Monday 17 March 2014

Valenomics – ideas for an “all in it together” economic policy



When I used to write a column for Your Thurrock, my local news website, the right-wing critics always used the argument that, while I highlighted the problems caused by the current ConDem Government, I never gave any solutions.  That wasn’t strictly true, of course, I did provide solutions, I just didn’t give fully detailed ones. 

The reason I didn’t provide fully detailed solutions was because, although I am observant enough to see the problems being caused and open-minded enough to not be taken in by the ConDem propaganda, I was never and will never be arrogant enough to claim that I had all the answers.  I have always been of the opinion that there are those who point out the problems and those who have the knowledge and skills to actually provide the answers.  I have also been of the opinion that no one person has all the answers and that provoking a debate to get many differing viewpoints is the best way of arriving at the solution; however, on this singular occasion, I have decided to have a go at putting forward some ideas for an economic policy for the UK.  They still aren’t fully detailed but they are a lot more detailed than any previous answers I’ve put forward in the past.

So here for your enjoyment and delectation are my ideas for Valenomics.

A brief look at the situation

Before we begin to look at my suggestions, we need to look at the situation the UK is in.

Firstly, the global financial crash caused by the ‘casino’ banking practices destroyed the economy with their reckless disregard for the consequences of their actions. 

Secondly, the banking sector has been suffering from a lack of regulation since the time of the previous Labour administration.  This meant that there was nothing in place to stop the ‘casino’ banking practices in the first place.

Thirdly, the level of public spending had grown to a large degree, leaving the UK with a deficit that needed to be paid back to whatever mysterious entity was responsible for lending the money to the UK in the first place.

Fourthly, there was a certain laxity in the collection of taxes from corporations and rich individuals who were able to evade paying taxes through using various huge gaping loopholes that whilst being totally legal were and are completely morally reprehensible.

The economy was in the tank and things were not looking good.

When the ConDem administration took power in 2010, they had already decided on a plan of action that they said would sort out the deficit within their five-year term of office.  This would all be fine if they had gone after the people who caused the financial crash in the first place, the bankers, those with the broadest shoulders to carry such a financial burden but the target of their austerity measures was to be the poor, the sick, the disabled and the disadvantaged and the services that they rely on.

Under the fallacious statement that the austerity measures would ensure that “we are all in it together”, the Conservative led Coalition got out their scalpels and started hacking away at the various Government department budgets but the brunt of the attack was felt by the lower end of society’s social ladder when the welfare budget was hacked to pieces and the so-called ‘reforms’ kicked in.  The wealthy individuals and corporations were left untouched by the pain being felt by the voiceless majority.  Some have even prospered during this time of supposed economic stringency.

Loopholes through which corporations and individuals managed to evade tax were left untouched, some would say because there are many in the current Government who actually use those self same loopholes to continue evading tax.  Services started to become squeezed as their budgets became smaller as more and more money was funnelled into trying to pay off the deficit but the wealthy, many of whom are members of the Government, were untouched by the devastation being caused.

It is also a dark reminder of the injustice in this country that some large businesses who conduct business in the UK receive more money in Government subsidies than they pay in Corporation Tax.

Many vulnerable citizens were left even more vulnerable with their benefits getting slashed to pay for a mistake not of their making and some of them even died at the hands of a cruel system being reshaped to supposedly “make work pay”.  Jobs were taken from the job market, creating more unemployed, only to be filled by unemployed people being forced to work for nothing but their meagre welfare income, a new slave class.

The slave class allowed major businesses to cut their wage bill and increase their profits whilst slapping their former employees around the face with that fact.  And the rich got richer and the poor got poorer.

Living standards dropped like a stone and continue to do so whilst the cost of living rose, driving every kind of poverty through the roof where, during the final days of the Labour administration, those levels were falling.  Food banks became the only growth business in this shattered economy, an economy made all the worse by the Coalition’s insistence on cutting too hard and too fast.

As if things weren’t bad enough for the poor, those in social housing and claiming Housing Benefit, were to be hit by the unjust Bedroom Tax which equated to a significant loss of benefit for each ‘spare’ bedroom, regardless of the use it was being put.  Again, the Bedroom Tax was hitting the lowest strata of society whilst the rich got away scot free.  A sign of the times was that, for the first time in history, in-work poverty outstripped poverty amongst workless household; hardly making work pay.

Any pretence at being “all in this together” disappeared when the rich got tax cuts as the poor suffered even with the small carrot of the personal allowance being raised slightly, taking some people out of taxation.

