In The Red

In the space of a few days the people of Britain have learned that their country is broke and facing dangerous levels of debt with little in the way of sustainable recovery to ameliorate the effects. Yet on both publications days – last week for GERS and yesterday for the Budget – a political class cheered and whooped like partying baboons rather than confront the truth. In Scotland the local economy is some £15 billion in deficit (hurrah!) while across the UK the national economy faces of shortfall of £56 billion to add to the still-growing £1.6 trillion national debt (whoopee!).

Any crisis can be managed and overcome with the right approach but it’s the undignified charade of pretence that is most disturbing. Does any rational citizen honestly believe that the UK’s accounts should be deliberated upon in purdah, manipulated to suit political purpose and then presented like early evening television glitz? George Osborne’s Budget X Factor…

We might, as taxpaying citizens, get the point if he stood up in sombre mood and said we are in trouble. That despite his best efforts, he had failed to hit his targets for reducing the debt and also missed his objective in capping welfare spending. That it was unlikely he would hit his other target of bringing the economy into surplus in 19/20. The reasons included a global slowdown, a distressed Eurozone, lack of industrial development to drive higher productivity with the prospects for improvement poor. As a result he would do all he could to shield the weakest. After all, the top one per cent has already gained 50 per cent of all the economic improvement achieved since 2008.

Instead it’s one baying mob against another in an arena primed for war and utterly incapable of thoughtful analysis or consideration of the national interest. The consistent failure of Osborne to get it right – this is Budget Number Nine – betrays a man making it up as events unfold. Even the keystone policy – cutting spending – succeeds only at the level of diminishing the spending power of individual taxpayers because at the essential level of ‘living within our means’ the government’s borrowing goes up and up with no end in sight. The growth that was to pay for future policies is cut back in the OBR forecasts. The money simply isn’t there. The chief economist at one of those finance houses in London said: ‘The reality is that his forecast numbers rely on accounting tricks, unspecified future spending reductions and more stealth taxes and would be blown out of the water by another recession or a rebound in borrowing costs.’

If the people at the top level with the public, the problem is shared and all energies are concentrated on what we must do to rebalance the economy. Instead we all run off in different directions, cheering if we’re small businesses or wondering if we can afford the wheelchair if we’re disabled. The treatment of those with infirmities who rely on every penny in benefit for an agreeable life is both a moral disgrace for a civilised nation and an insult to the welfare state. Many of them already struggle with mental or physical difficulties, they confront prejudice, have their lives constrained by bureaucracy and rarely earn much more than the living wage. The inexorable crushing of their lives in order to fund extra for those living on unearned income is anti-British.

And where is the opposition to all this? Angry and passionate at Westminster (bravo!) but in the opinion polls not trusted as much as these inhumane Tories. I’ve been despairing lately of politics in England where neglect and indifference have allowed first Blair and now Cameron to rip up any remaining semblance of social compact. The north is already shattered beyond repair by any poncey PR spin about powerhouses. The money flows to the already bulging banks of London, financiers take over the schools and American health profiteers empty the NHS.

You don’t need an OBR forecast to see it is unlikely in the extreme that a more liberal government will be elected soon. The genuine worry must be that this rabidly right-wing, class war government has one more catastrophic miscalculation to come – an Out vote in the EU referendum.

 

 

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Come On, England!

We used to say during the indyref that we had no argument with the English people. That was, and is, true. Our case is for reform of the British state by taking sovereign control of our country and maintaining normal friendly relations – like the Republic. I have to say though that I’ve grown exasperated by the apparent indifference of voters in the South to the systematic erosion of social provision.

Can you imagine the reaction across Scotland if the government announced the end of parental choice in education and the rapid conversion of local authority schools to privately-run but taxpayer-funded academies? Groups of religious zealots and profit-seeking investors taking control of all school education? Even, it appears, being handed, free of charge, the title deeds to billions of pounds of buildings and land with no long-term prohibition on selling and developing…

Picture the apoplexy at BBC Scotland if hospitals here had debts of £2billion like health trusts in England. Many foundation trusts are failing to meet NHS waiting times for A&E care, cancer treatment, non-urgent operations in hospital and vital diagnostic tests.

The NHS can no longer afford operationally and financially to deliver the cuts required by the government and ensure patients get the services they need. The medical director of the NHS in England says it may no longer be able to maintain a free service.

