Posts Tagged ‘public spending cuts’

What we’re arguing against and what we’re fighting for

December 12, 2010
George Osborne

George Osborne

George Osborne thought his smokescreen was working. It looked for a while like the people of Britain were going to accept the biggest cuts to public spending seen in the Western world in a century. He had, it seemed, delivered a sleight of hand that would impress even the most slippery magician.

The trick he’s been using to great effect is, though, an old one. It works something like this: in a crisis, people panic. They accept something big has to happen to solve it. But massive crises are complex, and a global economic collapse is particularly hard to understand – we aren’t taught the basics of economic history at school, we learn that these are matters for clever men in suits who use long words.

And so what George Osborne spotted is what right wing politicians around the world have known for the last 40 years: a disaster is a great time to radically change a country. From the privatisation of New Orleans’ schools after Katrina, to the corporate plunder of Iraq after the 2003 invasion, this trick is nothing new. Naomi Klein’s book The Shock Doctrine describes in detail how it has been used the world over.

There is a big problem. People understand this might require a big solution. And so they accept policies they would never normally countenance – policies not designed to solve the problem, but to radically change society in a way no one ever voted for.

And like this sleight of hand, Osborne’s “solutions” too are nothing new. The Conservative students I studied with at university – the generation who were born under Thatcher, and are now the researchers and aids to this government – were arguing for 30% spending cuts long before the recession. And their predecessors did too – in fact, in 1910, the Conservative Party brought down the Government rather than allow the people’s budget, the foundation of the welfare state, to pass. And they have used every opportunity since to rid this country of what they see as a dangerous socialist experiment.

And this “solution” is, of course, nothing of the sort. The idea that you solve a deficit caused by unemployment by cutting jobs is economically illiterate. Don’t take it from me – look at what is being said by the world’s leading economists, including most recent Nobel prize winners: Britain is embarking on a radical economic experiment which is not only un-necessary, but probably going to make the recession worse.

But because people have been taught that economics is too complex for us, many people seem to stop listening when you try and explain why the cuts are a bad idea. And I’ve tried lots of ways:

I’ve tried explaining that the Treasury’s debt really isn’t that big: it was bigger for most of the 20th century, and, compared to the size of our economy, is one of the lowest on earth.

I’ve tried to explain that most of the debt is owed to people in the UK: our pension funds buy government bonds. If, as the Tories predict, borrowing did get more expensive, that would just mean that Britain’s pension funds would get fatter – money the Treasury could tax back.

I’ve tried pointing out that the borrowing isn’t getting more expensive, but cheaper. And this is extra-ordinary. Before the election, the excuse that they gave for cutting public spending was that they believed we’d be punished by the bond markets if we didn’t: investors wouldn’t buy government bonds. They were wrong. What has actually happened is that investors have decided that they don’t want to risk buying shares in companies which might collapse, and so they have rushed to buy government bonds. As a result, borrowing is cheaper than it’s almost ever been. The reason they gave for cutting has evaporated. They were just plain and simple wrong.

And I’ve tried explaining the multiplier effect. The way out of a recession is to invest in jobs. Once you’ve created a job, that person buys stuff and pays taxes. The Tories like to compare the national economy to a household. But, when I buy stuff in the shop, I don’t get lots of the money back in tax. And I don’t get even more back in tax when the shopkeeper buys her stock or pays her staff. And again when the staff buy things, and so on. And so the way out of the recession is to look at the real problem – unemployment – and take advantage of record cheap borrowing, by investing. As Nobel winning economist Joseph Stiglitz – former economist for both the World Bank and Bill Clinton – tells us, cutting now could well lead to higher long term debts.

I’ve pointed out that we tried this all before. Cutting spending to pay the debts of WW1 caused the great depression. Building the welfare state allowed us to build our way out of the debts left by WW2.

And I’ve reminded people that it wasn’t public spending which caused this crisis, but listening to crazy right wing ideologues like George Osborne who thought that we should shut down everything and hand our economy to the bankers.