Retail sales were down as people struggled to make ends meet and the economy that had been showing signs of recovery in the dying days of the Labour administration slowed to a crawl.

One of the cruellest blows was the closing of Remploy factories that employed disabled people who were now thrown onto the scrapheap to claim benefits that were being cut or made so difficult to qualify for that they lost a large part of their income.

Although signs of economic recovery are supposedly being seen, the living standards and hardship on the lower strata of the societal ladder are getting gradually worse whilst the rich prosper.

Valenomics

The way that the economy is being handled is extremely prejudiced against the poor and disadvantaged and certainly shows that we are not “all in this together” but there is a way that things could be made fairer and still improve the economic situation in the UK – Valenomics.

The problem as I see it is that UK society has become increasingly split into two sections – the rich and the poor.  This has always been the case to some extent but the situation has been made much worse by the current administration.  The rich are not, as they should be, carrying their fair share of the burden for the repaying of the national deficit so we must first look at the methods for redressing this balance.

It seems only right that our leaders, who have continually stated that we are “all in this together”, start to lead by example so the first rule of Valenomics is:

No wages or expenses to be paid to Members of Parliament with a personal fortune, personal savings or personal investments that amount to £1million or over and/or have lucrative second jobs.

This seems reasonable to me and the money saved can be put back into the welfare system that is being so devastated by the austerity measures.  It won’t solve the welfare shortfall but will help some people and it ensures that Members of Parliament are sharing the pain of the cuts.

But what about the bankers who caused the financial crash and have gotten away scot free?  Fear not, dear reader, I have considered this and duly present the next rule of Valenomics:

Legislation to be put in place to force bankers to relinquish any and all bonus payments they receive to create a fund to help build up the UK’s manufacturing industry.

Again, this may not amount to much in itself but will provide the foundation of a fund to help give Britain the chance to start to rebuild the manufacturing industry that the Thatcher/Major Conservative administrations decimated in favour of a reliance on the banking industry.  If the money was able to help start up even a single manufacturing company, jobs would be created and money would start to be paid into the tax system by people currently taking money out of it.

And we mustn’t forget to punish those bankers who continue to play fast and loose with other people’s money:

Harsh financial penalties levied against bankers whose banks lose money, especially those financial institutions bailed out by the State.

The penalties can be put back into the nation’s coffers or added to the fund mentioned above.

The bankers won’t get away with just the loss of their bonuses though as we now look at the measures for making sure the wealthy individuals and corporations contribute towards the finances of the State.

We start with the Valenomics rules for tax evaders.

It’s wrong that for-profit companies get more money from the UK than they contribute to it so:

There will be no subsidies paid to medium to large corporations who conduct business in the UK but evade paying Corporation Tax in this country.

The money currently used to subsidise such companies can be ploughed back into the nation’s coffers or added to the fund to rebuild the manufacturing industry.

Legislation will be introduced that will seek to close all methods of tax evasion, whether personal or corporate.

And it’s time to punish the tax evaders so:

Ruthless prosecution of tax evaders with harsh custodial sentences (all to be paid for at the tax evader’s own expense).

Of course, not all wealthy people are tax evaders but they must still carry their fair share of the burden for repairing the economy so:

The institution of a Mansion Tax on properties costing £1million or over.

I haven’t considered the amount of tax to be levied on such properties but I’m sure a reasonable amount can be worked out.

It seems only right that we occasionally offer a carrot to the rich to pay their taxes so:

The top rate of Income Tax to be set at 50p for high earners with early or prompt payment of Income Tax to be rewarded by a reduction of the rate to 45p.

However:

Harsh financial penalties to be levied against individuals for late payment of tax.

There is a great injustice being perpetrated at the moment against people in social housing and claiming Housing Benefit and that is the penalty for having what the Government considers to be too much living space – the dreaded Bedroom Tax.  The question is – if the Government is truly applying the Bedroom Tax as a way of saving money, why not generate money by applying it to everyone?  This would seem to be an ideal way of addressing the ecological concerns of a growing population with a lack of available living space as well as ensuring that no one has more living space than they actually need.  This is fair and equitable to everyone.

Therefore:

The Bedroom Tax is to be extended to all properties and all individuals with the money generated redistributed to other budgetary areas.

The Bedroom Tax deducted from Housing Benefit claims can be ploughed back into the welfare budget whilst the charges levied on non-benefit claimants properties can be used elsewhere. 

Of course, that only really solves the problem of ‘spare’ bedrooms.  What about huge houses with loads of extra rooms?

