Tuesday 30 October 2018

Hammond Delivers Pothole Budget for the UK Economy

The £420 million for potholes that Philip Hammond, the Chancellor, announced at yesterday’s budget, was his best gag in the whole 71 minute budget statement to Parliament. The real jokes, by contrast, were painfully lame. But the pothole money is a neat metaphor for the UK economy, in that it is a patch up of the nation’s economic policy, meant to see the country through until next year’s spending review.

A perfect example is the extra £650 million for social care, which is to fill in the hole in this funding for this issue for the next twelve months, until it is sorted out permanently at some stage in the future. The government has promised a Green Paper on funding social care but it has yet to materialise, with an expected date of launch before the end of this year. Last year’s hole filler was to raise council tax, but this can’t really be repeated year on year. Big decisions are being put off.

There was some welcome news in extra, mainly future, funding for the NHS and the ending of new Private Finance Initiative deals for public sector contracts, but that’s about it.

Other fiscal measures in the budget only undo the damage caused by the government’s austerity agenda, like the extra funding for Universal Credit, roughly the amount cut from the scheme by George Osborne when he was Chancellor. Many Tory MPs had pressed for this, so Hammond was keeping them happy, whilst having a dig at Osborne.  

An increase in income tax personal allowances, worth only about £130 per year to basic rate taxpayers, probably less than £10 per month once National Insurance contributions are factored in. Higher rate payers will gain around £860 per year, less National Insurance contributions. More money for those who don’t really need it, and less for those who do, it is typical of this Tory government.

In total, 84% of the income tax cuts announced on Monday will go to the top half of the income distribution next year, rising to 89% by the end of the parliament.
But what of the end of austerity, that the Prime Minister, Theresa May announced at Tory party conference? Well, the budget falls way short of this. Funding for government departments will at best flat line, outside of health, so cuts to public services will continue largely unabated throughout 2019-20.

What Hammond did say was that ‘the end of austerity is in sight,’ but only if you have a telescope, as he said this will not be until 2024. Not even a case of jam tomorrow, but jam in five years time, perhaps, if Brexit doesn’t cause the UK economy to go into recession. That would mean fourteen years of austerity inflicted by the Coalition and full blown Tory governments. By which time public services if they exists at all will be basic and geographically variable.

So, austerity is set to continue, with only a slight softening of the impacts generally. The Tories know that the public is getting very weary of the austerity agenda, so their rhetoric hints at ending it, but their actions say otherwise. This is because austerity always was an ideological choice for the Tories, to cut the public realm and reduce the size of state to only minimum proportions.

There will need to be tax raised in the future to pay for adult social care, one way or another with a rising ageing population, but outside of health and care, all other services will continue to be cut, including a further £1.3 billion from local authority funding. Public sector employees will continue to get below inflation pay rises whereas high earners will continue to reward themselves often for failure and pay less tax on their increased incomes.

Of course, we may well be shut of this government before 2024. There needs to be a general election by 2022 at the latest, and the way things are going it might come a good deal earlier than that. It can’t come soon enough.

Sunday 28 October 2018

Ecosocialists Believe the Only Way to Stop Climate Change Is to Abandon Capitalism

Written by Kaleigh Rogers and first published at Motherboard

We earthlings have had to swallow some hard truths lately. The impending impacts of climate change, and just how far we are from meeting our goals to stop them, have been brought into crisp focus by not only major, intergovernmental reports but also the slew of dramatic weather events around the globe.

It can be easy to feel hopeless, like there’s nothing we can do to stop our species from obliterating the planet as we know it in less than a generation. But there’s one sect of people who think they have the answer and, if everyone would just get on board, could easily curb the effects of climate change. It’s called ecosocialism, and it’s exactly as radical as it sounds.

“Ecosocialism combines the ideas of ecology and socialism, meaning that you have a society without class divisions that lives in some kind of harmony or balance with nature,” Victor Wallis, author of Red-Green Revolution: The Politics and Technology of Ecosocialism, told me in a phone interview . “You can’t make the decisions necessary for the health of the environment on the basis of profit calculations.”

Ecosocialism first began to spread in the 1980s alongside environmentalism, though some scholars argue that the roots of this movement trace back to Karl Marx’s theories. The concept is basically that environmental protection is incompatible with capitalism, and the best (or, some would argue, only) way to fight climate change is to move towards a socialist society. Capitalism is always going to be driven towards producing and consuming more and more, which is a big part of how we got in this pickle to begin with.

Though proponents of the movement have trouble detangling the two ideologies, the overlap may not be immediately apparent to everyone. After all, there are profits to be made from the fight against climate change: think of renewable energy or electric cars. These industries don’t exist out of some corporate altruism, they exist because they’re profitable. And they’re growing rapidly—in 2017, more than 500,000 new jobs in renewable energy were created around the world, bringing the total number of people employed in the sector to 10 million, and $335.5billion of new investments were made in the industry.

