|
24 November 2010 By Mike Marqusee Britain's
coalition government has embarked on an ambitious
programme of social engineering. The purpose of its
historic package of public spending cuts and "reforms"
is said to be the reduction of the fiscal deficit,
which rose sharply in 2008 and 2009 as a result of the
recession. But, as we shall see, the deficit is a
pretext. By a political sleight of hand masquerading
as economic necessity, wealth and power are being
redistributed in favour of the rich, whose deregulated
appetite for short-term profit triggered the recession
in the first place. Government
announcements have come thick and fast, each spending
cut, re-organisation or redefinition accompanied by an
ideological polemic (echoed across the media) in
favour of "personal responsibility", "individual
choice" and the virtues of the private sector. Despite
the rhetoric, it's not so much the "state" that's
being shrunk as the infrastructure of social
solidarity. Over the next
four years the government plans to cut £18 billion
from the welfare benefits bill, the vast bulk of which
is spent on the elderly, children, people with
disabilities and low-paid workers (not the largely
mythical "work-shy" adult). At the same time, it is
increasing the flat-rated, regressive Value Added Tax
from 17.5% to 20%, while slashing corporation tax from
28% to 24%. Not surprisingly, the independent
Institute of Fiscal Studies concluded that the new
tax-benefit regime was "clearly regressive", with the
poor loosing a much higher proportion of their income
than the rich. Severe cuts in
housing benefits and in construction of new affordable
housing will mean increased homelessness, higher
housing costs and more people living in temporary,
over-crowded or sub-standard accommodation.
Residential segregation will increase, with the
Chartered Institute of Housing warning that the poor
will be priced out of many towns and cities. A
spokesperson for Shelter, the country's leading
homelessness charity, said the new policies "will see
the door firmly closed on the aspirations of a whole
generation for decent, secure, affordable housing to
rent or buy." The highly
popular (and cost-effective) National Health Service,
the core and crown of the post war welfare state, is
also under threat. According to a source inside the
government, reduced spending will mean that in four
years time the NHS will be able to do "a fifth less"
than it does now. On top of that, the proposed NHS
re-organisation will fragment the service and
outsource many of its functions to the private sector,
with accompanying increases in administrative costs
and decreases in accountability. The quality of
patient care will diminish. The already marked
inequalities between income groups in life expectancy,
cancer survival rates and disability-free years will
widen. In education, the
government is pushing the formation of "academy
schools" which will be free of local government
oversight and open to private sector management. Over
the next four years, while investment is directed
selectively towards these schools, there will be
(according to the IFS) a real terms cut in spending
for 60% of primary and 87% of secondary school pupils.
According to the Department of Education, 40,000
teachers (about 10% of the total) will lose their jobs
and capital spending on schools will be slashed by
60%. Universities are
slated for rough treatment, with cuts in teaching
funds and a proposed near tripling of tuition fees –
which a recent poll shows may deter two thirds of
pupils from disadvantaged backgrounds from applying.
Science and arts funds face cuts of more than 30%.
Local councils, which provide a wide range of basic
services (street cleaning, swimming pools, libraries,
as well as care for children, the elderly and the
disabled), are being told to slash budgets by 25% or
more. And forget about the UK making any meaningful
contribution to slowing global warming: there will be
no significant investment in renewables or energy
conservation. Many of the
government's welfare "reforms" are aimed ostensibly at
getting people "off benefits and into work". Under
tough new tests on people claiming benefits for
disabilities recovering cancer patients and others
with serious physical limitations are being deemed
"fit for work". But where are the jobs? Already one
million disabled adults are seeking work but unable to
find it. Unemployment
currently stands at 2.5 million, 8% of the workforce,
a figure that understates the work-shortage because it
does not include the 1.5 million forced to work
part-time. By its own admission, the government
intends to shed about 500,000 public sector jobs. An
additional 600,000 private sector jobs directly
dependent on public spending will also go. It's
claimed that these losses will be compensated for by
private sector growth, but since the private sector
created only 570,000 jobs in the entire decade prior
to the recession, when GDP growth was stronger than it
is likely to be in the coming years, this is mere
fantasy. As unemployment and under-employment
increase, wages, conditions and security for those in
work will deteriorate. The benefits bill will rise and
with it the much-dreaded deficit. The UK already
has a higher proportion of its population (22%) living
on low incomes than 21 of the 27 other EU countries.
The extra money generated during the years of growth
went overwhelmingly into the pockets of the top 20%,
who now receive 51% of total national income, while
the poorest 20% receive a mere 5.5%. As a result of
increasing inequality, Britain has fallen in recent
years to 26th place in in the UN's Human Development
Index, behind not only Germany and France, but also
crisis-stricken Greece, Spain and Ireland. If the
government gets its way, poverty and inequality will
grow more acute, living standards for the majority
will decline, and the UK's HDI ranking will plummet
further. A small but
powerful minority does stand to gain from all this
pain. The pharmaceutical companies, for example, will
rake in extra billions as a result of the government's
decision to marginalise the body charged with ensuring
cost-effectiveness in NHS drug purchases. Outsourcing
and privatisation in education, healthcare, welfare
and the post office will open avenues to vast private
profiteering, largely risk-free and tax-payer
subsidised. In the first five months of its existence,
the government paid out £3.3 billion (more than the
Department of Energy and Climate Change receives in a
whole year) to a single firm, Capita, for undertaking
previously in-house government functions. Meanwhile,
the banks, saved from collapse by the public weal,
remain unreformed: paying themselves £7 billion in
bonuses this year (which happens to be the amount
required to abolish university tuition fees
altogether). While benefit
fraud costs the public £1.5 billion a year, tax
evasion costs £70 billion a year and tax avoidance
another £25 billion, totals that will rise because of
cuts in Customs and Revenue staff. If one third of the
missing billions were collected each year, the deficit
could be closed over five years without cuts. But we are told
that if we ensure the rich pay a fair share of taxes,
they will all leave the country, and if we fail to
make the cuts, the markets will pull the plug on us.
Let's leave aside, for the moment, the fact that the
structure of the UK national debt (largely long-term,
low yield and domestically held) is quite sustainable,
and forget also that Ireland's 12.5% corporate tax
rate did nothing to protect it from the ravages of
recession. This attempt to coerce the majority of
Britons into making sacrifices from which a small
minority benefits raises fundamental questions about
the purpose and direction of our society. The
implication is that we must acquiesce to a perpetual
dictatorship of the rich, that we are forbidden from
disposing of the wealth we collectively create
according to our collective priorities. Of course, the
government presents the rich as the wealth creators,
but this is a myth, our version of believing the sun
revolves around the earth. The overall
impact of government policy will be to make the rich
richer and more secure and the rest poorer and less
secure. The damage will take generations to undo. This
is the real threat to civilisation in Britain, not the
immigrants, Muslims or "benefit scroungers" targeted
by politicians and the media. |
Add Comments