The Britain we thought we belonged to is being steadily dismantled from within by Westminster politicians whose tenure will be judged historically as more transformative than Thatcher’s. The Royal Mail sold off at bargain basement prices. The government no longer legally responsible for running health services. It’s devolved to regional groups with a legal requirement only to provide emergency care and ambulances. The rest is optional. Of nearly £10bn of NHS contracts in England last year, 40 per cent went to private companies.

Groups of hedge fund managers and financial spivs are now running schools having been given taxpayers’ money to help them and, it seems, the property rights to dispose of – up to and including selling to investment companies in tax havens and renting them back at exorbitant rates. Look at the people Michael Gove brought into act as advisers at the Education Department. Anthony Salz, corporate lawyer on the board at Rothschild, the bankers. Theodore Agnew of right-wing think-tank Policy Exchange, Tory donor and trustee of the New Schools Network, given £500,000 of public money to advise anyone who wanted to set up a free school. Paul Marshall, hedge fund manager. Jim O’Neil, formerly of  Goldman Sachs Asset Management. John Nash venture capitalist, Tory donor and sponsor of Pimlico Academy. He was put in the Lords and made a schools minister…Get the idea?

The barrister and campaigner David Wolfe writes: Academy status is being presented to parents, teachers and governors across England as benign, a way of taking back control of money being wasted by lazy local authorities. Then before you can shout Land Grab! school buildings, land and other assets are handed over to philanthropic-sounding trusts with links to private equity and hedge funds.

The education of England isn’t just being privatized, it’s assets are being ripped off by ministers in cahoots with their financial friends. Members of trust boards are paid huge salaries while contracts for services are handed out to each other’s companies in a glut of self-serving redistribution of public money. The same hard-noses carpetbaggers will negotiate teacher salaries. How do you think that will go? The way schools are run, parents’ right to know and management accountability are being thrown on a bonfire of the social consensus that has sustained the UK for 70 years. A select few who see an opportunity for profit and self-aggrandisement are the inheritors of the state school system devised for community betterment and paid for by generations of British taxpayers.

Education and health are the corner stones of public service but in England are now being turned outside in with barely a nod to any democratic mandate. And yet, where is the anger?

Labour’s reponse so far is muted (they having started the whole academies nonsense) and confined to the practicalities and timing. Thus far, it’s left to the teachers themselves to sound the warning to parents and voters. Yet the academies have been largely accepted, the uncoupling of school from local control agreed by parents and the longer-term potential for educational decline and fad interference without accountability ignored. The regulator in England currently rates 85 per cent of state schools good or outstanding while question marks hang over the performance of hyped academies.

Are English parents working in the belief that these are just like private schools and therefore to be aspired to in the British game of class consciousness? Is there some underlying concept that ‘private health’ and ‘private schools’ are what middle class families should aim for? Or is the political culture in England generally less well-informed. Is ignorance of the real revolution in the schools and in hospitals passing them by? Certainly the BBC reports lacked any historical perspective that this was a generational change in how education operated and even the Guardian didn’t include the schools story in its online headlines.

It’s sounding patronising, isn’t it? As if they don’t get it. But I just feel it is unthinkable that these reforms could be proposed here without a shocked and utterly implacable opposition. Look at the persistent media attacks on education and health in Scotland when the comparative reality is that we live in a welfare haven where services are protected and budgets, where resources allow, chase the need. Yet there is no sign of that in England. I want to shout at them to wake up and realize what they’re losing and in whose interests this is being done. One thing we do have to thank the politicians for – the devolution of valuable public services to Holyrood without which we’d be trapped in the Tory fire sale.

 

 

 

 

 

 

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I Demand a Rebate

Remember the rates? They caused uproar across the country until replaced by the community charge which offended every democrat (who wasn’t saving hundreds a year) and helped to usher out Margaret Thatcher. Council tax, dating from the early nineties, may be as unpopular but it has one strength – the collection rate is over 95 per cent because it’s based on a property, a fixed asset, rather than a mobile and devious individual taxpayer.

Ease of collection and the fact voters find it easy to understand means it has an appeal to governments, in the same way the Barnett Formula has survived so long. They moan about it in London but to the Civil Service it’s a simple calculation that streamlines the distribution process.

It was revealing that the cross-party group on reforming local taxation failed to come up with an agreed alternative and offered instead a range of options to be taken together. They preferred a mix of tax sources. If that looks like a cop-out, in a sense, it is. There is no precise and fair system which will bring in enough revenue which is why the government has come up with the plan to let councils keep a share of income tax if they build up economic growth in their area and to tax empty land. That could amount to a sizeable sum.