But ecosocialists argue even if some parts of capitalism can advance an environmental agenda, the rest of the market will still be working against it, and we’ll never get where we need to be.

“Unless you do away with capitalism, you’ll still have the other companies that are much more influential and bigger in scale, like oil companies,” Wallis said. “There is ultimately a clash in the wider scheme of things, even if you have one sector of a capitalist market that responds to people’s concerns about the environment.”

The other aspect of socialism that Wallis says meshes well with environmentalism is leveling the playing field. You may not like that your job at a coal mine contributes to climate change, but you still need to feed your family and pay your bills. If we could flatten out class structures so that was no longer a concern, more people would be able to participate in the changes we need to make.

But what does an ecosocialist society even look like? Do we all live in vertical farms together, sharing crops and riding bicycles to power our light bulbs? Eric Holthaus, a meteorologist, reporter, and ecosocialist, told me it doesn’t have to be that dramatic of a shift.

“It’s not going to require everyone giving up all their possessions and living on a farm for the rest of their lives,” Holthaus said in a phone interview.

Holthaus argues that we have the technology to rapidly switch to a world that runs on carbon-free energy, but that won’t happen in the current structure because it doesn’t benefit those already at the top. He pointed to the fact that studies have shown just 100 companies are responsible for 71 percent of the world’s greenhouse gas emissions. If we created a government willing to strictly regulate these companies, it would make a drastic impact and open the door to a clean energy future.

This all sounds peachy, but it also sounds impossible, especially under the current climate-change-denying administration in the US. It doesn’t seem likely that we could make such a massive global shift in enough time to slow down this runaway train of destruction. While Wallis largely agreed, quipping that even though it’s highly unlikely, it’s “our only option,” Holthaus was a little more optimistic.

“Think of 30 years ago: 1988 was a very different world,” he said. “The example I always go back to is gay marriage. At one point, it felt impossible. It felt like an issue we would never change. But with a lot of people working behind the scenes and very publicly for decades, the political world switched within just a few years.”

Holthaus thinks we can see similar switches with climate change, as more people become aware of the dire straits we’re all in and decide, y’know, we’d like to stay on this planet for awhile.

And it’s not just a fringe movement. The US Green Party has embraced ecosocialism as a core tenant of its platform since 2016. Democratic socialism has seen a surge in popularity this year, including the election of Democratic Socialist Alexandria Ocasio-Cortez, who ousted a 10-term incumbent for a congressional seat in New York this summer. The Democratic Socialists of America organization has also adopted the ecosocialism philosophy and has an ecosocialism working group.

It reaches beyond the US, as well. In the UK, Labour Party leader Jeremy Corbyn has been an outspoken advocate of an ecosocialist approach to climate change.

Regardless of how tightly you subscribe to the notion of ecosocialism, both Holthaus and Wallis recommended getting out and getting active. Find like minded individuals, groups, and political parties, get organized, and start living in a way that will make this kind of transition easier. Though it may not be a panacea, at this stage in the game, I for one am happy to explore any idea that people believe will bring us back from the brink.

“I think it’s possible to have the world that we want and the world that we need to have,” Holthaus said. “I want to believe that that’s true.”

Friday 26 October 2018

Does Anyone Believe a Word Theresa May Says?

It would be comical if the UK government and prime minister were not such a shambles at the moment, at this crucial stage for the country. As we approach what is probably the most critical period for Britain since the end of world war two, Theresa May appears to have no idea as to how to look after our interests, and to make matters worse, she seems to think she can just bluff her way through as the impending national crisis looms. She is making it up as she goes along.

It is now more than two years since May succeeded David Cameron as leader of the Tory party and prime minister. Cameron wasn’t a hard act to follow, as he whistled his way out of public life after setting in motion events that have led to this pass. Lazy, dripping with privilege and arrogance, it should have been easy to impress by comparison, but May has flunked it.

Yes, she was dealt a difficult hand with the result of the Brexit referendum, but she has played it all wrong, with a series of strategic mistakes. The country was crying out for someone to bring us together, but May just furthered the divide with her ill judged rhetoric and no discernible plan. She triggered Article 50 before she had decided even remotely how we will leave the European Union (EU).

May attacked the 16 million remain voters as ‘citizens of nowhere,’ insisted that 'no deal is better than a bad deal’ and failed to give guarantees to the 3 million EU nationals residing in the UK , that they would be allowed to stay here. Even Brexiters like Michael Gove said that giving such a guarantee would be ‘the decent thing to do'. No they were held as bargaining chips in the opening round of negotiations which inevitably led to a lack of goodwill on the part of the EU.

Then May called a snap general election, after previously ruling it out, pursued the hardest of Brexit language during the campaign, and promptly lost the Parliamentary majority that she had inherited from Cameron. To salvage something from the disaster May was forced into bribing the bigots of the Democratic Unionist Party to cling onto power by her finger tips. A series of bad calls, quite unprecedented in UK politics, to my memory.

