Monbiot’s tax take and the embedding of plutocracy: an urgent concern for Liberal Democrats
February 8, 2011 10 Comments
We are, it would appear, reaching a political watershed. There is perhaps a small window of opportunity to step back and consider where we think the country is heading. Then it could be too late. I was planning to post in response to George Monbiot’s article in today’s Guardian. But his post, coupled with other developments, raises some profound issues.
Monbiot’s article gives his take on the implications of proposals for what might, at first sight, appear technical changes to corporate taxation. But he argues plausibly – if rather hyperbolically – that the changes represent a major concession to the self-interest of multinational corporations. The net result of the changes will be to allow corporations – and banks in particular – to reduce their liability for UK tax considerably. And this is occurring, of course, at the same time as David Cameron is notably prominent in the media saying that the Government is committed to doing precisely the opposite – making sure that banks pay their share in order to help rebuild the economy.
There is, no doubt, a question of whether Monbiot has got the right end of the stick, not being a tax accountant. I subsequently read a post over on the Tax Research UK blog, which is broadly supportive of Monbiot’s reading of the situation. Even so, I’m sure there are technicalities that will continue to be debated.
A fundamental political issue is whether, regardless of any short term economic benefit it may deliver, the change in tax policy will trigger a competitive “race to the bottom”. Will countries seek to outdo each other in minimising the tax burden they impose, to the detriment of the majority who benefit from tax-funded public provision? No one except the most short-sighted would dismiss the prospect out of hand.
At the same time news appears (via the FT) of the Government’s proposals to relax the requirements upon super-rich immigrants. It is proposed that the rich should receive differential, and favourable, treatment. It will be easier for the super-rich to buy their way to residency. The price may well be the promise of several million pounds in ‘investment’ in the UK, but that is little more than loose change for the sort of households the government is hoping to attract. And this at the time when the visa rules for students and skilled and unskilled workers are being tightened up considerably.
Clearly this Government is even more intensely relaxed about people getting filthy rich than its predecessor. But unlike the misquoted, but not much lamented, Dark Lord, that position isn’t contingent on the rich paying their taxes. And great wealth buys political influence. It would appear that the Government has little intention of doing anything other than continuing to pander to the overly affluent. And here we need to distinguish quite sharply between words and deeds.
To return to Monbiot’s article, he put his finger on something that has been troubling me for a while. One of the problems I have with this government is the lack of transparency with which it represents what it is doing. Political hypocrisy is nothing new. But Cameron and Co seem intent on taking the art to a new level. It’s the nakedness with which it is perpetrated that is so distasteful.
To the extent that I remember the Thatcher era – being, as I was, a young lad at the time – my impression was that she had the courage of her convictions. Her government was willing to stand up and say something along the following lines: “this is what we’re going to do – you may not like it, but we’re going to press on anyway because we think it’s the right thing to do”.
We can contrast that with the way the current Government goes about its business.
We have a Chancellor who can insist he is being tough on the bankers, when in fact he is being nothing of the sort. Bankers dismiss a levy of £2.5bn per annum as not even an inconvenience. We have a health secretary who tells us that health reform is not in any sense about privatisation. When clearly it is. Out of the ‘any’ providers being invited into the system, I’ve an inkling which type is going to prove most willing. We have a push to the Big Society which is supposed to be about strengthening civil society, while multinational contract service providers are rubbing their hands at the prospect of capturing billions’ worth of additional business from cash-strapped local authorities. We have the double act of the Communities Secretary and Housing minister touring the TV and radio studios asserting that if only their chief executives took a pay cut and local authorities were more efficient in bulk buying paper clips then they won’t have to cut front line services. Yet anyone with a basic grasp of arithmetic can see that if that is a genuine attempt at a calculation then they are several orders of magnitude out.
If all else fails we have government departments responding to criticism and concern by resorting to bland assertions that “ministers do not believe that [extremely negative outcome] will happen”.
Monbiot captures this approach well when he concludes his article:
And this government? It has learned the lesson that Thatcher never grasped. If you want to turn this country into another Mexico, where the ruling elite wallows in unimaginable, state-facilitated wealth while the rest can go to hell, you don’t declare war on society, you don’t lambast single mothers or refuse to apologise for Bloody Sunday. You assuage, reassure, conciliate, emote. Then you shaft us.
The question is how much longer will Liberal Democrats remain complicit in this agenda. This is a question of the utmost urgency. Once these changes have been made and privilege becomes further embedded the political system will lose its leverage to redress the balance in future. We only have to reflect on the difficulties the US political system encounters in trying to overcome the influence of entrenched corporate interests when it seeks to formulate – let alone implement – policy designed to improve the lives of the disadvantaged. No liberal should need to be reminded that the concentration of power in the hands of any sectional interest is anathema to genuine democracy.
Two questions remain. What are we going to about it? Is it already too late?