The Tory NHS ‘reforms’ are an attempt to marketise the NHS. The NHS is one of the UK’s most noble institutions, and it is effective and highly efficient by international standards. Every important body in the medical/healthcare profession has come out against the ‘reforms.’ Meanwhile, the government is actually putting its wrecking job into effect before the bill has even been passed by Parliament.

It is a disgrace: worse, it is the attempt to end something that we need (a national, public health service), and that represents the social solidarity that makes us more than a mass of competing individuals in a glorified marketplace. The survival of the NHS is a core sign that we live in a civilised society.  This was not only not in the Tory manifesto, but they actually ruled it out as an option!

No one has voted for this. Everyone should all they can  -however little -to stop them.

For a way to publicly register your view (whatever it is) – click here.

‘And these words shall then become

Like Oppression’s thundered doom

Ringing through each heart and brain,

Heard again – again – again -

‘Rise like Lions after slumber

In unvanquishable number -

Shake your chains to earth like dew

Which in sleep had fallen on you -

Ye are many – they are few.’

Complete poem:  Shelley – The Mask of Anarchy.

Good article by Daniel Trilling on the meaning of the Millbank protest here.

The government and the press say we are in the grip of a debt crisis caused by the ‘bloated’ public sector. Here, Red Pepper debunks the myths used to push cuts to jobs and public services

MYTH: Government debt is the highest it’s ever been

The UK’s government debt is at around 70 per cent of GDP (the total amount of goods and services produced in one year). That is certainly high, but it is far from unprecedented.

Government debt never fell below 100 per cent of GDP between 1920 and 1960. It is only in the past decade or so that it has become normal to think of government debt being stable at around 40 per cent of GDP.

It is worth noting that government debt reached 250 per cent of GDP around the end of the second world war, as the result of a ‘once in a generation’ economic and political crisis. It is certainly arguable that we are now living through a similarly momentous crisis.

MYTH: The UK’s debt crisis is one of the worst in the world

Just as the current level of government debt is not unprecedented historically, neither is it substantially higher than that of other countries.

IMF data (IMF World Economic Outlook Database, April 2010) shows the UK has the lowest government debt as a proportion of GDP among the G7 countries (the US, Canada, Germany, Britain, Japan, Italy and France).

Much has been made by Cameron and Osborne of Gordon Brown’s ‘imprudent borrowing record’. They say that before the spending to stabilise the financial system, public debt was high.

But again, IMF comparisons of the level of public debt prior to 2007 showed the UK in a much better position than many comparable countries, such as France, Canada, the US and even Germany, the home of fiscal rectitude.

MYTH: Government debt is ‘unsustainable’

The sustainability of government debt is not just dictated by its size, but by its make up. We have already seen that government debt is at a comparable level to other similarly sized economies. Where the UK is in a much stronger position, however, is in the nature of its debt.

While countries such as Greece tend to owe money to external financiers, the vast majority of UK debt – about 70 to 80 per cent – is held within the country.

And the UK’s debt is not so short term. Countries such as Greece, Ireland and Portugal have average debt maturity rates of between six to eight years, but UK government debt stands out among international comparisons as being much longer term at well over 12 years on average.

This means that the UK has to ask the financial markets to refinance its debts much less frequently, making it less vulnerable to short-term speculative pressures and much more able to continue to finance its debts on a sustainable basis.

MYTH: The government shouldn’t get into debt, just as your own household shouldn’t

This overlooks the fact that, for the past 30 years, governments have positively encouraged households to get into debt.

In fact, it can be prudent for households to take on debt – particularly if they are borrowing to pay for something (a house or educational qualification) that might reasonably be expected to improve the household’s income and well being in the long run.

In just the same way it is often sensible for governments to take on debt to pay for investments (such as housing or transport infrastructure) that will make the economy work better and so pay for themselves over the longer term.

But the public economy is also different from the household economy. What might make sense for a household could, for the government, deepen a recession. When times are hard households tend to tighten their belts – reducing their spending and borrowing. But if everyone does this at the same time, the effect is counterproductive: total demand for goods and services falls, which makes it harder for businesses and individuals to generate an income, and everyone ends up worse off.

This is exactly what is happening now, which is why it is essential for the government to compensate for households’ reluctance to spend and invest.

MYTH: Public spending got ‘out of control’ under Labour

It is true that the Labour government gradually raised public spending in the early part of the decade, but it was from what were historically very low levels.

