Tag Archives: tax rise

Nearly 60,000 dead in UK because of Covid-19 – and Johnson wants to penalise healthcare staff

Read it and weep. First the bad news:

The image above is (according to Chris Giles – economics editor of the Financial Times – on Twitter) a cautious estimate of the number of excess deaths in the UK.

He says the total – as of yesterday – was 59,700. Of these, 51,000 have happened and 8,700 are estimates bringing the official data up to date using evidence from hospitals.

That’s nearly twice as many as the 32,000 or so claimed by your Tory government. And even that figure is appalling because the Tories should have ensured our health service was prepared for it, and didn’t bother.

His report in the FT states:

The official figures from the UK’s statistical agencies are much higher than the daily announcement from the Department of Health and Social Care, which stands at 32,065.

The FT model now estimates that slightly more than 60,000 more people will have died than normal from the start of the outbreak to May 11, based on the excess deaths to date and the latest daily figures from hospital deaths.

At present this is the highest absolute level of excess deaths in Europe, although figures for Italy are not yet comparable because they are only available to the end of March.

Now the ugly news:

Your Tory government is considering freezing the pay of public sector workers – that means doctors and nurses among all the others – in order to pay the £300 billion cost of the coronavirus crisis that its MPs could have prevented if they had made the proper preparations for it over the last few years.

Other proposed measures include tax hikes – so doctors and nurses will be doubly-hit – and a raid on the national pension fund.

Here’s The Independent:

A confidential treasury assessment cited by The Daily Telegraph is reported to say the UK’s deficit could reach heights of £337bn this year due to the government’s attempts to keep the economy afloat during the crisis.

The paper added that the government document said measures including income tax hikes, a public sector pay freeze and the end of the triple lock on pensions may be required to fund the debt.

Proposing to end the triple lock, a guarantee to increase to the state pension every year based on whatever is highest out of inflation, average earnings or a minimum of 2.5 per cent, has proved controversial in the past – with many citing it as a catastrophic moment in the run up to Theresa May’s underwhelming 2017 election performance.

And a freeze to the public sector pay – potentially impacting the healthcare workers who have been on the front lines of the response to the virus – is also likely to cause consternation from the public and across the political spectrum.

How do you feel about this plan by the Tories to make healthcare staff and pensioners pay for the Tories’ mistakes?

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‘Budget responsibility’ debate makes even Taxpayers’ Alliance look cleverer than Tories and Greens

George Osborne's plan to put you into debt: He wants you to be spending nearly two times more than you earn, so he can balance his books. What a (insert your own expletive here)!

George Osborne’s plan to put you into debt: He wants you to be spending nearly two times more than you earn, so he can balance his books. What a (insert your own expletive here)! [Image: Huffington Post.]

They were lining up to make fools of themselves after last night’s debate on the ‘Charter for Budget Responsibility’.

The Tories, of course, didn’t have to wait until after the debate – the fact that it took place at all made George Osborne look like an idiot. He had dismissed plans for a Labour-sponsored fiscal responsibility act as a “completely feeble stunt” back in 2010, but last night laid himself wide open to accusations that he was doing exactly the same thing.

In fact, it seems, he was trying to lay a “deficit trap” for Labour, in trying to get the Opposition party to explain how quickly it intends to balance the books.

No dice. Labour was quite comfortable with the charter, pointing out that it sets no date for the elimination of the national deficit but merely puts it in the third year of an undefined ‘five-year cycle’. The strongest words on the subject in the charter are that the books should be balanced “as soon as possible” which, Labour pointed out, is entirely consistent with the party’s own strategy.

In addition, as the Institute for Economic Affairs thinktank pointed out in the Huffington Post, no government can bind its successor (force it to continue a policy run by the previous administration). This means that Labour has supported a bill that conforms with Labour plans, and remains free to carry out those plans in whatever way it chooses, post-May 7, if it wins the election.

Shadow chancellor Ed Balls was so sure of his ground, he quoted an assessment of Osborne’s debate by the right-wing, reactionary Taxpayers’ Alliance, whose chief executive Jonathan Isaby labelled it a “meaningless political gimmick of the most transparent kind…that serves only to remind taxpayers how dramatically the Chancellor has missed his own original target”.

It isn’t often the Taxpayers’ Alliance turns out to be more intelligent than the rest, so let’s give it its due in this instance.

Claims are already circulating that Labour’s plans, which allow for borrowing to continue on infrastructure projects – investing in the economy, could add an extra £170 billion (in today’s terms) to the deficit during the 2020s. This assumes that such investment will yield no positive benefits to the economy, and there is no evidence that this would be the case. In fact, experience suggests the exact opposite.

An extra £170 billion of spending won’t matter one jot if tax receipts increase by more than that amount.

