The past few days have been exceedingly depressing. The media has seemingly done the coalition’s job for it and taken their side hook, line and sinker.
The media’s thirst for the sensational has now had the drip, drip, drip affect into the public’s conscience. Lets forget about why people were marching look there are people with balaclava’s on. “Oh those nasty anarchists” the BBC and SKY news pundits cry.
The newspapers all lead with the violence except for the Guardian who put it into it’s proper perspective. Even the independent went down the classic editors route of putting burning flames on the cover to sell more copies. All quite pathetic.
Half a million protesters, a carnival atmosphere, working class, middle class, upper class – marching together with their families through the streets of London to show the government the masses disapproval. What do we get at the end of it?? The Home Secretary Theresa May saying they are looking into banning face masks. How ridiculous.
The media has to take a massive hit here, not in blaming the messanger, but in massively creating a story far larger than it warrantied ahead of the real main story.
I have never seen so many column inches and television broadcasts over a few hundred idiots who decided to cause trouble over half a million – yes I will say that again HALF A MILLION people demonstrating against a regime of economics that could plunge our country into despair.
I have no problem in the media covering the violence, just on the amplification ahead of what was a peaceful and dramatic expression of ordinary hard working peoples will in our country.
As for Theresa May, whatever next? Lets just ban all demonstrations that should sort out the problem. Lets stop people from wearing a scarf in winter, or the Burqa, all these nasty people, just so sinister.
What we should be concentrating on is not the head dress worn by a few idiots but the policies being inflicted on the country.
UK uncut have done many things that are excellent in bringing awareness to the hypocrisy of corporations and Bankers, and their occupations of some buildings turning them into useful public areas has been excellent to see. This is thoughtful and off the wall direct action that adds to the mix.
Smashing a few windows and bringing objects to throw at the police and causing violence is ridiculous and splits the public. The 2 things are not the same and the idiots who use these tactics only serve to do what they always do and that is split the left, or turn a sizeable section of the masses against the demonstrators.
This couldn’t have been hijacked any better if David Cameron had hired a bunch of hooligans to discredit the no to cuts campaign.
The media need to take a large proportion of the blame for this, but so do the small amount of people who left their brains behind on Saturday.
What a day, Up to half a million people marching through the capital on a sunny spring day. Men. women and children of all classes, races and backgrounds marching against the cuts but more importantly FOR an alternative.
The day went brilliantly with a carnival atmosphere and far more people than were anticipated either by the unions or the Police.
The numbers as ever are disputed as to exactly how many were marching. It was initially reported 100,000 were marching, this based on TUC estimated numbers who would turn up. This went up to around 250,000 by 2pm. In the evening the BBC reported half a million marching through London, but by the late night news this had returned to the 250,000 + figure and the Police “would not comment”.
So why were they marching?? The following videos give just a brief window on how the cuts will affect our society.
The news coverage was interesting to see. The Miliband speech was shown for some of the time by the BBC on a split screen showing a balaclava clad group who had split from the main demonstration intent on causing trouble. Not quite what Mr Miliband would have liked!
The very sad but inevitable consequence of the media coverage was the over emphasis on the break away group some of whom (in their tens) caused trouble trying to commit violence.
I noticed on Twitter the usual suspects pouncing on the sight of people in balaclava’s and trying to smear the entire demonstration, notably the fairly despicable Tim Montgomerie. Last week trying to gain political capital out of the Libyan conflict and today trying to discredit half a million peaceful and concerned protesters fighting for their own communities.
Nevertheless, the majority of the coverage was on the good natured aspect of the demonstration.
The right wing and coalition commentators in the media were trying to portray this as a fringe extreme movement of unions. The stereotypical way in which the coalition sees our society is quite bizare. Unions who are democratic organisations, representing ordinary (hard working) individuals who would be classed as the ever talked about hard working families in political speak.
Of course far fewer of them will be “hard working”, when they have been made unemployed. Many of course were anything but union members. Whole families of people from students to pensioners marched to show their discontent with the status quo of politics and the lack of fairness in our society.
The whole of our “Big” society is being attacked by the short term interests of a few while being cloaked in the faltering BIG SOCIETY by FLASHMAN DAVE.
Ed Miliband finally decided to speak at the demonstration. Sadly, he does not represent the “alternative”. As yet the Labour party does not have a coherent alternative to the failures of the past, clinging on to the old economic orthodoxy that got us into this mess.
The real message from today’s overwhelming showing of support for an alternative is that any government who simply dismisses the concerns of the public will be dealt a dramatic blow at the ballot box.
This is one alternative put forward:
The Blair administration did not realise what happens if you ignore the masses. The 1 million that turned out against the Iraq war were resoundingly ignored not by one party but by Parliament. The coalition risk major political fallout if they ignore another mass show of discontent with a path taken by the government.
