Austerity is a Political Choice not Economic Necessity

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By Prue Plumridge

Last week Matthew Lyn (a columnist for Bloomberg) wrote in an article published in Money Week that, “the policies on offer under Corbynomics would quickly ruin the economy”. This was followed shortly afterwards with another written by no less than a Labour councillor and published on Labour List which assured us that Cutting the deficit, healthy public finances, running a budget surplus, fiscal responsibility, and prudence [..] are not Tory ideological dictums but sound economic strategies that had served Labour well in the past. Embracing these goals and persuading Britain that we can be trusted on economy is a key to winning power.”

However, if were to take the trouble to understand how our economic and money systems actually work we would soon learn that such statements are either born of economic illiteracy or wilful deceit in order to pursue specific political agendas. This can largely be attributed to the decades of ‘conditioning’ which has done its job and led to the belief amongst the general population that there is no alternative to austerity, that we have to live within our means, and pay back our debts in the best Micawber tradition. You would think listening to politicians, many mainstream economists and the media that there is only one economic model in town – the household budget one.

Jeremy Corbyn has set out a clear and achievable plan for the future, and yet, Lyn believes that his proposals are a recipe for disaster. In fact he calls it delusional and complains bitterly that the success of the Greens and the SNP is based on a crazy idea that we can wave away our economic problems by recklessly printing money, getting into more debt and increasing state intervention.  Matthew then exposes his ignorance on economic matters by confusing deficit with debt when he writes “by any historical standards the UK is running a huge budget deficit”. The reality is that whilst George Osborne has reduced the deficit he has also increased the debt significantly* so by any standards, if you accept the household model of state budget accounting and that the debt is debt in traditionally accepted terms, the Chancellor hasn’t been doing that well given that he promised to balance the books by 2015.  To  he is now promising a £23bn surplus by 2020 that he says will not only eliminate the deficit, allow us to pay back some of our debt but also reduce our taxes.

*2015         £1.36 trillion (forecast)

2014          £1.26 trillion

2013          £1.10 trillion

2012          £1.10 trillion

2011          £0.91 trillion

2010          £0.76 trillion

2009          £0.62 trillion

2008          £0.53 trillion

Most people readily understand the word budget in terms of their own income believing, quite rightly, that they go into the red when their spending exceeds their income and that saving is spending less than they earn. It is easy to be fooled into thinking that our economy and money system works in the same fashion.  The on-line UK national debt clock which is ticking at a mind-boggling speed is a good example of how we have been conditioned to believe that we have been profligate and it is time to get control of our expenditure, balance our books and pay down our debt. Our understanding is, in fact, back to front. Deficits in state terms represent our savings i.e money that is issued by a sovereign government and spent into the economy to increase the financial assets available to the private sector i.e. to make the economy go round. On the other hand, achieving a surplus, as economically ignorant politicians are promising with some pride, will simply have the opposite effect by removing those said assets from circulation and putting the private sector into deficit.   One man’s surplus is another man’s deficit as it were. And, furthermore, the idea that a government can ‘save’ money is simply wrong as Professor Bill Mitchell, the respected Australian economist explains:

“People get very confused about the concept of national saving. They assume that saving is spending less than you earn and then apply that to budget surpluses and conclude that the surpluses add to national saving. But this view is erroneous. A sovereign government does not save. What sense does it make to say that the government is saving in the currency that it issues? Households save to increase their capacity to spend in the future. How can this apply to the issuer of the currency who can spend at any time it chooses?”

The subject of the national debt is also one where there is public misunderstanding.  Television is awash with programmes which picture debt collectors carting away the assets of someone who has got into arrears with a loan or following the lives of people whose financial situations are so dire that they are forced into bankruptcy.  Most of us quite erroneously, think this applies to the State too.  Who wouldn’t when prominent politicians say things like ‘We have taken our country back from the brink of bankruptcy’ (George Osborne October 2010). We were told then that if the country didn’t rein in its expenditure the debt collectors would be knocking on the door of the Treasury demanding payment or threatening bankruptcy if it didn’t pay up.  A simplistic picture yes but one which would chime with many people’s personal experience these days.  Worse still, we were compared to Greece and next in line to be affected by a sovereign debt crisis. Both lies and about as far away from the truth as it could get.