Levels of public spending are now about the same as they were in the early 1990s, at the time of the last economic crisis. This is because spending always rises during a recession as a result of welfare spending on unemployment.

In fact, levels of public spending as a proportion of GDP were much lower for most of the 2000s than they were than at any point since the 1960s.

Where Labour did spend more in the years after 2000, it was necessary to repair the visible effects of long-term under-investment. Who can forget schools and hospitals with buckets in the corner to catch the leaks, or grim city centre landscapes with crowds of homeless people sleeping rough?

Labour’s increased spending also addressed workforce shortages in schools and the NHS, where more staff were needed to raise educational standards and care for an ageing population.

Rather than cutting such spending, the crisis could be an opportunity to build the infrastructure of a more energy-efficient, green economy. That would prepare us for the longer-term structural barriers to growth presented by climate change and the depletion of natural resources.

MYTH: The UK has a big public sector compared to other countries

Public spending in the UK is lower as a proportion of the economy than in the likes of France, Italy, Austria and Belgium, as well as the Scandinavian countries (OECD World Factbook 2010).

And spending on core areas such as health and education remains comparable or low in relation to other OECD (broadly speaking, ‘rich’) countries.

For example, the UK spent just 8.4 per cent of its GDP on health in 2007, roughly half that spent in the United States (once the large private sector is taken into account) and well behind Germany, France and most other west European nations.

On education, the UK again spends less per pupil than most comparable OECD countries.

The UK is not profligate in public spending and does not have an oversized public sector compared to similar countries.

MYTH: Spending on the public sector is ‘crowding out’ private sector growth

It is argued that public spending comes at the expense of overall growth, because potential investment is being re-directed into taxation to fund an ‘unproductive’ public sector. But in fact investment in public infrastructure and services is essential to private sector productivity, and so is no less critical to future growth than private sector investment.

Furthermore, the UK is not a highly taxed economy. The OECD’s comparative figures on taxation as a proportion of overall economic output show the UK way down the list, only just above the average.

It is sometimes suggested that taxes hit the private sector in such a way as to discourage job growth. Again, though, the data shows the UK to have very low levels of taxation per job: far lower than the OECD average.

The second way in which the public sector might be said to be crowding out private sector growth is by taking workers it needs, but this would only really be the case where the labour market was operating close to full employment.

With the unemployment rate at about 8 per cent, this is clearly not the case. and in many areas of public provision – from child protection, to education and training, to care for the elderly – there is a pressing need for more, not fewer, public service workers.

Finally, some argue that public investment ‘crowds out’ private investment, because government borrowing pushes up interest rates and inflation. But there is no evidence that this is currently a problem – real interest rates are low, and the economy is still operating well below its potential output, which means there is lots of room for non-inflationary public sector expansion.

In fact, in current circumstances, public spending is more likely to stimulate private sector investment by maintaining levels of demand and preventing a deeper collapse of economic activity.

MYTH: Public sector workers are overpaid

It is true that very recently average wages in the public sector have moved marginally above those in the private sector. This is mainly because privatisation has pushed many low-paid jobs out to the private sector.

The trend is not that public sector wages have risen sharply, but that private sector wages have fallen – a characteristic of the economic crisis. If we take a longer view, since the 1990s average public sector pay has not seen significantly more growth than the public sector.

And when private sector wages are split up to consider different sector and occupational patterns, a rather different picture emerges. Wage rates differ widely, with the average pulled down by very low wage sectors such as distribution, retail and hospitality.

What the data shows, therefore, is not that public sector workers are overpaid, but that some private sector workers are severely underpaid.

MYTH: The financial crisis was caused by a lack of money in circulation

This one is true to some extent, but it requires careful explanation. The system of finance capitalism pursued in the UK and US since the 1970s has continuously recycled economic surpluses away from the poor toward the rich. In both countries, the share of economic output taken up by wages (as opposed to profit) has fallen, and inequality has risen. The very affluent have got wealthier, at the expense of the rest of the population. In 2007/08 the richest tenth of the population had more than 30 per cent of total income (‘Income Inequalities’, poverty.org.uk).

In the post-war period, part of the role of the state was to redistribute economic surpluses to the wider population so that they could keep spending on goods and services. This was seen as so important precisely because large inequalities had been identified as one cause of the 1929 stock market crash and the subsequent depression.

For a while, the problem that rising inequality presented for growth was overcome by the use of credit and the super-exploitation of workers in the developing world, which allowed consumers to keep buying cheap products. This is one of the factors that fed the debt crisis.