Labour lost 4 million votes on the back of the disaster that was Iraq. This coalition cannot afford to lose even half that.
To ignore the masses would be folly but I believe that is exactly what the coalition will do. They have chosen a course, both LibDems and Conservatives, together the CONDEMS will pursue an agenda with the overriding objective to get to the next general election in tact and hope for an economic recovery. At the expense of the many while the few get away with tax avoidance, squireling away money to UK encouraged tax havens and Banks carry on business as usual.
I heard a Tory commentator today stating that this is an unusual situation and they have “no choice” but to enact the cuts as described so that in future we do not have to cut public services again in the future. The strange thing is that every time the conservative party get into power they always do the same thing.
In the early 80’s they blamed Labour, in the 1990’s they did it again while still talking about the “winter of discontent”!, which is why they so resoundingly wiped out at bthe election in 1997. They couldn’t blame Labour that time.
Now they are doing it again. The agenda is always the same, mass privatisations and public service cuts while demonising sectors of society. Is this a trend or am I just believing this evil deficit denying lefty rhetoric??
The course is set and it is one we have seen many times before over the past 30 years. Lets hope that communities that exist today still do so after the next 4 years, unlike in the 1980’s.
This was billed as the budget for growth. What we ended up with was the usual intentions made, the slagging off of the last labour government and a not so unexpected surprise (fuel tax cut). In short ANOTHER damp squib.
Not so much a budget for growth then.
The usual right wing promises to give money back to large corporations in the future and to get rid of the 50 pence tax rate, as well the harking back to the 80’s with enterprise zones was the order of the day.
No doubt many will welcome the well trailed cut in fuel duty (putting fuel in the tank of the British economy??), but this is small consolation to many. It is pretty clear that the chancellor had little room for manoeuvre and billing it as a budget for growth was never going to materialise. There will be those very upset with the tax on private jets (I’m not one of them!), and there was a welcome lifting of the personal tax allowances which is one of the few LibDem policies that has made it through to the coalition intact and that many will be signed up to.
The course has been set for the next 2 years and the government will be battening down the hatches to deal with the strife that will no doubt come as all the tax rises and job losses hit our society.
Oil has risen 35% in the last 5 months which is having a dramatic affect on food prices and world commodity markets. All pretty much outside of the chancellor’s control. This is having a further effect on the cost of living and the feeling of many in society beleaguered by rising costs of living and the declining standard of living.
The fact that the Office for Budget Responsibility continually decreases the growth forecast can give little confidence in the chancellor’s plans or forecasts.
The truth about the British fiscal crisis is more to do with the lack of growth and thus tax receipts than it is about massive public sector cuts, yet the chancellor has rooted his success firmly on the latter rather than the former. See previous posts on The Truth about the UK deficit and The Truth about the UK Deficit Part II.
It is clear from the indications in the budget speech from George Osborne that the “squeezed middle” will have to endure the next few years with promises of sweeteners just before the next election.
Some will bill this budget as a “prudent” budget without politics. However, this budget has everything to do with the politics of the long game. Trouble now, with massive public sector cuts. Hope for the best on growth and then give away money before the next election, with most of these to their friends in corporations and big business.
Lets hope he is a lucky chancellor, because if this was a budget for growth I would hate to see one for stagnation.
Over the past few days economic news has filtered through which puts further doubt on the way the Coalition, George Osborne and David Cameron are portraying the deficit problem.
What choices should we take to deal with the deficit?
As explained in a previous post “The Truth About The Deficit” available at https://extranea.wordpress.com/2011/02/08/the-truth-about-the-uk-deficit/ the deficit has not occurred due to enormous out of control public spending by the previous Labour government. Rather it has occurred due to the credit crunch and resultant recession reducing the tax revenue.
This has been caused by a variety of factors including the deregulation of the US banking system in 1999; economic orthodoxy over the past 30 years; light touch regulation; irresponsible banking operations; banks lending to people that could not afford to repay their loans and the spread of risk through the market in derivatives.
News has now filtered through that the taxman has been able to collect an extra £3.6 billion in tax than expected n the month of January. This means that there is a likely hood now that the chancellor will have an extra £8 billion tax revenue at the time of his budget in March.
This does not mean that we are not still borrowing large amounts of money above the amount the chancellor is collecting in taxes, but that the amount of the overspend will be less, meaning the deficit is reducing.
Some commentators on the right wing of the political argument are getting very nervous about this. Those like Fraser Nelson (see http://bit.ly/fgpz7a) are worried that the chancellor may “give” away this money by not cutting public expenditure so quickly, or spending this extra revenue to save projects like the Big Society.