Here is how Paul Segal described the reality in an article published in the Guardian in 2010:

“Cameron argues that within five years the national debt will rise to “some £22,000 for every man, woman and child in the country”. This may be true, but what he doesn’t tell us is that it is money the government owes to us – not money that we owe to anyone else. That’s right: 80% of our government debt is owed to the British people. What is called “national debt” is our own savings, looked at from the other side of the balance sheet.”

It seems extraordinary that the economic model advocated by mainstream, neoliberal economists is one that is promoted as if there had never been another and also denies the accounting realities which are the basis for how the economy and money system actually works. It’s as if Wynne Godley, Hyman Minsky, Abba Lerner, Michal Kalecki, and of course Keynes and Marx to mention a few, never existed.

So if the money system doesn’t work as we’ve been led to believe by deceitful or economically illiterate politicians and media hacks, how DOES it actually work? Quite simply:

“A sovereign, currency-issuing government is NOTHING like a currency-using household or firm. The sovereign government cannot become insolvent in its own currency; it can always make all payments as they come due in its own currency because it is the ISSUER of the currency, not simply the USER (as a household or private business is). This issuing capacity means that the government does not face the same kinds of constraints as a private sector user of money, which in turn exposes the fallacy of the household analogy, so beloved in popular economics discourse.

Indeed, if government spends currency into existence, it clearly does not need tax revenue before it can spend. Further, if taxpayers pay their taxes using currency, then government must first spend before taxes can be paid. Again, all of this was obvious two hundred years ago when kings literally stamped coins in order to spend, and then received their own coins in tax payment.

Another shocking truth is that a sovereign government does not need to “borrow” its own currency in order to spend. Indeed, it cannot borrow currency that it has not already spent!”

It is astonishing to learn that whilst most of us think that government has to raise money from the capital markets to finance the deficit and refinance maturing debt this is not how it works at all.  It is simply a convenient smokescreen behind which neoliberal politicians (Conservative and Labour alike) hide in their justification for pursuing austerity and public sector cuts. In fact, as Professor Mitchell points out “the continued issuance of public debt is a form of corporate welfare which makes the task of making profits through trading financial assets in private capital markets that much easier…… the Treasury [issues] securities not because it needs cash, but because market participants need securities.” 

The truth of the matter is that in 1971 when the Bretton Woods system collapsed (which tied currency to a gold standard) and fiat currencies were introduced governments were freed from those revenue constraints.  We have been led to believe that raising cash from the market is to fund government spending when tax revenue is insufficient.  But in a fiat monetary system even tax revenue is unnecessary.  The constraints on government spending are not financial but those linked to productivity and available resources and this is what puts the brakes on government spending not being in debt.

So how can we make sense of the motivation of our politicians to justify austerity and cuts on the back of what is not only plainly untrue but has also proved so destructive during the last five years? Jeremy Seabrook wrote in the Guardian in 2010.

Today’s detestation of “big government” stems from this same source, and the affection of Cameron and his colleagues for the “big society” is a euphemism for the reduction of public funds in assisting the poor: rolling back the state, leaving the market to distribute its rewards in accordance with the natural order of things … the market mechanism is as flawless a creation as the earth, and should remain untouched by the hand of meddlers, whose only effect is to upset its power to enrich us all … Once more, the state shrinkers, the advocates of vanishing government, the cutters of red tape and regulation, the liberators of a humanity constricted by statist straitjackets, believe they have a mandate for freedom. But it is freedom under the law of an imagined jungle; by a savage irony, at a time when the smoke from the stumps of felled trees in the real jungle darken the horizon of a used-up future.”

We are not as neoliberal politicians want us to believe  ‘living beyond our means’ and the austerity drive which manifests itself as the necessity for draconian cuts in the public sector and the privatisation of publically funded services is really about reducing the size of government and restoring the ‘primacy of the market” as Professor Mitchell has remarked.

Deficits and debt are, in truth, the biggest red herrings of all in this debate.  In fact as Lord Macaulay wrote in ‘The History of England’ published in 1849:

‘At every stage in the growth of that (national) debt it has been seriously asserted by wise men that bankruptcy and ruin were at hand. Yet still the debt kept on growing; and still bankruptcy and ruin were as remote as ever’

The real issue is how we plan for the future.  How productive can we be, will there be sufficient resources at our disposal to meet demand? These questions have to be debated in the context of climate change and the devastation which we are seeing all around us, both human and in nature, whose roots lie in the capitalist desire for untrammelled growth and the search for profit.  Equally we are not the ‘machine men’ of Charlie Chaplin’s speech in The Dictator and as such we need to give those that want it and are able the dignity of employment which meets their financial and physical needs.