So, yes, there is not enough money in circulation – but this is precisely because it has been captured by the super-rich.

MYTH: Cutting public spending will help us avoid economic disaster

A range of economists, from Larry Elliott of the Guardian to Nobel prize winning professors like Paul Krugman and Joseph Stiglitz, are warning that making cuts now raises the very real possibility of undermining the fragile economic recovery.

As every first year economics student knows, there are four main components of economic growth: (1) exports; (2) investment; (3) household spending; and (4) government spending.

Over the past two years, governments around the world have stepped in to bridge the gap in the first three by providing debt-financed public sector stimulus packages. There is precious little evidence that the private sector or households are ready or able to step up their activity to fill the gap, or that exports will increase in a world where our major trading partners are also reining in spending.

As such, any austerity programme may prematurely remove the foundations of the recovery and lead to a return to recession – a ‘double dip’. This would be disastrous, not just for growth, but in turn for tax receipts and the capacity of the state to reduce the deficit and government debt.

How will that help to stabilise the world economy? How will it deal with the frequent, persistent and cumulative financial crises that are endemic to it, or overcome the pressing resource and environmental constraints that are so clear for all to see?

The economic crisis was a golden opportunity to move toward a more economically, socially and environmentally sustainable national and international economic system. For a while all countries were so concerned about the whole system that there was at least a chance to overcome narrow self-interest and look toward a more co-operative and sustainable future.

We are about to squander a once-in-a-generation opportunity for progressive change – unless, that is, we organise and campaign for an alternative.

MYTH: There is no alternative to cuts

The beginnings of an alternative have already been discussed. For example, Unison’s alternative budget (‘We can afford a fairer society’, Unison Alternative Budget 2010) suggests that almost £4.7 billion could be raised each year from introducing a 50 per cent tax rate on incomes over £100,000.

About £5 billion could be raised every year from a tax on vacant housing; £25 billion a year could be raised by closing tax loopholes; and the IPPR think-tank has estimated that a ‘Robin Hood tax’ on financial transactions could raise another £20 billion a year (T Dolphin, Financial Sector Taxes, IPPR 2010).

All these taxation measures would be ‘progressive’ in the sense that they would divert wealth from the rich to the poor, in contrast to measures such as the government’s VAT increase, which hits the poor hardest.

In addition, some of these ideas might have behavioural advantages: they could work against destabilising speculative financial flows, or lead to fewer empty houses.

Similarly, we could look at spending that really should be cut. For example, while estimates of the true costs of replacing the Trident nuclear weapon system vary widely, they tend always to come in above £80 billion over 25 years.

Getting rid of the cost of the war in Afghanistan, massive consultancy fees on private finance deals and contractors’ profits in privatised public services would also make a difference.

We could also decide to manage the deficit and public spending in a long-term manner, targeting social issues such as inequality, under-investment in education and child poverty, and strongly regulating international financiers, banks, hedge funds and the like.

All of these are political choices.

We don’t have to live in a world where unemployment co-exists with a long-hours culture in which workers are so stressed that mental health problems are on the rise.

We don’t have to live in a world where bankers gamble millions across the world in elaborate financial casinos at the same time as 1.4 billion people live on less than $1.25 a day.

We don’t have to live in a world where there is no limit to how much of our collective economic output goes to the rich, yet others do not have enough to eat.

It is worth remembering that after the last crisis of this scale and significance, and with public debt something like three and a half times the size it is today, we established the NHS, created the welfare state, put in place comprehensive education and built a vast number of public housing estates.

History tells us that there is more than one way out of an economic crisis.

Download our pdf version of this article to distribute far and wide …

Footnote

Thanks to Dr Alex Nunn of Leeds Metropolitan University and the Transpennine Working Group of the Conference of

Reproduced with permission from the excellent Red Pepper: Countering the cuts myths – Red Pepper.

hnn

The Irresistible Itch

Colin Kidd

Ever since the rise of Margaret Thatcher, personal responsibility has been the irresistible itch that the Conservative Party dare not scratch – at least not in public. Notwithstanding the party’s boosterish slogans of enterprise, freedom and low taxation, many of its elderly members – and some of its politicians – have long held to a more cautious ethos of middle-class respectability, restraint and downright frugality. In theory, these Conservatives wished to roll back the restrictions of the socialist state; in practice, many of them reckoned that wartime rationing had been good for the moral fibre of the nation, and took the view that the softness of modern consumerist lifestyles had raised a society of degenerates. It was but a small step from inside lavatories and quilted toilet paper to long-haired decadence, dysfunctional families and drug addiction.