The reason why Fraser Nelson and others on the right are so worried is because they should be. What this example of the increase in tax collected shows is just how the deficit in the end will be dealt with. It will be dealt with by increasing the tax take, and the growth of the economy. As soon as the tax take increases the complexion of the deficit looks very different.
The right wishes to massively reduce the role of the state and public spending as an ideological course of action, as their right to pursue now they have what they regard as a Conservative government.
However, we need to look at the argument for the steep cuts in public expenditure. The argument is put forward that public spending is out of control and that is why there is the deficit and therefore we should reduce this to control the deficit and “save” the economy. In truth however, although it will certainly help to reduce public spending and the deficit in this way, the only way that the deficit will really be dealt with is through growth.
Our whole economic ethos in a capitalist society, whether we believe in a social democratic capitalist tradition like in Europe or a liberal economic position as in the USA, we rely on the growth model in order to provide for our nation. Without growth in our economic model we cannot increase our standard of living and become wealthier as an economy or society.
If we are to continue this tradition (and there is no sign in mainstream economic and political thought that this will not be the case) then the only way the deficit will be dealt with is to encourage growth. Growth in the economy will increase the amount of tax the chancellor will collect. This will allow the chancellor to reduce the amount borrowed by the nation and finally balance the books and reduce the deficit to zero over time.
In addition, as the economy grows, inflationary pressure will begin to build which will also aid in reducing the relative impact of the deficit providing the inflation does not begin to spiral out of control.
What these recent taxation figures show is that, a small monthly increase in the tax take can rapidly increase the affordability of public services and make the chancellor’s job a lot easier.
The right wing are scared that this will reduce the ideological zeal for cuts and the wholesale privatisation of public services. The truth is that the extent and depth of the cuts is a matter of political choice. Some cuts are required, and it is sensible to have a re-balancing of public finances when money has been easier to come by. Some inefficiencies will have been built into procedures and there is no doubt some in the public services are paid too much. But this comes down to efficiencies and not necessarily deep cuts in services. This is what the nation was told would happen before the election, yet in reality we see few efficiency savings, and a lot of cuts to front line services.
We have also heard today that not only did the UK’s economy shrink in the final quarter of 2010, but that it shrank further than we originally thought. So even taking into account George Osborne’s bad weather excuse, the economy did not just flat line but shrink. (See http://www.bbc.co.uk/news/business-12577154, GDP reduced by 0.6%)
This makes the danger of deep cuts in public services even more dangerous. If deep cuts and the reduction of employment opportunities persist it will suck money out of the economy in a deflationary effect, limiting growth still further.
Growth of the economy will lead to a larger tax take and smaller deficit, negative growth or sluggish growth will lead to a smaller tax take and higher welfare costs making the deficit worse.
Taxation Changes and Avoidance
In addition to the growth question, there is also other political choices that have been made. It is now calculated that at least £13bn of tax is avoided by corporations and big business using tax loopholes and tax havens to avoid paying corporation tax.
George Osborne is now trying to make this easier with tax changes that have almost gone under the radar, so few people know about it. See George Monbiot’s article http://www.monbiot.com/2011/02/07/a-corporate-coup-detat/ and a discussion on Newsnight see below
In this way the chancellor could collect even less tax and it will be ordinary tax payers and small/medium sized businesses that will share the extra burden.
The official corporation tax rate is constantly being reduced by British chancellors and George Osborne is no exception, trying to reduce it to 24% by the end of the Parliament. This will mean the UK has the 3rd lowest corporation tax of the G20 countries. Yet the biggest and 3rd biggest economies in the world have the highest corporation tax in the G20, namely the USA and Japan.
So should the reduction of corporation tax be a political priority anyway? Is it more important to give tax breaks and lower tax rates to large companies when large cuts are being asked for?
Is it also right to encourage tax havens when they are a known source of illegal money? Is this the right course to take when We Are All In This Together, or is the accepted wisdom now, Some Of Us Are In It More Than Others!
Conclusion
There is a choice to be made, it is not being a deficit denier to point these things out, but the realisation that we have a real choice to be made, and not all cuts are inevitable or desirable both for the economy or society.
Lets repudiate the ideology, and have pragmatism in the face of difficult economic times. There is a choice to be made, and I fear our government is making the wrong choices for the wrong reasons.
Bob Diamond has said that the period for “remorse and apology” for the Banks is over. George Osborne has stated that we can now “draw a line” under the Bankers and move on. But today even Adam Smith is being used against the greed of the Bankers as Banks are being seen as a “conspiracy against the public”.