But more than the incompetence it is her untrustworthiness which the most shocking aspect of May's reign. She began by saying that she would tackle the ‘burning injustices’ at play in the country, but is there even a shred of evidence from the last two years that she meant it? No.

May then took to prefacing anything she said publicly with ‘I have been clear…’ before going onto say something that is anything but clear. In December last year, she agreed to the EU’s back stop position on keeping the border open between Northern Ireland and the Republic, but seems to be breaking that commitment, saying it is unacceptable now.

Jean Claude Juncker, the president of the European Commission, revealed this week that May had been the one who suggested that we could stay in the transitional period for longer than planned after our formal Brexit. May denies this, but with her track record, I know who I believe.  

In 2009, May told her constituents in Maidenhead "we must say no to a third runway at Heathrow", but approved the expansion just after becoming prime minister. At about this time she called in the decision to go ahead with the new Hinkley Point nuclear power station, only to change her mind and give it the go-ahead.

Simon Wren-Lewis, a professor at Oxford University and a leading economist, strongly denied the prime minister's suggestion in Parliament on Wednesday, that he had said (in a chapter he wrote for a book, titled Economics for the Many) that the figures in Labour's last manifesto ‘did not add up’. The claim appeared to be ‘a deliberate lie told to gain political effect’, he said. The facts are easily checked, but May just can’t seem to stop herself from making things up.

May told the Tory party conference earlier this month, that austerity is over, but who has any confidence that is not just another fabrication?

We know that most politicians are a bit slippery, but when the prime minister tells blatant lies, it is no surprise that the public concludes that you can’t believe a word May says, and become disillusioned with our democratic system in general.  

I will leave you with Captain Ska's Liar, Liar.

Tuesday 23 October 2018

Trans issues - a Gift for Conspiracy Theorists or Shutting Down Debate?

Written by Dee Searle

The recent tensions about proposed changes to the 2004 Gender Recognition Act - to allow people identifying as transgender to legally change their gender without medical diagnosis or other evidence - could (or maybe should) be a gift for conspiracy theorists.

Among the most prominent theories is that the proposals are the work of private medicine providers and pharmaceutical companies keen to cash in on the likely resulting increase in demand for gender reassignment surgery, drugs and other treatment. Another is that it’s a plot by the right to distract the left and liberals from effectively challenging the Government’s incompetence and all-round viciousness by occupying us with splits and hand-wringing about how to critique the proposed changes without appearing to be against trans rights.

Yet another is that the security forces (that’s right - those folks who infiltrated and had relationships with environmental activists in the 1990s) are manipulating young politicos to passionately promote a highly individualistic strand of identity politics, to take energy away from tackling climate crisis, loss of biodiversity, inequality, growing international instability and other bigger strategic issues. Or that the ‘trans extremists’ (as some commentators have dubbed them) are misogynists, keen to undermine the gains made by women in recent decades and reassert global male dominance

Whatever the underlying impetus, the upshot is that there has been precious little thoughtful, in-depth discussion on the left about the implications of the proposed new rules.

While there can be no denying that trans people deserve the right to live in peace and security in their desired sex or gender, it was intriguing that the trans lobby, as well as many of those campaigning for lesbians, gays and bisexuals, leapt so quickly to support the draft legislation and to attack as transphobic anyone who suggested that it would be good to look at the issues in more detail.

The response to even the mildest of Guardian editorials has been claims from trans people that they are being made to feel unsafe or that their very existence is being challenged, while ignoring the fact that anyone questioning the changes are denounced as TERFs (Trans-Exclusionary Radical Feminists) and subjected to violent threats on social media. 

The issue has caused almost as big a rift in the Green Party as allegations of anti-Semitism have in the Labour Party. Trans activists called the police to disperse a group of three middle-aged women outside the Green Party’s autumn conference who were attempting to give out leaflets providing a feminist perspective on the proposals. And Labour has not escaped entirely: trans lobbying resulted in Jeremy Corbyn declaring his support for the legal changes with the result (according to Labour Women for Women’s Rights) that women are leaving the party.

The government’s consultation has now closed, but several pertinent questions remain unanswered, such as:

What is the motivation?

It’s bizarre that a particularly right-wing Tory government, preoccupied with Brexit and the mess caused by some of its previous legislation, such as Universal Credit, would spend Parliamentary time on a minority rights issue. The consultation document and accompanying factsheets read as though they have been drafted by trans activists rather than lawyers or civil servants. The government doesn’t have a track record in doing the right thing. What are they seeking to gain from relaxing procedures to change gender identity?

What are the implications of self-certification for trans people?

At least one group of transsexuals has expressed ‘deep concern’ about the proposed weakening of controls on who can self-select their gender. Their concerns include the blurring of differences between transsexual and transgender people.