Excessive Living Space Charge to be levied on large properties and added to that property’s Council Tax bill.

Of course, we have to consider what the correct amount of living space for the various types of households in order to calculate the Excessive Living Space Charge is.  It seems only fair that we use the current Government’s basic idea that they use for applying the Bedroom Tax although I’m slightly more generous to couples.

Living Space Allowances
Single
Couple (no children)
Families




Living Room
Kitchen
Bathroom/Toilet
1 Bedroom




Living Room
Kitchen
Bathroom/Toilet
2 Bedrooms
Living Room
Kitchen
Bathroom/Toilet
plus


1 Bedroom for up to 2 children of same gender



or
1 Bedroom for up to 2 male children
and
1 Bedroom for up to 2 female children

and 1 Multi-purpose Room
for every 2 children

I am open to changing these allowances a little with regards to families because I have no real idea of the complete needs of a large family but, whatever the final decision on these are, there will be no exceptions.

If you don’t want to be hit by the Bedroom Tax or the Excessive Living Space Charge then you always have the option to move – exactly as the people currently being hit by the Bedroom Tax have.

Although I love the idea of universal benefits, the current Government have already made moves to take benefits away from the poor that they themselves have claimed in the past so I think to redress the balance here we need a new Valenomics rule:

Universal benefits to be withdrawn from individuals/couples/families based on means-testing and household income if above a certain level.

Again, I haven’t thought about the actual level above which the universal benefits should be withdrawn but we do have to start cutting the benefit bill somewhere and we can’t hit the poor, sick and disabled as that just wouldn’t be nice.

And just to make things perfectly clear:

Pensioners will not be exempt from the above rules.

Of course, we are just bringing in a little extra revenue and perhaps saving a little of the expenditure on benefits at the moment but what we really need is to kick start the economy and the way to do that is to get people buying, creating jobs and lowering living costs for the low paid.

I have some bad news for the low paid workers of the UK here because we need to make sure that current employers can still keep their staffing at current levels and make it economically viable for new businesses to hire enough new staff so:

There will be no increase in the National Minimum Wage or the setting up of a National Living Wage.

However, if that is to be the case, we need to make sure that the cost of living is manageable for the low paid and those on benefits so:

Legislation will be introduced to force businesses to reduce the profit margins on their products and/or services to between 5 and 10%.

Some may say that this is madness but companies regularly make millions in profit by gouging their customers so it’s time to give a little back.  Lower profit margins won’t be a problem because what a company loses in profit on individual items will be made back in the sheer bulk of sales.  This is simply taking the notion of the way supermarkets use sale items to attract business by drastically cutting the normal price knowing that the increase in sales of that particular line will offset the reduction in the individual item profit margin and applying it to the entire stock.  This is why the National Minimum Wage isn’t being increased and why a National Living Wage would not be put in place.

This reduction in across the board profit margins doesn’t have to be a permanent measure and could be repealed in better economic times.

As we already have a kind of two-tier divide amongst supermarkets and other retail stores, it seems ridiculous to not use that dividing line between the high cost range stores and the lower/medium range stores.

The abolition of the Manufacturer’s Retail Price and the Recommended Retail Price to be replaced with Maximum Retail Prices in lower/medium cost range retail outlets.

High cost range retail outlets are exempt from the Maximum Retail Price rules and can charge whatever they wish but will be subject to a Minimum Retail Price.  The Minimum Retail Price at these retail outlets will be significantly higher than the Maximum Retail Price charged at lower/medium cost range stores.

Severe financial penalties will be incurred by retail outlets that break the Maximum Retail Price or Minimum Retail Price rules.

It would certainly be in the interests of all retail outlets to adhere to the rules outlined above so that they don’t incur penalties which will wipe out any profit they might make and may certainly end their business.

To further lower the cost of living and to encourage people to go out and buy things:

VAT would be reduced to 15%

VAT would be abolished on groceries and household goods that are currently subject to the tax.

We also need to consider the cost of renting a property in the private sector the price of which can be prohibitive and costly in terms of the amount spent on Housing Benefit if those tenants fall on hard times so:

Legislation to be introduced to put a maximum price cap on rental prices in the private sector. *Regional variations apply

This will aid those people who need to downsize to avoid paying the Bedroom Tax and/or the Excessive Living Space Charge, create a fairer market for tenants and make sure that property developers are feeling the pain of these economic times.

Well, we’ve lowered living costs and got people buying things but we still need to have a bit of a business boom to help the economy and get people into work.  And I’ve considered that as well.

