The news that John McDonnell, Labour's new Shadow Chancellor, has said that his party will support George Osborne's so-called "fiscal charter" is, perhaps, the first sign that things have not changed as much as those flocking to Jeremy Corbyn's scarlet banner might have hoped.
Yes, he does go on to say that, if in charge, he would tackle the deficit by very different means, ensuring that low and middle income earnings would have their burden eased, but, as they say, the proof is in the pudding, and the evidence of the actual policies is a bit thin still.
And, there are some apparent contradictions. Labour would run an overall surplus, as the fiscal charter implies, yet would borrow to invest in infrastructure structure projects. And, if one is intending to protect the poor and middle income households, where does the money come from to balance the books otherwise, if economic growth, married to below real terms growth in public spending, doesn't fill that gap?
Increased tax rates on the corporate sector, linking capital gains tax to personal tax rates, new higher rates of income tax for the wealthy, a freeze (or even cut) in inheritance tax thresholds, all would, one presumes, be popular with those who backed the new Labour leadership. Do they make good economics? I'm not entirely convinced.
You could reduce corporate welfare, some of which would probably reduce the social security bill - is it right that my taxes go towards subsidizing low-wage workers rather than having them paid a proper living wage, for example?
But, whatever the flesh that is put on the current skeleton of Labour's economic policy, the desire to establish credibility by agreeing with George Osborne, and not John Maynard Keynes, is a sign that British politics may not be changing as radically as we might have thought.
8 comments:
"...is it right that my taxes go towards subsidizing low-wage workers rather than having them paid a proper living wage, for example?"
That question is tricky. Unless the employer is able to reduce costs (which they would be attempting already) or is willing to take a cut in profits, increased cost of a job will be passed to consumers. It might be insignificant for a high margin company or a deal breaker for others.
Would Lib Dems be prepared to adopt citizen basic income? That would mean tearing up existing tax systems and job subsidies.
I find John McDonnell's words to be encouraging because he recognises that the anti-austerity argument has been shallow. Anti-austerity campaigners are blockers. A political system comprised of aspiring changers and blockers does not deliver good government -- see USA politics regarding same sex marriage or abortion. Or recall UK local government in the 1980s in response to rate capping.
Phil,
The question arises as to whether or not you can make appropriate economic choices if the effective cost of your chosen action is disguised. Effectively, my cup of coffee currently costs what I pay the store, plus the tax I pay that covers the tax credits and the cost of the administration required to distribute the tax credits.
Given that liberals were campaigning for a basic income in the 1980's, it might not be such an uphill struggle to get the Party to adopt it as a policy. Of course, persuading an easily misled electorate of its value is a different matter, and radical change to the tax and benefits system is a bit like trying to turn a supertanker on a sixpence.
I find John McDonnell's words interesting, but not yet encouraging. George Osborne's fiscal contract is such an obvious trap that it is easily avoided, yet John has willing walked into it. Why on Earth allow your opponent, with whom you fundamentally disagree, to restrict your freedom of manoeuvre to do what you think might be necessary?
"...radical change to the tax and benefits system is a bit like trying to turn a supertanker on a sixpence."
Do Liberals have any other purpose?
I'll have worked in taxation for twenty-nine years next month, so perhaps I have a relatively unusual view on our taxation system, i.e. an informed one.
And, as a liberal bureaucrat, I tend to the view that radical change without widespread support tends to fail.
"I'll have worked in taxation for twenty-nine years next month..."
It must be shocking, Mark. All of those years in taxation. i.e. presuming that you are better informed than others?
I thought that liberals think outside the norm. Think harder and better.
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Thanks for your time, Mark.
Phil,
Clearly, the advantage of being so much cleverer than those around you has failed you on this occasion.
Being better informed does not make you right, it just gives you a better awareness of the issues. And, to be honest, twenty-nine years of being confronted with the complexities of the United Kingdom's taxation system on a day to day basis does offer insight, if you'll let it. Does that make my views the right ones? I'll let others be the judge of that, even as you opt to be judge, jury, and rather gleeful executioner.
And you might think that liberals should think outside of the norm, but that seems, to me at least, to imply that non-liberals aren't obliged to do so. That's a rather lazy way of looking at things, isn't it?
So, rather than patronise people for the behaviour you assume them to be guilty of, why not ask yourself the question, "what is their motivation?", rather than close your mind to the possibility of doubt.
And, when you've done that, come back, and we can talk some more.
OK, Mark.
I've worked in IT for 30 years, so I am accustomed to criticism. I've done jobs like your own where it appears that everyone knows more about it than you.
My comment ("presuming that you are better informed than others?") was too aggressive and I apologise.
I trust that we can resume robust debate?
"And you might think that liberals should think outside of the norm, but that seems, to me at least, to imply that non-liberals aren't obliged to do so. That's a rather lazy way of looking at things, isn't it?"
Small L or big L liberals? The Liberal Party which fitted in the back of a taxi achieved little -- aside from keeping liberalism alive, promoting divorce law reform and "homosexual legitimacy". It's not a bad score for middle aged white blokes in a taxi. The Liberal Party and Lib Dems have never achieved much without finding friends.
If David Boyle were to chip in here, he'd ask whether we have anything to say about economics, which is where we started.
Phil,
I'm not sure that I really understand where you're going with this. But then, I don't think that your style of discourse and mine really marry terribly well, so, if you don't mind, I'll decline your generous offer to continue prodding me with a stick.
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