They state that transsexual is a “medically diagnosed condition from childhood. It involves acute stress from knowing that psychologically that person is of opposite sex to the physiology of their body. A transsexual person knows that you cannot change biological sex but extensive psychotherapy and medical assistance alter their body to match with the mind and live in harmony. 

A large majority have had surgical alteration.” Whereas a transgender person has “a desire to adopt the lifestyle of the opposite sex, full time or part time, often expressing this via clothing and makeup. The desire to have surgery or other medical treatments is much less common (some suggest as low as 10 per cent). Few wish to see doctors or be psychiatrically evaluated. Some transition back and forth.”

What are the implications for women’s protected spaces?

There has already been at least one case of a self-identified trans woman prisoner being transferred to a women’s prison (although she was still physically male) where she sexually assaulted two female prisoners.

People working with the homeless report having to deal with male rough sleepers who self-identify as women to gain access to women’s shelters. This is sometimes because women’s shelters tend to be nicer and safer, but could also be to gain access to vulnerable women. Even if it’s the former, many homeless women are fleeing violent men, so being confronted by a biological male in a supposedly women-only space is likely to be traumatic.

More broadly, self-identified trans women would be able to use female toilets and changing rooms, and to access facilities, such as youth clubs, gym and swimming sessions, reserved for women and girls. These sessions are often the only opportunity for women and girls from some religious and cultural backgrounds to participate. It’s highly likely that they would not be able to attend in the presence of of trans females who were physically male.

Where are the voices of female-to-male transgender people?

Almost all of the public support for self-identification has come from male-to-female transgender people but almost none from the female-to-male trans community. Is that because they understand the risks to women’s safe spaces, which they possibly have experience of?

What about male behaviour?

Trans activists claim to be the most persecuted of any minority in Britain. Given that these claims come from male-to-female trans people, presumably the persecution comes from men. Yet the proposed amendments to the 2004 Gender Recognition Act do nothing to address male violence or attitudes. If the activists were genuinely concerned about enabling trans people to live in their desired gender, safe from aggression or abuse, surely they should be more concerned about tackling the source of the problems. However, none of the trans lobby groups has actually mentioned male behaviour.

Regardless of the worth of the proposed amendments (and any possible underlying malign agenda), they have caused deep divisions in left-leaning political parties and campaign groups such as Stonewall. The real question is not whether transgender people should self identify (or whether Jeremy Corbyn is anti-Semitic) but how can the (green) left build its confidence and develop a robust overarching political agenda, while being inclusive of (but not taken over by) special interest groups.

Unless we can do that, we will continue to be vulnerable to emotional pressure from the loudest voices, which saps energy from the challenging task of creating a fairer society that can live within the planet’s resources.

Dee Searle is a member of Camden Green Party and a Green Left Supporter

Sunday 21 October 2018

Book Review - Burning Up: A Global History of Fossil Fuel Consumption by Simon Pirani

Written by Gordon Peters

For a short time very recently the latest IPCC report on climate change hit the headlines and everyone - not just those committed to reducing it - was reminded of the accelerating costs to the planet and continuing livelihoods of carrying on the burning of fossil fuels. The report did not pull punches and said we had until 2030 to take steps well beyond any yet enshrined in policies to prevent the impending 3 degree rise this century, with the devastating impact on millions of lives, on cities, on species survival entailed.

Yet in our high consumption and celebrity news culture, that message again recedes and being able to do business as usual, or even faster, whether with Brexit or without Brexit, colonises discussions of public interest. Climate change is important perhaps, we seem to be told, but getting markets and business opportunities in order has to come first.  And the market can find further incentives to help tackle climate change.

But it is the very functioning of the market and the social and political relations constructed to maintain and enhance it which have driven fossil fuel extraction to such high levels, and just as importantly steered the ways in which technological invention and change to produce energy have developed. It took the Industrial Revolution and the drive for entrepreneurial profit, to give coal a central position in the economy. And the big acceleration in energy consumption from the 1970s following the oil shocks and crises of that decade has been driven by neo-liberal and de-regulatory capitalism.

These are conclusions drawn by Simon Pirani in this new book which traces the history of fossil fuel burning from pre-industrial times to the present day, with a comprehensive review of available data and a wide-ranging use of sources across the world. He notes the now accepted terminology of the Anthropocene but is quick to point out that what matters most is how the political economy of societies determines demands for energy and then directs technological know-how in certain directions.

Rural electrification in India varies considerably between states depending on the social, political and economic pressures at work so that where for instance a social movement was strong electrification was rolled out while elsewhere urban and industrial investment meant the poor and the countryside were neglected.

In South Africa the economic and political weight given to mining meant that electrification went in that direction and underlined the impoverishment and separation of black communities left without. Social and class forces shaped electrification everywhere. In terms of energy generation technology overall, it was with the invention of the combined-cycle gas turbine that electricity power plants became more efficient leading to large scale investment in gas pipelines, tying in carbon extraction increasingly to geopolitics.