And I’ve tried explaining that public services aren’t a cost to the economy but an investment in the civilisation which makes our economy possible. If we don’t invest in them now, we make our future economy less prosperous, and this will cost far more than our record cheap, very low debt.

And I’ve pointed out that the impending climate crisis means we urgently need to invest to create jobs building a new economy – this can’t wait, and the legacy we leave if we don’t will be unimaginable.

And I’ve tried many more arguments besides. And these arguments work – sometimes. A little discussion of why the great economists of our age think that George Osborne is either mad or bad or stupid often does leave people convinced.

But many turn off at the wiff of a discussion of economic theory. And you don’t get the chance to have that little conversation with everyone in Britain.

However, there is one more argument: one I haven’t yet mentioned, which doesn’t require so much explanation – an argument which convinces almost all who hear it. A fact so compelling that once shouted, it will echo throughout the country:

If the mega-rich who caused this crisis paid the same level of tax as you and me, we wouldn’t have a deficit.

And of course, all of these arguments are what the Labour Party would be explaining, if they were brave enough to challenge Britain’s entrenched corporate power. But they aren’t. And so, with the noble exception of our one Green MP, and a few on the Labour left, it it falls to us, the people, to make this case.

But that’s ok. It’s ok, because this is nothing new. Public services were won by social movements who shouted, and screamed, and withdrew their labour, and occupied, and built new political parties, and, yes, smashed windows. And it’s ok because the fact that they don’t teach economic history in school doesn’t mean that we don’t remember this lesson. It was our grandparents and our great grandparents who won a state pension, who invented the NHS and who built affordable council houses. That was their legacy to us.

And it’s ok because our thanks to them will be to use the technology that our parents with their state funded education invented for us, to organise a resistance to the Tories so strong that our children will never forget. Because the history of Britain is a history of ordinary people fighting the Tories to win a fair share of our country’s wealth and power.

And as UK Uncut have shown, it is not a history that our generation will soon forget. Because people are realising that George Osborne’s smoke screen stinks. And as we blow it away, we will have a chance to learn the lesson Osborne teaches us, and take the chance to work out, together, what kind of country we want to build from the ashes, and leave for our grandchildren. And, if nothing else, that’s worth fighting for.

A guest editorial posted by Adam Ramsay of Bright Green Scotland and No Shock Doctrine on UK Uncut.


UK Uncut

Tax Justice Network

Tax Research UK Blog

Also see

A sad day for democracy

Captain SKA – Liar Liar

For Our Generation it’s the Greens or it’s Nothing

Taming the Vampire Squid: Take back our banks

Why cuts are the wrong cure

Shop a Scrounger

Topshop day of action against tax dodger Sir Philip Green

Sir Philip Green and his Topshop billions get the UK Uncut treatment

Grolsch tax avoidance

Grateful Vodafone executives say a big thank you to Chancellor George Osborne

Nationwide shut down of Vodafone stores

Vodafone £6 billion unpaid tax bill

Topshop day of action against tax dodger Sir Philip Green

December 5, 2010
Demonstrators glue their hands to the window Topshop Brighton - Cathy Jones

Demonstrators glue their hands to the window Topshop Brighton - Cathy Jones

A more eloquent and informed group of demonstrators would be hard to come across and one is struck by the wide appeal across ages and incomes, of what they had to say. — Alex Thomson, Chief Correspondent, Channel 4 News

What do Topshop (Sir Philip Green Arcadia Group), Vodafone, SABMiller (brewers of Grolsch), Boots, Barclays and now Cadbury’s all have in common? They all dodge their taxes.

We all pay our taxes. We may not like it, but it is part of our civic duty, part of our obligation to the Big Society. But not it seems if we are big enough. If we are big enough or rich enough, we get away with paying little or no tax.

The first Saturday of December, one of the busiest Christmas shopping days of the year, it was the turn of Topshop (part of the Arcadia Group of Sir Philip Green’s empire) to be shut down. The Arcadia Group includes Topshop, Burton, Dorothy Perkins, Evans and Miss Selfridge.

