Monday, April 1, 2013

"There is no money". And Other Lies.

When the newly appointed Chief Secretary to the Treasury, David Laws, got into the office for his first day at work, in May 2010, it's said that he opened a letter sitting on his desk from his predecessor, Liam Byrne. The letter contained just one sentence. "I am afraid there is no money", it said.

The rest, as they are going to be saying - especially after this week, is history. A moribund economy, that the coalition government continues to insist was pretty much dead on arrival when it took office, refuses to recover. The scale of the cuts announced as the government got into its stride defied belief - we could have once joked that they were dealing in telephone numbers, except that these numbers are bigger, much bigger than that.

And thinking of that history when it is written, the government will no doubt be hoping for a certain narrative. One that is truly, perniciously, in the spirit of Margaret Thatcher. That there was no alternative. That the medicine was unpleasant but that it had to be swallowed - but only by some. That the use of tax policy to bring real funds from the wealthy was simply not an option - as it hasn't been since the Conservative party taught the middle classes that they weren't actually well off, making selfishness a virtue, and fatally wounding a key idea of post war 'society'. (New Labour - eyes bulging from the bubble that they inherited and still in awe of a Conservative Prime Minister who beat them for three elections in a row - of course failed to reinstate that idea.) The narrative, they will be hoping in Downing Street, will end with Britain bravely fighting through. And let's not talk about the human cost.

For a lot of other people the story is going to read rather differently of course. They'd be forgiven for thinking they've been unexpectedly cast in a real life, social version of 'Oh What a Lovely War'. Behind the lines of their lives, their political masters have been throwing them like cannon fodder into the trenches of economic carnage-without-end, because like the Generals of World War One, they have no Plan B. The casualty list is already pretty gruesome, but it's about to get much worse indeed.

Because this week the whistles blow for a new offensive, the biggest yet, as 660,000 of the poorest people in Britain are going to give the government on average £728 each per year as they lose housing benefit if they have a 'spare' bedroom. This includes people who need round the clock care, and families with disabled children - neither of these groups have gained automatic exemption from these measures. In fact the government is in court fighting a claim by ten disabled children that their basic human rights are being infringed. And even for others who are not facing these particular problems, the cut in benefit is cruel because their ability to respond to it by moving into smaller properties (taking their children out of schools, losing jobs, adding to travel costs...none of these factors make any difference) is often limited. The properties aren't there, or if they are the reality of  councils making it all happen could take years.

Meanwhile, on another part of the front, legal aid is being withdrawn from many of the less well off, essentially destroying access to the legal system for thousands. Along with that, Disability Living Allowance is going, replaced by Personal Independence Allowance, a reduced and less accessible benefit that now takes six months to qualify for rather than three. And welfare benefits and tax credits become pegged to 1% increases from April 8th, no longer rising with inflation - for the first time ever. By 2015-16, the poorest of Britain will be giving the government £2.3 billion from this last measure alone.

But, hey, there's some good news too.

The wealthiest next week see the removal of the 50p top rate of Income tax.

In fact, things are looking pretty good back at Battalion Headquarters. The 1000 wealthiest people in Britain are now worth £414 billion. Their wealth grew in 2011-2012 by 4.7% - which is £18.6 billion. By any calculation you can make, £18.6 billion dwarfs any extra revenue coming the government's way through the savings it wishes to make in measures beginning next week. It could certainly pay pretty much the entire bill for savings that's been sent to the NHS.
It's not a new phenomenon. The rich, and the most rich at that, have been getting substantially richer for years. 40% of all increases in income in the last ten years has gone into the bank accounts of the wealthiest 10%. And there is no sign that the recession has put the slightest damper on that party.

Meanwhile the economic status of our poorest 10% has collapsed.

So where does this leave us?

The broken record of Thatcher/Reagonomics which came to infect this country's view of itself - like hidden words through a stick of economic rock - would have it that any adjustment of the model is almost akin to suggesting the middle classes should all have their glasses smashed and be made to go and work in the fields, a la Mao or Pol Pot.

That there in no other way is of course, disingenuous rubbish. A tale created to frighten the middle class into never ever again questioning the validity of an economic policy that over the last twenty years has dropped more and more people out of society, and allowed some others to accrue wealth that might even have drawn a few impressed nods at the court of Louis XIV.

"There's no more money" said Liam Byrne's letter. Yes there is. Plenty of it. That £414 billion for a start - that makes these people collectively worth more than Belgium, or Sweden, or even Switzerland, for God's sake. Plus all the extra profit that's been made in just the year since that figure was reported. Let's have a bit of that. Just a bit.

Plus of course the vast sums controlled by the hugely wealthy who couldn't quite scrape together the £72 million to make it onto the top 1000. And don't get me started on the £45-£100 billion that it is estimated major companies are avoiding by failing to pay Corporation tax.

But there's a bigger, deeper question here too.

We have swallowed the lie of No Other Way so completely that barely anyone in politics questions it anymore - testament to a culture in which we have lost all real sense of social obligation and are losing our cohesion. Summer greed riots in our cities is one symptom, the growing number of people living rough on our streets (up a third in two years according to Crisis) another. The idea of being part of a nation to which we all actually belong, and in which we all have worth, was first really assassinated by Thatcher in her 'no such thing as society speech' in 1987 and the mood music hasn't changed much since then (despite occasional glimpses of what we might be, such as the one organised last year in Stratford to Danny Boyle's choreography). These days suggesting that the better off should contribute more - a fair share - for the overall good of the nation, and that they might want to because it is the moral and responsible thing to do is regarded as politically laughable.

Until this changes, nothing does.

We are left with a nation in which the most wealthy pay a smaller proportion of their income in tax than the poorest (35% for the top 10%, 39% for the bottom 10%). A situation where married carers who need a spare room to sleep in as their disabled spouse requires a room of his or her own, are penalised benefit by politicians who spend on a lunch what that couple are given each week in benefit. Where child custody disputes will remain unheard by the courts, causing misery, because legal fees can't be met. Where Shelter reports that child homelessness is at record levels, and Job Centres are starting to send people to Food Banks. And it's all going to get worse, and worse.

"Greed" said Gordon Gecko, in the 1987 movie 'Wall Street', "is good". We thought it was an ironic comment on self serving bankers. It wasn't, of course - as Rich Ricci of Barclays pockets an £18 million bonus twenty five years later and stories of unchecked malpractice from the banks continue to pour forth, we must realise that it became for many of us a cultural philosophy, so embedded in the political psyche of this country that - like the fish that is unconscious of the water in which it swims - we lost our awareness of what it has done to us.

There is money, Mr Laws. And we need to remember why we all need to share more of it around.

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