The whole country is at a crossroads. The coalition government is entering a time of extreme austerity to deal with the deficit. A deficit that got out of control, not due to an over spend by an evil Marxist Labour government but due to an economic orthodoxy followed for 30 years by the right and the left in politics. This was encouraged directly by financial institutions leading to a credit crunch, recession and a slump in tax revenue. (see https://extranea.wordpress.com/2011/02/08/the-truth-about-the-uk-deficit/ )
Those on the right wing and in government call those protesting about the savagery of the cuts as DEFICIT DENIERS. No one is allowed to discuss and protest on behalf of those that will suffer like the disabled; mentally ill; the poor; the elderly; communities; NHS and nearly a million unemployed youths.
Politicians love labels and pithy political statements to caricature an argument and to demonise a group of people so that the public will not listen to the arguments. Like “austerity Britain”; “broken Britain”; “big society”; “the Miliband wagon”; “red ed”; “We are all in this together” and so on, we have heard more slogans in 8 months than we heard in 13 years of Labour. Quite an achievement.
In order to provide good policy decision making, politicians need to understand the issues and evidence and provide solutions to the problems we face.
There have been some good signs recently regarding the direction of David Cameron and the coalition with the U-Turn on the forest bill; welfare reform to try and make work pay and the Treasury paper released which could create a more far reaching regulatory system for the financial sector. (see http://www.bbc.co.uk/blogs/thereporters/robertpeston/ )
Today the deficit deniers in the form of UKUNCUT will be occupying branches of Barclays Bank and turning them into useful public spaces. You could say, contributing to the Big Society.
Those on the right wing will be calling for more laws to control the Unions; how these deficit deniers are living on another planet and how we have to move on from the Banks as a political issue.
The issue of the bankers never seems to go away though. When we feel we have heard everything we could, and when previous jaw dropping moments pass, another one arrives. This time it is thanks to some digging by Chuka Umunna MP. We now have a confirmation of just how much tax Barclays Bank paid in 2009. The total sum of the 28% Corporation Tax paid was . . . er wait for it . . .
£113 million
This is from a profit made of £11.6bn. Barclays have tried to make out that their entire tax paid was £2bn, but this includes tax paid on behalf of employees and nothing to do with tax on the company itself in corporation tax.
Now, to be fair, it is not a straightforward subject. A company like Barclays is a very large company with many subsidiaries and they have to pay tax in various locations. They are also dealing in a global market competing on a global scale. However, a quick perusal of where the subsidiaries are based and the true picture begins to appear. Within their structure they have 30 subsidiaries in the Isle of Man, 38 in Jersey and 181 in the Cayman Islands, all tax havens. It has also been revealed that only 20% of the tax paid by Banks in 2010 was not through employee contributions.
We live in an amazing world at the moment. Three years ago we could not have imagined that there would be a run on the banks and then the effective nationalisation of Banks throughout the western economies; that the most right wing government in the USA in it’s post war (WWII) history lead by President Bush would nationalise the Banking sector; that a quasi Tory government in Britain would nationalise the very sector that it had courted for the previous 10 years; that keynsian economics would suddenly come to the fore in the USA; and that the all knowing IMF, that is still quoted today by George Osborne as the arbiter of sound macro-economic finance, would produce a report 6 months before the crises stating that the model for economies should be based along the lines of the light touch regulation in the USA and Britain.
Meanwhile, our response to these remarkable events appears to blame those in the lower socio-economic strata’s of society. We are about to reduce the amount we are spending on those with disabilities by 20%. We are told this is a reform and nothing to do with just saving money. We are making people redundant from the public sector who we are told don’t actually do anything. We are cutting the services that those on lower incomes and the elderly rely upon, and we have cut the teaching budget for Universities by 80% and increased the student debt by tripling fees.
We are told if we discuss an alternative we are DEFICIT DENIERS.
Like the corrupt MP’s in the expenses scandal, who said it was “within the rules”, the banks also use this excuse. The truth is that our leaders, from which ever party, are in hock to the banks. The banks have to much power over our political parties, and our political leaders have encouraged tax havens in old colonial territories. The Banks use every loophole in the book to prevent them paying a morally acceptable amount in our society.
It is time for the politicians and the Banks to take their head out of the sands and realise that it was not the general public and the “perceived” weakest members of society that got us in this mess. It was not an evil marxist Labour government that got us in this mess, and it was not benefit cheats or the disabled who we are led to believe are no longer disabled that are to blame.
It is the economic orthodoxy, corrupt and out of date political system and the Bankers that are to blame.
The controversy over the Banks will not go away until they pay their way; until banking reform is enacted; until the banks are no longer too big to fail and until our political system cannot be corrupted by the vested interests of the rich.
Bankers and Politicians need to wake up and smell the coffee. If bankers and the rich generally paid their way the cuts would be less severe. This is a genuine debate, not deficit denying or being left wingers. If Bankers do not take their noses out of the trough, no amount of rhetoric about the Big Society will placate the growing discontent throughout our country.
EXTRANEA 