 At the same time the global development agencies, the IMF and World Bank, played a big part in the post-crisis expansion of neo-liberal policies pushing a ‘standard model’ of electricity market reforms across the developing world, reducing subsidies, and skewing reward to foreign corporate investment with risks left to states to pick up, and growing indebtedness of countries and people.

From the 1990s fossil fuel consumption has intensified as the labour process has begun to undergo significant change, with technological innovation not only driving productivity but altering expectations of working time, of job security and employment rights, and in the tendency towards mass consumption and debt. The potential then for ‘de-coupling’ economic growth from resource use which more efficient technologies promised has been overtaken by the scale and volume of resource use, particularly oil and gas, and despite some attempts to wean off it, coal as well.

Together with rapidly increasing financialisation in the global economy, and the co-option of new technologies to restore profitability, the money created from energy transactions in the past thirty years or so has embedded fossil fuels in world trade.

There is hope in some quarters - and successes in divestment exist - for stranded assets being a way out of this vicious circle. Pirani does not discuss stranding assets as a tactic or strategy at much length. He considers the weight of vested economic and political power to have shown itself well capable of overshadowing such regulatory attempts as have been made.

It is certainly now clear that the Rio, Kyoto and Paris protocols are of themselves insufficient to make much difference, as the IPCC has found out. Closer to home we need only look at how the Conservative government has reduced support to renewables and maintains high subsidies for fossil fuel extraction. That there might be a technologically inspired route out of fossil fuel dependence which would free us from capitalist imperatives, as proposed by Paul Mason or Snricek and Williams, is given short shrift by Pirani.

History confounds them. He turns ‘automation to post-capitalism’ on its head, saying in effect that while technological opportunity is moulded by the needs of capital accumulation and reproduction, its own potential is in fact constrained, and that we need a social and economic transformation to free the technologies that will act more for natural and human benefit.

As a historian Pirani well demonstrates that left to the political elites and market reforms there is little chance indeed of de-carbonisation of the economy going far. Carbon trading does not change stock market priorities nor begin to tackle entrenched inequalities, as long as the rich world can continue to cordon itself off.

And ‘’tiptoe steps’’ such as we have are very far from enough, as all the data on most recent accelerations show so well. In a very useful chapter this book outlines how the different sectors of energy consumption add up, namely from industry, agriculture, military [so often underestimated] to transport, buildings, households and waste which situates the context so much better than the often heard division between what individuals contribute, or can do, and what the system, state or other institutions contribute, or can do.

That latter injunction –we can only do so much -too often tends to a feeling of relative powerlessness. Pirani addresses the question of power head on.  The potential of Internet related technologies to conserve energy and enhance decentralized networks for electricity distribution, and for that matter local generation and distribution, are hardly tapped at all and impeded by large scale commercial control which indeed has greatly added to wasteful consumption.

As long as market-based solutions are the vector for change such state regulation as is tried will only go so far, and much of the public discussion by elites will be at the level of paying lip service. Decentralised grids are eminently feasible, and renewables costs keep falling – but the market pricing structure and subsidies still heavily favouring fossil fuels inhibits mainstream adoption of smaller scale and renewable technologies.

This book points towards a transformative economic and social approach to the use of energy which challenges market predominance, and urges collective movement of people in situations where they mobilise their own commitment and resources for a different order capable of sustaining life and community not predicated on inexorable economic growth.

It reminds us very well that we cannot depend on existing elites, or new elites for that matter, even well-meaning ones, if the world of markets remains unscathed. It refers to protests and movements such as those in India, and in Nigeria, against corporate or state vested interests of exploitation where fossil fuel extraction and its human costs have been challenged, with some inroads made.

It does not offer particular suggestions on how collective struggles could coalesce, or where alternatives to fossil fuel dependence through technology could ally with mobilisations for economic and political change. But that is now the challenge. Preston Road anti-fracking action and the political implications now playing out show how important it is to make such alliances. Pirani’s book gives all the evidence needed to support such a movement.
Gordon Peters is a political activist and a supporter of the Ecosocialist Network

Burning Up
[Pluto Press], London, 2018

Saturday 20 October 2018

People's Vote March - London - Photos and Report

On a beautiful autumn day in London, hundreds of thousands of people attended the People's Vote march. Organisers said that more than 670,000 people joined the demonstration, one of the biggest public protests since the anti-Iraq war march in 2003.

The weather helped to produce a carnival atmosphere and the demonstrators were in a cheerful mood. I saw no problems and the police presence was pretty low key.

The crowd was certainly large, but it is difficult to assess the scale when you are in the middle of it. Parliament Square was packed and the crowd stretched all along Whitehall, and I could only inch along the road because of the numbers pouring towards the stage where the speeches were being made.