However, as Thatcher learned in the months before she became leader of the party, it was a mistake to broach too obviously the ethics of personal responsibility. Had not her ally and mentor Keith Joseph seen his own leadership aspirations shrivel in the aftermath of his notorious Edgbaston speech? When Joseph addressed the Edgbaston Conservative Association at Birmingham’s Grand Hotel on 19 October 1974, the Conservatives, under Ted Heath, had just lost a general election and Joseph had emerged as the likeliest alternative leader. However, in a speech which deliberately departed from economic issues to denounce the permissive society, Joseph undermined his political credentials. He warned that Britain’s ‘human stock’ was ‘threatened’ because a high and rising proportion of children were being born to adolescent mothers ‘in social classes four and five’, some of whom were ‘of low intelligence, most of low educational attainment’. Joseph believed that these mothers were ‘producing’ the ‘delinquents’ of the future, ‘denizens of our borstals, sub-normal educational establishments, prisons, hostels for drifters’. To prescribe birth control for these girls was perhaps ‘immoral’, but surely, Joseph calculated, it was the lesser of two evils. Although Joseph’s message resonated with the Conservative base and beyond, his invocation of eugenics undermined his reputation with the broadsheet press. The influential journalist Alan Watkins described him as ‘a saloon-bar Malthus’.

Read more at:

LRB · Colin Kidd · The Irresistible Itch.

The new Tory party: desert for everybody

It’s taken me a few days to get around to it, but here’s my take on David Cameron’s equality speech (The Big Society: Hugo Young Lecture, 10 Nov 2009).

Cameron name checks Wilkinson and Pickett and says that they “have shown that among the richest countries, it’s the more unequal ones that do worse according to almost every quality of life indicator”.

He then sets himself this rhetorical objective: how can you square an admission that less equal societies do worse than more equal societies with a long-standing Tory view on personal wealth: that is, the wealth of an individual is a reflection of the choices they have made. Since choice is good, material gains that aren’t explicitly judged unlawful must also be good. Here is an example of this kind of thinking in a 1977 speech by Margaret Thatcher:

The economic success of the Western world is a product of its moral philosophy and practice. The economic results are better because the moral philosophy is superior. … Choice is the essence of ethics: if there were no choice, there would be no ethics, no good, no evil; good and evil have meaning only insofar as man is free to choose.

And of course this view was taken up almost wholesale by New Labour, so it’s a view that still has currency in a very large part of Britain’s polity. The problem for advocates of choice simpliciter is that choice is compatible with inequality. And it’s hard to be an advocate of inequality: at least, it’s hard to do it in a way that’s going to make you popular. Cameron’s way out suggests sleight of hand: he switches from talking about inequality measured across the whole of society to talking about inequality between those in the middle and the least well off:

We all know, in our hearts, that as long as there is deep poverty living systematically side by side with great riches, we all remain the poorer for it. That doesn’t mean we should be fixated only on a mechanistic objective like reducing the Gini co-efficient, the traditional financial measure of inequality or on closing the gap between the top and the bottom. Instead, we should focus on the causes of poverty as well as the symptoms because that is the best way to reduce it in the long term. And we should focus on closing the gap between the bottom and the middle, not because that is the easy thing to do, but because focusing on those who do not have the chance of a good life is the most important thing to do.

And if our attention can be shifted towards the category of the least well off and away from the category of the wealthy, then perhaps we might just stop worrying about the wealthy. If this is Cameron’s purpose, he’s only following in the footsteps of New Labour’s Peter Mandelson, the man who told us he was ‘intensely relaxed’ about personal wealth.

But let’s say we take Cameron seriously: let’s say we agree that alleviating extreme poverty is the goal that matters and restrict our political aim to that. How can we reach that goal while (implicitly) either maintaining taxes at current levels or even reducing them? After all, in the same speech, Cameron tells us the increase in government spending since 1997 can’t be sustained. More than that, he argues: ‘large government’ has come to cause inequality:

But, quite apart from the fact that it turns out much of this has been paid for on account, creating debts that will have to be paid back by future generations; a more complete assessment of the evidence shows something different – that as the state continued to expand under Labour, our society became more, not less unfair.

Cameron’s answer, it seems, is to reduce state spending and curtail the role of government and instead go work on the way people think: children should get “better education” and adults should get better attitudes: “responsible behaviour” should be incentivised. Now this may make you think of New Labour, but forget them: to my mind, at least, the stall Cameron is setting out looks as ugly as anything yet brought forth by American conservatives. This is workfare advocacy. And the failure of this approach, of course, is just what people like Wilkinson and Pickett have been working hard to demonstrate.