Ed Balls knows this – and said as much in the debate: “Three factors can bring the deficit down: spending cuts, decisions to raise taxes, and what happens to the underlying growth of the economy and the tax revenues which flow from that. The Chancellor did not talk about the third factor, for understandable reasons.

“Ultimately, the only way of reversing the problem is yes, to cut spending, and yes, to raise taxes… but also to get the economy growing in a stronger way which will bring in tax revenues.”

You see, while the economy is (technically) growing again, the jobs that have been created are in low-paid, often insecure work and there is lower productivity. As a result, income tax receipts are a cumulative £68 billion lower than Osborne’s 2010 forecast, and national insurance contributions are a cumulative £27 billion lower than he planned. But this was always going to happen with a Tory chancellor.

Tories always try to depress wages, in order to maximise profits for business owners and shareholders who vote for them. This means that income tax must fall, yet – bizarrely – they always seem surprised when it happens.

The fact that Osborne’s low-wage economy means more working people receive benefits is another cost burden for the Treasury. Labour, of course, plans to eliminate this by getting workers onto a living wage.

Osborne’s own plans would cut government spending – mostly on the kind of wealth redistribution that allows the poorest and the working-class to enjoy a reasonable standard of living – by around 26 per cent, totalling a massive 41 per cent since 2010, if a Conservative government is returned in May.

In addition, he is relying on a £360 billion borrowing spree by UK citizens, according to the Office for Budget Responsibility – which will leave households with an amount of debt 180 per cent larger than their income (see the image at the top of this article).

Just think about that. Back in 2010, he was comparing the national debt to households having ‘maxed out’ all their credit cards. That was when the debt totalled 78.4 per cent of GDP (the amount of income the nation generates every year). Why is he now saying that households should take on a burden that is proportionally more than twice as large?

Of course the comparison between national and household budgets is pointless because they do not correspond with each other, as Green MP Caroline Lucas pointed out in yesterday’s debate. Unfortunately she then went on to make a fool of herself by claiming, on Twitter, that the 18 MPs (including herself) who voted against the charter are the only MPs who are against austerity. If she knows enough to point out the difference between national and household budgets, she should know that this is inaccurate – therefore this was a direct lie to the electorate.

The effect of all this bluster – especially on Twitter last night – must be similar to the proverbial turkeys queuing up for Christmas. If anybody still wishes to tell us all that Labour’s plan for economic growth means the party avidly supports austerity, let us look forward to their detailed and clear explanation.

Based on current experience, we may be waiting a long time.

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Anti-Labour campaigners, get real; supporting the OBR charter isn’t supporting austerity

150113milibandalternative

It’s amazing, the lengths to which some people will go in order to discredit someone else.

As this is being written, Twitter seems abuzz with claims that Labour has finally admitted its full support for austerity because it has supported the latest updates to the Charter for Budget Responsibility.

The charter commits the government to a goal of balancing the structural deficit by 2017-18, and to ensuring that debt is falling as a percentage of Gross Domestic Product (GDP) by 2016-17.

According to the BBC, “The Treasury says that to meet these targets a new government would have to make additional tax rises or spending cuts of around £30bn – more than Labour plans.”

But Labour has supported the targets, saying they match its plans to eradicate the current deficit “as soon as possible” in the next parliament.

That’s why, at the vote, only 18 MPs opposed the changes. Anti-Labour campaigners on Twitter hastened to flag these people up as the only anti-austerity MPs in the House – possibly because they included Green MP Caroline Lucas, and the Green campaign seems to hinge on painting Labour as a party of right-wing neoliberals.

Silly, silly people.

You see, tax rises or spending cuts are not the only options available. They never were.

What about economic expansion? Ed Balls has been trying to tell the world that Labour intends to create an expanding economy in which the UK can pay its way. Martha Kearney might have cut him off on November 10, but that didn’t stop him saying it.

Remember, this is how Labour set the UK on the road to recovery – real recovery – after World War II. We had 30 years of expansion before Margaret Thatcher and her stupid, selfish neoliberals messed it up for 30 pieces of silver.

It cannot be by chance that Ed Miliband referred to that success in his New Year message.

Link this expansionary economic strategy with other plans, such as those for progressive taxation – ensuring that those who can pay, do pay – and suddenly we’re not looking at austerity at all.

Labour will stick to spending plans for 2015-16 because it would take a while to release the UK government from existing contracts. But that isn’t proof of a commitment to austerity either.

The difference is huge. In the BBC article, Institute for Fiscal Studies director Paul Johnson said “Under the Autumn Statement plans, Conservatives could be cutting unprotected budgets by 26% after 2015-16 – or an extraordinary 41% over the period from 2010.

“Labour would need to implement cuts of just three per cent.” And that’s without the benefit of an expanding economy.

The cynics and manipulators have their own agenda – and it’s not about helping you.

So let’s not rush, open-mouthed and wide-eyed, to believe them.

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