Sir Philip Green, billionaire boss of Arcadia, who owns Topshop, Dorothy Perkins and Miss Selfridge among others. Arcadia is owned by Taveta Investments Limited, which is registered to an office on the tax-haven island of Jersey. Taveta Investments is owned by Green’s family members living in Monaco, where income tax is 0%. It’s estimated Green avoided paying £285 million in tax in 2005 alone.

– Philip Green’s £285 million tax dodge would have paid for 13,000 new police officers
– The tax dodged by Philip Green could have paid for 20,000 NHS nurses
– To clarify the reports, Philip Green avoided £300 million on his £1.2 billion dividend payout

In the Oxford Street store in London security thugs assaulted protesters. As these assaults were witnessed by several people, including the police, I trust charges for assault will be brought and that the local authority withdraws their registration to work as security guards.

Charges for assault should also be brought against the clearly identified thugs in police uniform who attacked a female. There should be no place for thugs like this in any police force.

But well done the police who did the protesters job for them and shut down Topshop stores.

And the mainstream media? To their credit, the Mail Online had excellent coverage, but from the BBC a deathly silence during the day. No mention on the BBC Radio 4 lunchtime news, but did manage to mention that a bicycle thief had been apprehended through a trail he left in the snow! What then of their flagship PM news slot at 5pm? Er nothing. Out of a half hour prime early evening news, almost 15 minutes on Spanish air traffic controllers strikes (and poor stranded Brits suffering) and tut tut corrupt Fifa not awarding World Cup football to England, several minutes on Oprah Winfrey taking her show to Sydney in Australia, several minutes on Asil Nadir allegedly breaching his bail conditions, a few second mention of climate protesters on the streets of London (blink and you would have missed it) but absolutely zilch on concerned citizens shutting down Topshop stores and the scandal of tax avoidance by the likes of Sir Philip Green and the implications it has for all of us in loss of public services. There was coverage on the BBC Radio 4 6pm news and midnight news but nothing on the main 10pm news. Brilliant coverage by Channel 4 News which once again puts BBC News to shame.

If you could not make it or there was not a protest near you there is still a lot you can do. Go into Topshop and slip a few leaflets into pockets, stick up a few posters in the changing rooms, re-arrange the clothes on the racks, take your purchases to the checkout, offer to pay when Sir Philip Green pays his taxes. But best of all, boycott Topshop!

There is a difference between style and fashion. Style is wearing what you look good in. Fashion is being manipulated into wearing what you look ridiculous in. Fashion is pointless consumerism which the planet cannot afford.

Every weekend until Christmas?

Sir Philip Green says he is doing nothing wrong, nothing illegal. Slave owners used to say something similar!

If Sir Philip Green and other corporate tax dodgers wish to trade in our country then they have to pay our taxes. Otherwise we close them down. Quite simple really.

You steal our taxes, we shut your stores!


UK Uncut

Tax Justice Network

Tax Research UK Blog

False Economy

Also see

The Winner Stands Alone

Shop a Scrounger

Why cuts are the wrong cure

Round up of this weekends Tax Dodger actions

Tax protests hit Topshop, BHS, Vodafone on busy shopping day

Topshop protests over Sir Philip Green’s taxes

Mayhem in Oxford St as protesters target stores including Topshop’s flagship branch over firms avoiding tax bills

We shut down the tax dodgers’ stores – and the shoppers supported us

Topshop’s flagship London store hit by tax protest

The day the teenagers turned on Topshop

Tax protest forces closure of Topshop’s flagship branch

UK Uncut targets Topshop and Vodafone over tax arrangements

UK Uncut targets Topshop and Vodafone over tax arrangements

Sir Philip Green should pay UK tax – Vince Cable

Sheffield Vodafone and Top Shop targeted in tax dodge demo

Oxford Top Shop targeted in tax dodge demo

Oxford St Topshop Shut in #Ukuncut Action

Anti-cuts day of action in Nottingham

Sheffield Occupation and Anti-Cuts Protest

Wood Green Tax Dodgers – Topman & Boots targeted

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