But even if your stall is unattractive, you can set it out in an honest way. You might simply say: we believe that benefit claimants should do more to justify our support. Cameron goes beyond this. For one, his suggestion that the increase in state spending since 1997 (when New Labour took office) has caused inequality is really reaching. A history of UK wealth distribution shows that most of the post-war rise in inequality took place from the late 1970s to the early 1990s: all Tory years. This is well known. Even worse, Cameron conflates ’size of government’ with ‘amount of state spending’. These are clearly not the same thing: you can have a small government that spends a lot, or you can have millions of bureaucrats who are needlessly penny-pinching. The complaint that many have made about New Labour is that they have promoted the second. It’s a reasonable complaint, yet it says nothing about the proper role of government: what its aims should be; what makes it legitimate.

Is there anything more going on in Cameron’s speech? Is there a broader ethical point? Is there anything new? I can’t see it. And an old idea which is not getting any Conservative Party air time, but which needs to, is this: an individual’s lawful choices may have bad consequences for others. If our lives go badly, we might have a share in the blame, but we don’t carry all of the blame. Where lives are blighted, adjudicated redress – where those who adjudicate are under democratic oversight – is justified. Taxes can be fair.

Charlie Whitaker at:

The new Tory party: desert for everybody | afoe | A Fistful of Euros | European Opinion.

I’m starting to resent the bidding war between two political parties whose main difference seems to be how fast they plan to make us ‘all’ feel pain. For a start I resent the claim that I must somehow pay for a collapse in a banking system dominated by a class of people whose main interest was the ruthless acquisition of wealth at any cost (to other people).

And I  doubt that the pain of the projected cuts (to pay for the debt they have plunged us into) will be equally distributed. The richer you are the less you’ll feel it, even if you were one of the swine that caused the problem (are you listening Fred Goodwin, you selfish pig?)

Example: cuts in inheritance tax are going to go ahead anyway, according to George Osborne. Why? because they benefit people who have money, that’s why. People who  benefit even more from Tory governments than they do from spineless ‘New Labour’ ones. Contemplate that while you view the wreckage  that was once our public services. ‘We’re all in this together’.  What an insult to our intelligence.

The Conservatives have vile little deal sorted out with Murdoch, and when they come to power (alas! – it’s looking pretty certain), they will start to knacker the BBC for him. One way to help Murdoch is to hobble the regulatory framework that protects public service broadcasting and restrains him (I’ve blogged on that before) – the other begins to emerge in the Guardian story  below. In return for The Sun‘s support – and that of the rest of his squalid empire – the Tories will ensure that the BBC is cut down to size. Naturally they will deny the link, but it is there, and it will be toxic for yet another part of the UK’s public realm. And that’s a firm prediction.

You didn’t  think the Sun’s backing came free of charge, did you?

Jeremy Hunt warns of tough times ahead for all ‑ including BBC

Hunt, who would take charge of broadcasting policy as culture secretary, says the BBC should respond by “cutting its cloth”, pointing out that 47 BBC executives earn the same as, or more than, the prime minister’s £197,689 salary.

If the BBC fails to act on a voluntary basis, Hunt makes clear he would use his role overseeing the renewal of the BBC licence fee in 2012 to push for salaries to be cut. “That will be a chance to look at the whole direction of the BBC ‑ and executive compensation is obviously one of things that you discuss as part of that.”

Hunt shares the concerns of Sir Christopher Bland, the former BBC chairman, who warned the corporation to be careful about throwing its weight around now that the BBC’s income outstrips all its commercial rivals put together by £1bn. “There is a real risk that if this carries on, the BBC could be the only show in town. That would be incredibly unhealthy for consumers who really appreciate the choice that they get.”

Stressing that the BBC’s independence is sacrosanct, Hunt is careful about dictating where it must cut. He rejects the call from the Sunday Times for the BBC news website to be scaled back because it is undermining newspaper websites.

But the BBC should be careful about expanding its website. “You might think at first glance that if the BBC does have a website about angling, that can be brilliant for the angling community. But if the unintended consequence of that was that it drove out of business every single angling magazine in the country, you might take a different view.”

More below, if you can stomach it:

Jeremy Hunt warns of tough times ahead for all ‑ including BBC | Politics | The Guardian.