochs (and cities) of Scotland. The people of Scotland - not just in the last General Election but for years before - have shown that they want other values to predominate. The people of Scotland have consistently voted for parties that propose a different model of society, one which cares for its people, which pays for the education of its young people, which helps its old-folk.

Which is why Scotland needs its own Government. We simply cannot have that fascinating, greedy, consumptive neoliberal culture imposed on us any longer. We need out, now. Because the longer we stay glued to Osbameron's nasty neoliberalism, the poorer, weaker, sicker we will get.

It is time. We must now grow our own Flower of Scotland. And may London (and its parish parliament in Westminster) flourish.

Saturday, 11 July 2015

Border Post

We just drove over the border between the two Irelands. Driving, we left the North at 70mph, and speeded up fractionally to the 120kph limit in the Republic.

As we raced south I remembered the Telegraph report, organised presumably by Project Fear, that claimed that a Yes vote would mean soldiers patrolling the frontier with England and passport control on the border. It was, like all of Project Fear, a huge fabrication. The reality would have been what we experienced in Ireland: a border that is a nothing, just like the border we drive over between Catalonia and France, or the train I took a few weeks ago from Luxembourg to France.

Scotland and England could have a border like this - a drive-through paperless border for cars and trains. The border we need is a different one; a border between the despair and abandon of England and a positive, caring, inclusive, fair Scotland.

Monday, 6 July 2015

Poverty Costs

What happens when you abandon people to poverty?

The British Isles have been a living laboratory for this experiment, led by Margaret Thatcher and Sir Keith Joseph, continued by Tony Blair and culminating in the experiments on welfare by Dr Giddy Osborne. 

These experiments follow the same pattern: For a few years the low wages allow business to boom, so GDP rises and the media tell us we are getting wealthier. This is an illusion brought about by the myopic view of economic commentators who focus on the numbers and forget the people. In the real world people are getting poorer. 

By abandoning hundreds of thousands to poverty Governments reduce their tax take and thus have less to spend on education, health and welfare, the three public services that help to level out society.

And then one day someone wakes up and says OXI - "No; we have had enough of austerity for the many, and wealth for the few."

In Greece, ΣΥΡΙΖΑ ( Syriza ) was able to channel that anger into a majority for No. In other places in Europe - the banlieue of Paris for example - that anger manifests in other ways, with young men and women heading off to support Daish. Daish is the nihilist response to poverty, the negative counterpart to Greece's positive No.

The cost of poverty is thus not only the suffering, unhappiness, pain, poor educational achievement and an early death. Nor is it limited to the deaths and suffering caused when poor young men kill journalists in Paris. It is also €3.5 billion written off from the EU's economy, and a future €60 billion burned out of the world economy.

When will our politicians wake up to poverty? 

How many billions do we have to burn ("write off") before politicians realise that austerity creates poverty, and that poverty costs.