During this current administration, disabled people have lost jobs in specialised workplaces due to the closing of a number of Remploy centres.  These people who were gainfully employed and paying into the system ended up on the scrapheap and on benefits, the complete opposite of the Government’s intended aim of getting people off of benefits and into work and “making work pay”.  The reason given was that the centres weren’t profitable but here’s an idea for you to mull over:

Set up Remploy printing and reprographic businesses to fulfil Government stationary and reprographic contracts.

This would not only provide employment for disabled people, getting them off benefits and into work but would reduce the costs on the current stationary and reprographic needs for the Government.  The Remploy centres could also supply to charities thus reducing the running costs for the various charities.  How’s that for the Big Society?

The Government could also help businesses to start up or expand with the following idea:

The Government to seize currently empty industrial sites and offer the buildings therein free of charge to existing British small businesses for expansion and to British start up businesses fulfilling a need in sectors currently controlled by foreign companies.

Offering free buildings will cut down the costs of expansion or setting up a new business making it easier for potential employers to hire more staff and increasing the Income Tax revenue.

The Government needs to invest in British manufacturing again and to reward innovation so:

Provide subsidies for businesses offering profitable innovative or unique products or services that are made or provided by British companies.

Providing subsidies to British companies will start to help rebuild the manufacturing industry as well as possibly helping the UK become the heartland for innovation in any number of areas.

But the Government shouldn’t forget about the need to remain a player in the global marketplace so:

Offer incentives to foreign businesses willing to operate in the UK and pay Corporation Tax to the UK as well.

As you can see, I have no intention of cutting foreign companies out of the UK but, if they want to come here and profit from the country, they should be willing to pay into the country too.

Finally, we return to the bankers who really need to start to repay their debt for causing the financial mess the UK is in and they can do that very simply.

Banks to offer preferential loan rates for existing British small businesses to help them expand and to British start up businesses who fulfil a need in the manufacturing or other sector currently controlled by foreign companies.

So that’s my ideas for an “all in it together” economic policy.  Everyone suffers to some degree and everyone benefits to some degree.  I’m sure that there are things I could have added and I’m sure that there are going to be things that just wouldn’t work but at least I gave it a good old college try.

Sunday 16 March 2014

Just letting off a little steam



I just need to let off a little steam right now if for no other reason than to try and make myself feel a little better.

I’m really pissed off that, for all the good I’ve tried to do since I became unwell, people have decided to turn their backs on me. 

Since the 2010 General Election, I have tried to stand up for the people hit by the cuts to the welfare budget and the associated so-called ‘reforms’ despite having been unaffected by them personally.  I have been an opponent of the welfare ‘reforms’ not because I don’t like the Tories or because I’m a left-winger but because it’s been the right thing to do.  Anyone with an ounce of social conscience or plain humanity would have done the same, yet I have been labelled a left-winger by the politically right-wing supporters, attracted a vast amount of abuse for my highlighting of the inequality fuelled by the current UK Government and their discriminatory and illegal practices and have found myself an outcast.

Now I am facing my own struggle to survive as I am about to be personally affected by the welfare ‘reforms’ and budget cuts but it seems as though there is no one there to help me.  Soon I won’t have the money to feed myself, how bloody ironic.

I have tried to educate social worker students in the subject of mental health from a service user perspective and give them the practical skills they need to function successfully in their chosen field, yet I have had my efforts thrown back in my face by a vocal but rather childish minority.  It seems ironic that some of those students who have so horribly and cowardly attacked me and should not really be allowed out in the field with such attitudes are probably some of the students I helped successfully pass the module that will allow them out into the field on their work placements.  How galling is that for me?

I even took a teacher training course to inform the work I was doing with the social work students and to improve the range of work I could look for as well as the level of my qualifications but now I’m no longer asked to be involved with the social work courses and the level of the qualification won’t exactly qualify me for much in the way of teaching jobs.  I probably won’t even receive my certification until I am either too sick to work or in hospital suffering from malnutrition or starvation.

For all the attempts I have made to improve my lot in life and to help others in my own small way, I have earned no respect, no friends and no miniscule improvement for my own life.  People who called me a friend have conveniently turned their backs on me now I am in need and I am met with stony silence from them.

I am not surprised by any of this really, just saddened that I am being abandoned by the people I have helped.  I am not exactly a fan of the human race because of the way I have been treated by so many of them in the past.  I have, however, always tried to help others, despite my personal inclination to remain apart from the rest of humanity, and feel that I have earned some reciprocity.  It seems, though, that the rest of humanity doesn’t agree with me.