How should we deal with the deficit?

I am getting rather fed up with all this talk of cuts. It seems to be the mark of a 'serious politician' to be able to claim 'we will cut more than you', and failure to adopt a 'slash and burn' approach to public expenditure seems to be a sign of weakness in this national election campaign.

To make it worse the media seem to clamour for the politicians to promise to cut more and more, leading to something akin to some kind of 'virtuous circle' or 'vicious circle' depending on one's point of view.

At the moment we have the Tories and Lib Dems competing at the top of the savagery scale. The Tories plan to have an 'emergency budget' within 'six months' of the election to announce their wide swathe of cuts. (Well that was until 'public opinion' appeared to waver abit, and now the Tories appear to be wobbling abit and not wanting to cut too much in their first year) God spare us anyway. Nick Clegg also appeared to be talking tough for a while too, stating cuts needed to be 'savage'. However, his voice too has been moderated recently by the more 'liberal' elements of his party, and trusty 'Vince' Cable has been stuck back in front of the microphone to show how reasonable the Lib Dems are. Meanwhile Labour appear to be keeping its cards to its chest on the 'cuts' front. They promise to cut,and cut they will over the next five years, but we have to wait for a while for the detail. Should they not win the election we will no doubt be spared the detail. I expect, at some level, that is what they are hoping.

Can't wait for whoever wins!

However, does anyone seriously stop for one minute to ask two questions. What does this all really mean for us? and who the hell caused these problems anyway?

Firstly let us deal with the latter question of who is to blame. We cannot just blame the bankers. I do not particularly like bankers, and therefore I am quite happy to sit back and let them suffer the public's wrath. Let's all support the 'Robin Hood Tax' campaign. Sign the petition. Google it now.

However, a significant part of the problem is Britain's general economic decline over the last century which has continued into this one. That is not necessarily a bad thing. I hate all this pretence we are still some sort of world power. Similarly, as a Green I cannot support the wealth of a nation built on colonialism and empire (political as well as economic) or an industrial base built on the 'rape and pillage' of the poor and our earth. However the decline of our industrial base has led to lower tax receipts, a decline in economic well being and the general wealth of our nation. This was exacerbated to the 'free market,' 'laissez faire' approach to economics which was introduced by Thatcher and the Tories, and continued by New Labour to a greater / lesser extent by Blair and then Brown.

The 'free marketeers' (whether Tory or New Labour) argued their approach would create 'opportunity for all' and lead to a 'trickle down' of the wealth. However that was not to be. Recent research by the government appointed National Equality Panel has shown the richest 10% are more than 100 times as wealthy as the poorest 10%of society. The research shows the Tories presided over the dramatic divisions of the 1980's and 1990's, and this change continued under Labour. By 2007-08 Britain had reached the highest level of income inequality since shortly after World War Two. Subsequently the top 10% of households amass wealth of £2.2. million (including property and pension assets), by their retirement, compared with the bottom 10% of households who have assets of less than £8000. Meanwhile the top dogs in business and banking take 'super star' salaries, such as the new CEO at Marks and Spencer Marc Bolland, who will receive a 'Golden Hello' from May 1 2010 of £15m. The rest of us meanwhile just have to tighten our belts and pay the price of the economic chaos the 'high flyers' in the banking industry have caused.

So what does all this talk of cuts mean to us? Well we know the bankers and the likes of chief execs such as Mr Bolland will not suffer. Even if the government does try to take some action against them (unlikely), they will just move abroad. Despite the current machismo of the debate of who can cut the most, and the public's belief in the propaganda that this is necessary if 'economic competence' is to be restored, no body is looking (or appearing even to care) at what this will mean for the poor and the vulnerable.

Author Richard Wilkinson has recently argued that the UK is one of the most unequal societies in Europe. He also argues that more unequal societies are bad for almost everyone within them – the well-off as well as the poor. His book The Spirit Level makes clear inequality has a detrimental effect on health, education, behaviour, life chances, community cohesion and social mobility. Subsequently unequal societies have more social problems such as violence, drugs, obesity, mental illness, long working hours, big prison populations etc. So much for the 'benefits' of the free market. Surely it is time to bring this thirty year 'experiment' to an end-if those in power will allow it.

We all know that cuts in public services will not lead to a decrease in inequality, and will most likely exacerbate the problem. Whatever your views of Labour, they turned round the years of cuts and underinvestment in the NHS that the Tories inflicted on us between 1979 and 1997. I am not uncritical how Labour did this, but that is another blog for the future. More cuts will cause more chaos, what ever the promises to protect 'health' and 'education'. The reality of the cuts will mean the closure of your local day centre for the elderly, an estimated cut of up to 20,000 jobs in local government nationally, cuts in family tax credits, maybe equipment and training for the troops in the Middle East or Afghanistan. Take your pick, what ever your political perspective you will not like the cuts when they come. However no doubt those at the top will protect themselves and sit pretty as usual.