Many of the marchers were young people, who said that their future was being ruined by the decision to leave the European Union. Two of these young people told the Evening Standard why they had decided to come on the protest. Alice Beal said: "All of us were under 18 at the time of the referendum," and Nicky Tarran said: "People say the British people have spoken, we haven't."

Friday 19 October 2018

Is Trying to Deny Parliament a Meaningful Brexit Vote Taking Back Control?

The government is trying to bar amendments being tabled by MPs to whatever deal is struck on Brexit with the European Union (EU). MPs managed to amend the Brexit Bill to allow a ‘meaningful vote’ on the result of the negotiations, but the government seems to think that meaningful is a take it or leave it vote. The implication being that if the government loses the vote, then the default position will be to have no deal at all.

This was first revealed by Dominic Raab, the Brexit Secretary, saying that amendments will not be allowed because amending it could prevent it from being ratified. He wrote to the Commons’ procedure committee hoping to secure its endorsement of this position, but Labour party members of the committee managed to convince the committee to seek opinions from independent constitutional experts, on whether this would be unconstitutional.

I think it would be unconstitutional and I can’t really see how the government can get its way on this. This was perhaps reflected when Leader of the House, Andrea Leadsome appeared to be accepting of this when she said yesterday that, the reality before the United Kingdom would ‘amount’ to an either/or choice on May’s deal, even if the Commons were to debate possible amendments.

It is just about possible that the government will try to use the ‘Royal Prerogative’ which is part of the British constitution, and used for mainly foreign affairs matters, like deploying the armed forces and making or unmaking international treaties. Basically, the government can use this prerogative to sideline Parliament. Although, with MPs specifically previously amending the legislation to have a proper say, it is debatable whether or not the government could bar them now.

The government used the prerogative to trigger Article 50 of the EU’s Lisbon Treaty, when notice was given to the EU of the UK intention to leave the bloc. Use of the prerogative remains subject to the common law duties of fairness and reason though. It is therefore possible to challenge use of the prerogative by judicial review in most cases. This is what Gina Miller did when she took the government to court, and won.

All of which leads me to think that this route will not be attempted by the government over the final Brexit deal. Some Pro-EU MPs are considering an amendment to the approval motion to authorise a second referendum, whilst hard Brexit MPs are thinking about an amendment to limit the timescale of any transition period. This is all normal constitutional and Parliamentary behaviour, if rather inconvenient to government, but it is 'taking back control' in action.

Whatever Brexiters say about upholding ‘the will of the people,’ constitutionally, the people are not ‘sovereign.’ Indeed, the referendum itself was only advisory, as all referendums are under the British constitution. Apart from where we have pooled our sovereignty with the EU, technically the Monarch is sovereign, but in practice sovereignty in the UK is held by Parliament, not ‘the people.’ You might disagree with this, but it is true all the same.

The rather vague but effective slogan of ‘taking back control’ deployed by Brexiters at the referendum, is surely meant to mean ending pooled sovereignty with the EU and returning it entirely to the British Parliament? But the way politics and politicians work, arguments are made on the basis of whatever agenda the politicians are pursuing at the time. MPs by and large know what our constitution consists of, even if it can be vague at times and is infamously ‘unwritten,’ or least not all written down in one place.

Parliament is of course divided over Brexit, and shows no signs of coming to a sensible compromise over the issue. I have argued before that joining the European Economic Area when we leave the EU would be such a sensible compromise, but there doesn’t seem to be enough support in Parliament for this. There is also no support for a no deal Brexit. So, what to do?

The way I see it, we have two options that could move the country on from where we are today. The first, is a general election, where either the government is changed or the complexion of MPs is, one way or another. The second option is to put this back to the people in another referendum, now that all of the implications have become clearer, with the option of whatever deal we are offered, or staying on our current terms. Realistically, a general election, and perhaps a referendum, will require an extension to Article 50 beyond 29 March next year.

The People's Vote March in London tomorrow (Saturday) will demand a final say referendum. Assemble at 12 noon at Park Lane, near Marble Arch, and march to a rally at Parliament Square at 2pm. More details here.     

Tuesday 16 October 2018

Do We Need to Tax Wealth Properly in the UK?

The Institute for Public Policy Research (IPPR) Commission on Economic Justice have produced an evaluation of the taxation of wealth in the UK. The report, A Wealth of Difference’ concludes that wealth inequality is damaging the UK’s society and economy, whilst the current tax system is failing to tackle and in some cases is even exacerbating inequality. The authors propose a number of reforms to the system including replacing council tax with an annual property tax and replacing business rates with a land value tax.

Wealth Inequality in the UK

Household net wealth in Great Britain is valued at £12.8 trillion, of which 44 per cent is owned by the wealthiest 10 per cent and only 9 per cent is owned by the bottom 50 per cent of people. Wealth is twice as unevenly distributed as income in the UK, with a Gini coefficient of 0.62 for wealth compared to 0.32 for income.