They have tinkered with payment levels in the existing council tax bands to generate a marginal amount – £100m – but in a way that hardly anyone will find unpalatable. Mine is likely to cost £9 or £10 more a month. There will be refunds and exemptions but the simplest part is that those living in 75 per cent of homes will be unaffected.

This trumps Labour’s offer of charging everyone a penny more in the pound and asking them to negotiate a refund system from councils (who aren’t the taxing authority). There is still a check on local government with a 3 per cent limit on future rises and the extra money raised from the E to H higher bands will be allocated to education – both to combat the attainment gap and again to outflank Labour. To those who argue this is undemocratic and distribution should be left to local authorities, I simply ask: What happened to nearly £1 billion of anti poverty funds given by the government to councils without ring-fencing? As oor Jackie Baillie will tell you – it ‘disappeared’ and not into the pockets of the poor.

There is a major disappointment here. Months of work by a cross-party group after statements indicating SNP support for abolition of the council tax and all the government comes up with is an amendment. It is cautious to the point of timidity. Personally, I favour a land tax and local sales tax as fair and collectable and I’m far from alone in bemoaning what may the last opportunity of years of getting to grips with local taxes and council accountability.

But am I surprised? Of course not. Today we are 64 days from voting in the Holyrood elections. How naive would it be to herald a massive reorganisation which sends people scurrying to find out how it affects them only to find there are no answers yet?

The Greens and the Left are astonished and angry but really, would they announce radical reform just ahead of a vote? There surely is a failure here to differentiate between principle and politics. Just because something seems to be the right thing to do, doesn’t mean it’s justified to a politician who is balancing people’s opinions with his or her own political interest. Somebody asks: Why not be radical when you’re at 60 per cent in the polls? But that’s exactly why you don’t take a risk. You’ve got the votes already and all you can do is lose them. The starry-eyed belief that people will just follow a good idea rather than their self interest at election time is disproved time and again. Before any major reform a prolonged period of information is needed to familiarise people with the changes and that was never going to happen in early 2016.

So instead of scary headlines about confusion and concern and unknown costs, the SNP gets this in the BBC: Highest council tax bands ‘to pay more’ says Nicola Sturgeon

Who’s going to argue with that? And, to be brutally honest, is a wider Scottish public going to turn on the words of radical groups who garner between six and nine per cent in the latest polls? (List only). Sorry…

Time and again the sections of opinion which are most radical  fail to grasp the gritty reality of politics – that it is a compromise-based activity.  That is the SNP’s road to success – built on capturing the centre ground. There is a reason why more doctrinaire parties have small support. It doesn’t make them wrong – on the contrary, in the case of the Greens, it looks increasingly as if their time is coming in terms of the environmental argument – it just puts them at odds with the public who may broadly agree but are fearful of anything that sounds dogmatic. You must do it this way because I’m sure I’m right. Indeed, they are suspicious of anything that sounds inflexible or unreasonable and lacks perspective. They rejected the Nationalists as such for decades until they softened their stance on Europe, accepted devolution as a reasonable advance and engaged in the wider debate on a full range of domestic policies. Promising to overhaul the entire system with no clear signpost to winners and losers nor even general consensus of what it should be, represents risk no sane leader would take. It will be interesting to see if the argument continues after the election and forces another and more radical re-think. It’s certainly fertile ground for Greens.

I maintain that for most Scots the campaign for a separate state is as radical as they get. They will look and, I suspect, applaud a package which

Doesn’t confront them with a dazzling new tax system

Is easy to understand

Ends the discredited council tax freeze

Leaves those in cheaper homes untouched

Gives an increased discount to low income families

Charges more to the better off

Doesn’t antagonise higher earners

Raises extra money which must go into education

Limits future council tax rises to 3 per cent

Embraces the prospect of a land tax

And allows councils to gain tax revenue from creating growth

At least the Greens have an alternative. It’s not clear to me that Labour have a worked-out plan to replace council tax, nor have the Conservatives, nor COLSA who all routinely complain. In fact the Tories didn’t even deign to take part in the discussions.

This is a disappointing package for any, like me, who don’t just want reform of local taxation but would like our entire tax system reviewed, streamlined and simplified from corporation tax and national insurance to council tax. The role, structure and funding of councils should be in there too.

But let’s not pretend this isn’t good politics. It’s exactly what you’d expect so near an election and will enforce SNP credentials. As soon as the critics open up, they will say only the better off pay more, the poor are protected and the money goes to our schools – guaranteed. Oh, and what’s your council tax replacement plan, Kezia?

 

 

 

 

 

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