However, I think there is an alternative. And it it about honesty. I also believe we can minimise the impact on the poor and vulnerable i.e. those that really need the help.

We do need to sort out the problems we currently have, then move towards a more sustainable way of living. Although not perfect, the Scandinavian countries may provide us with some guidance. Societies here are more equal, there is more sustainable use of people's skills and talent, and less national clamour to be head of the international 'club'.

There are two ways of dealing with the deficit; taxation and public expenditure. So what should Green's do?

Firstly lets use the 'T' word. The more you earn the more you should pay. The research is clear that once we have 'enough' (goods, money etc.) the happiness we feel as a consequence of getting even more does not continue to rise. The clinical psychologist Oliver James, among others, has researched and written brilliantly on this subject. Therefore it is totally reasonable to say those earning over £100,000 should pay 50% tax. This is what the Green Party unapologetically proposes.

The trade union Unison recently estimated that £4.7bn could be raised every year by introducing a 50% tax rate. Taxing the wealthy will put an end to the superstar salaries. Yes some of the bankers and the CEO's will leave the UK, but who needs them anyway. I personally do not believe they 'add value' to our society. The chaos they have caused in the last few years is clear evidence of that. Anyway, why does anyone (including me) have to justify the argument? Surely to tax the wealthy is better than to attack the poor and vulnerable through the closure of day centres, cuts in benefits etc.

Similarly we should introduce carbon taxes and carbon allowances as the Green Party proposes. Global warming is a significant threat to our very existence. Nobody to date has reached a consensus regarding international action. We must strive for this, but this does not stop us taking unilateral action. Carbon taxes and allowances will also play their part in cutting unnecessary consumption and waste. These will assist in building a new low carbon economy. However, if the financial deficit really is such a problem, let us utilise the receipts of all forms of taxation-in the short term- to get rid of the deficit-so then real investment can then begin to create a more sustainable society.

Despite the nationalisation of most of the banks, we seem to be getting little in return for our bail out. The bail out has cost each family thousands of pounds, yet we are asked to have our services cut, while the bankers and bigwigs continue to get their bonuses.

Let us use our ownership of the banks to reform the way the banking system works-including introducing 'ethics' in to the industry. We should have the power to stop investment in unethical industries overnight through our ownership of the banks. We can use the banks deposits to invest in building low carbon industries, and supporting growth within a fair trade, high ethical framework. Importantly, although a side effect, we can utilise the banks profits to pay back the billions as a country we owe. It is our asset after all, therefore we should have the profits, not the bankers, for the benefit of us all. Once the debt is repaid, we can then break the banks up, form mutual, co operative and friendly societies once more, with clear rules to stop the 'carpet baggers' demutualising them again. Our banking can then serve the interests of the community along ethical lines. Yes the bankers will not like it. Let them go to Switzerland or the USA, but if they do, we must ensure they too pay their fair share before they go.

Despite the emphasis on introducing a fairer taxation system here, we do need to look at some 'cuts'. The 'C' word will never be popular, but we can start by looking at how we can save public expenditure with no impact to the ordinary citizen.

Waste in both local and national government is well documented. Too much is spent on management structures, useless marketing and PR departments, rubbish IT systems,and unwieldy and self serving 'Human Resources' departments. Under the current zeitgeist it is seldom these areas that suffer in the cuts that occur. The self perpetuating parasites that are in charge seldom attack themselves-much easier to cut the front line through privatisation, outsourcing and endless reorganisations for whom the only beneficiaries include an army of consultants and advisers. I would argue public services must focus on their core task-of delivering decent public services- and we need to cut out the dead wood.

In terms of revenue raising £5bn could be raised every year with an empty property tax on vacant dwellings. £14.9bn could be raised every year by stopping tax reliefs being used to disproportionately subsidise the wealthy. (Source Unison alternative budget). Cutting a replacement for the Trident nuclear system. This useless system does not serve any purpose, and we have no control over its use-the Americans hold the keys to this one, we just pay the bill. It is immoral and will save us at least £20 billion. Further cuts in defence expenditure will save us many more billions in capital and revenue expenditure, as well as the prevention of our lovely young people (and lovely people of all ages in other countries) from getting killed in these pointless conflicts. It is time to stop getting embroiled (and also save more money) in these pointless wars.

These are the kind of cuts we need to be looking at adopting. Our key criteria should be not to hurt the poor, the vulnerable, the elderly and those who really need government help. Too long has this debate been left to the hands, the keyboards and the voices of the rich and powerful. It is time to seize back the initiative.


The views above are my personal views and do not necessarily reflect Green Party policy

See some alternative economic views:

www.new economics foundation

www.unison.org.uk. Look for 'Million Voices Budget'

See the Green Party's Economic Policy at:

http://www.greenparty.org.uk/. Have a look at our excellent New Deal document.