Wealth refers to assets including property, financial wealth, pension wealth and physical wealth such as vehicles. Wealth inequality in the UK fell after the World Wars but has been increasing since the 1980s due to neo-liberal policies. This has been driven by increasing returns to capital compared to labour which means those who earn income from assets have seen their incomes grow more than those who work for a wage. Underlying causes include house price inflation and falling homeownership, financial asset price inflation, automation, low pay and weak labour bargaining power.

Increases in inequality have clear social implications. Beyond this, it is also limiting for economic growth. Those with greater incomes have a lower marginal propensity to consume, meaning they are more likely to hoard their wealth rather than spend it in the economy. The current system of taxation incentivises ‘rent seeking’ behaviour which means that people invest in existing assets such as housing which pushes up the price of that asset without generating any new economic output or activity.

The Current Tax System

One of the most powerful tools to combat wealth inequality is taxation to fund progressive spending. Currently, income from labour is taxed more heavily than income from wealth. Wealth in the UK is primarily taxed through capital gains tax (CGT), inheritance tax (IHT), dividend income taxation and stamp duties which bring in only 4 per cent of total tax revenues. In contrast, income and consumption taxes bring in 60 per cent of tax revenue.

The report identifies several key problems with the current system of wealth taxation: there are significant opportunities for avoidance, the system fails to raise large amounts of revenue, it creates economic distortions (for example, exemptions to CGT for first homes, encourages investment in property over other assets, differences in taxation of dividends vs income encourages senior pay to be dividend based).

The under-taxing of income from wealth compared to income from labour is regressive since wealthier individuals are likely to have greater income from assets than labour income and finally it will be fiscally unsustainable in the long run to raise sufficient revenue if income from labour continues to decline relative to income from capital.

Report Recommendations:

Tax all income from wealth under the income tax schedule

Treating income from capital as the same as income from labour from a taxation perspective would make the system considerably more progressive. In addition, it would increase incentives for labour market participation by the wealthy, raise more revenue and reduce opportunities for avoidance by simplifying the system (removing exemptions). Finally, shifting the balance of taxation towards capital rather than labour means the government will continue to be able to raise revenues in the face of increasing automation and technological change.

Abolish inheritance tax and introduce a lifetime donee-based gift tax

Wealth transfers give an unearned advantage to the recipient and work against social mobility, creating a strong social and economic justification for taxation. Inheritance tax currently has many exemptions and opportunities for avoidance that could be improved upon by a gift tax.

The report proposes taxing any gifts above a lifetime allowance of £125,000 under income tax. However without improvements to HMRC’s digital infrastructure it would have to rely on self-reporting and would require valuations of non-monetary gifts. The resolution foundation estimated such a tax could raise £15bn in 2020/21 (£9.2bn more than the current IHT).

Abolish non-domiciled status and reform the transparency of trusts

Improvements to transparency could reduce opportunities for avoidance as well as reducing the complexity of administering the system.

Introduce an annual property tax to replace council tax and eventually stamp duty.

The report recommends replacing council tax entirely with a new property tax. This wold be proportional to the present day value of homes and is different to a land value tax since it also taxes the value of the property itself. This would be levied on owners rather than occupiers (however owners are likely to pass this on in the form of higher rents).

A deferral mechanism would be needed to protect those who are asset-rich but cash-poor. Since the tax is linked to property values it would help to recapture some of the value generated by public investments in infrastructure such as new train stations. A charge of 0.5 per cent of property values is estimated to generate at least as much revenue as the current system. This could also replace stamp duty land tax in the future.  It would be possible to introduce progressive rates, exempting properties of low value and allowing for regional variation.

Introduce a land value tax to replace business rates

Land value tax has always been popular among economists. It taxes the value of the land (not the property on it) based on its most valuable use under existing planning permissions. This would penalise those who own land and do not develop it, incentivising more efficient use of land, without penalising those who make improvements to their properties. This would require considerable effort to value land regularly and establish a register of land ownership however it has been achieved in some European countries and elsewhere across the world.

Such a tax would support productive investment (unlike business rates), capture unearned rents from ownership of land and reduce incentives for speculation on land. It may also make parts of the country with less valuable land more attractive to businesses. An exemption to the first £20,000 per hectare would exclude most agricultural land. A rate of 4 per cent would generate the same value as the current business rates system.

These are all good ideas. We need to tax the wealth held in the UK more fairly if we want decent public services for all.

Sunday 14 October 2018

Stop Misdiagnosing Climate Change – the Root Cause is Capitalism

Written by Diana Stuart and Ryan Gunderson and first published at Common Dreams

The recent IPCC report has received widespread attention. The report states that rapid and bold actions are necessary to avoid the catastrophic impacts of climate change and that the goals of the Paris Accord will be insufficient.

This has resulted in an outpouring of opinion pieces calling for individuals to take actions in their daily lives to reduce greenhouse gas (GHG) emissions and to pressure elected officials to take significant steps to support renewable energy. This sense of urgency is critically needed, yet most of these calls for action are misguided due to a widespread misdiagnosis of the climate change problem.

To address a problem, it is most effective to identify the root cause. One might argue that the root cause of climate change is fossil fuel combustion. However, this overlooks how our current economic system not only continues to protect and sustain the fossil fuel industry but also drives the continuous increases in production and consumption causing environmental degradation at large. What is this system? Growth-dependent capitalism. Here we focus on the impacts of that growth.

The prioritisation of economic growth is what makes highly effective actions, such as buying-out or nationalizing fossil fuels and keeping them in the ground, infeasible. A recently released UN document, related to the 2019 Global Sustainable Development Report, suggests that the root cause of climate change is the economic system, namely one that prioritises profits at the expense of ecological and social well-being.

Evidence is mounting that demonstrates how prioritising a growing economy is the true driver of climate change. Data shows a positive relationship between economic growth and GHG emissions. This makes sense since GDP growth correlates with material production, including carbon: GDP growth by 1% equals a 0.6% growth in material use a 0.5–0.7% increase in carbon emissions.

Even scientists working on carbon budgets have come forward stating that reducing GHG emissions is incompatible with economic growth. While proponents of “green growth” support the idea of increasing GDP while reducing GHG emissions (known as absolute decoupling), this has yet to be realized. In most cases, decoupling in developed nations has been a result of increased carbon-intensive production in developing nations.

Greening growth through alternative energy, efficient technology, and carbon markets has had limited and paradoxical impacts. Efficiency gains are in many cases partially or completely offset by increased consumption. Because we are not implementing policies to decrease fossil fuel use, a unit of energy produced by alternative energy does not replace a unit of energy produced by fossil fuels and is correlated with increased total energy use. In a system prioritising economic growth the effectiveness of green alternatives will continue to be constrained by increasing levels of production and consumption.

In addition, market mechanisms that prioritise profit have not slowed climate change. The EU Emissions Trading System, the oldest and largest carbon market, has not dramatically reduced emissions. In 2017, the EU policy director stated that “the EU carbon market will continue to fail at its task to spur green investments and phase out coal.” Due to these realities, we need to move beyond an economy that prioritises growth.

But isn’t economic growth critical for a thriving society and human well-being? Actually, economic growth has only been a social priority for a relatively short time. As stated by ecological economist Herman Daly, it is largely believed that “without economic growth all progress is at an end.” He counters this belief by asserting, “[o]n the contrary, without growth . . . true progress finally will have a chance.” Stopping economic growth doesn’t mean we cannot meet our needs. We will still have enough. We will simply put an end to the production and consumption of more and more unnecessary things that harm us and the environment for the sake of a 3% annual increase in GDP.

In fact, studies show that economic growth that goes beyond satisfying basic needs does not increase happiness. What it does is push us beyond ecological limits in dangerous ways. By putting growth in its place, we can prioritise people, climate, and prosperity before profit. More and more people are starting to question whether a capitalist system that prioritises profit and growth above all is really a good thing. 

These ideas are spurring on an increasing number of academic and activist projects that offer alternatives. For example, the degrowth movement supports planned economic contraction and dematerialization in developed nations. Degrowth proponents explain why people would be happier in this new economic system. While there would be reduced total material production and consumption, there would be growth in social services, well-being, sharing, community agriculture, energy and worker cooperatives, not to mention a stronger sense of community.

This does not necessitate living without modern conveniences, just not more and more of them.  A range of degrowth policies have been proposed, including work time reduction, which has been shown to reduce material production, energy use, and GHG emissions while increasing health and well-being. Policies to reduce working hours would represent a critical step in restructuring our economy to address climate change.

Perhaps this all seems radical. That would be appropriate, as the word “radical” from the Latin radicalis means relating to the root. To accurately diagnose the climate change problem, we have to get at the root – our economic system. As the authors of the UN document explains, we need to “focus on life-improving and emissions-reducing goals rather than abstract economic goals.” They call for a new system where “economic activity will gain meaning not by achieving economic growth but by rebuilding infrastructure and practices toward a post-fossil fuel world with a radically smaller burden on natural ecosystems.”

They conclude by making clear that “states are the only actors that have the legitimacy and capacity to fund and organize large-scale transitions.” While communities move forward with important projects that put ecosystems and people first, we also need to push our governments to recognize economic growth as the root cause of climate change and implement policies to re-create our economy.

Diana Stuart is an Associate Professor in the Sustainable Communities Program and in the School of Earth and Sustainability at Northern Arizona University. Her work focuses on climate change mitigation and adaptation, agriculture, conservation, animals studies, political economy, and social theory.

Ryan Gunderson is an Assistant Professor of Sociology and Social Justice Studies in the Department of Sociology and Gerontology and Affiliate of the Institute for the Environment and Sustainability at Miami University. His research interests include environmental sociology, the sociology of technology, social theory, political economy, and animal studies.

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