It is time to reassess the capitalist pursuit of profit through the downward spiral of a low paid economy and the maintenance of unemployment as a neoliberal necessity. It is time to challenge the neoliberal agenda which successive governments have embraced over decades. Such blind adherence or maybe not so blind has led to increasing inequality, a wealth gap of extraordinary proportions, an unstoppable drive for unsustainable growth and a situation where corporate power is replacing the democratic framework as it subverts democracy through politicians and trade deals.

So what sort of society do we want to live in and how might we achieve it? The entry of Jeremy Corbyn into the leadership race has revitalised that political debate in a very public way.  Do we want to continue with a political framework where there is not much to tell between the parties and a status quo future or do we strike out for a completely new paradigm? That debate must be held in terms of an economic model that will best deliver our aims.  Professor Bill Mitchell has set out some broad principles which could serve as the basis for that discussion.

 

1. The Government is Us!

2. The government is our agent and like all agents we cede resources and discretion to it because we trust that it can create benefits for all of us that each one of us individually cannot achieve. We understand scale.

3.  Governments invest in our immediate well-being by providing essential services without the need for profit.

4.  Governments invest in the next generation’s well-being through building productive infrastructure that delivers services for decades.

5.  We empower governments with unique characteristics so that it can pursue our interests without the constraints we face ourselves.

6.  We understand that a deficit for us means we have to find funds to cover it, whereas a deficit for our agent, the currency-issuing government means it is funding our spending and saving choices.

7.  A government deficit enhances our freedom because it boosts our income and allows us more options.

What next?  The choice is most definitely ours.

 

Sources:

http://ineteconomics.org/ideas-papers/interviews-talks/demystifying-modern-monetary-theory

How to discuss Modern Monetary Theory: Bill Mitchell.

http://bilbo.economicoutlook.net/blog/?p=25961

Deficits are our savings: Bill Mitchell http://bilbo.economicoutlook.net/blog/?p=10384

Budget Surpluses are not savings: Bill Mitchell http://bilbo.economicoutlook.net/blog/?p=961

The National Debt is money the government owes us Paul Segal

http://www.theguardian.com/commentisfree/2010/jun/17/fiscal-deficit-threat

Market participants need public debt: Bill Mitchell http://bilbo.economicoutlook.net/blog/?p=10404

Jeremy Seabrook: The specter of laissez faire haunts Britain.

http://www.theguardian.com/commentisfree/2010/jun/20/spectre-laissez-faire-haunts-britain

The Debt Delusion: Exposing Ten Tory Myths about Debts, Deficits and Spending Cuts: Mehdi Hasan.

20:20 Challenge : Day 1 – To Change the Labour Party and Change the Country

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Today we’re launching a new challenge for the ‪#‎jeremy4leader‬ campaign. we’re calling it the 20:20 Challenge. 

Day 1 Challenge

Day 1 of 20

Now, we all know the success we’ve had with our online campaigning. It’s the talk of the election campaign. But we also recognise that it will come to very little unless we can turn this social media presence into actual voters and real votes. So today, we’re setting every one of our supporters a challenge which could well ensure that we win this leadership election, and in so doing, change politics in this country for a generation.

What we are asking is that everyone tries to recruit one member or supporter to the Labour Party each day for 20 days – by the 12th of August (the deadline for registration in this election). Ask your partners, your parents and grandparents, your brothers and sisters, your work colleagues, fellow students and union comrades. Make sure they know how to register:

Either by:

1. Becoming a full member (check out discounted rates for students and others):

http://join.labour.org.uk/

2. Becoming a ‘supporter’ by texting ‘support’ to 78555 (texts costs £3) or online here:

http://support.labour.org.uk/ (this is also the case if you are a member of a union which is not affiliated to the Labour Party)

3. Registering as a member of an affiliated union (free if a member of an affiliated union – see list here: http://www.labour.org.uk/…/trade-union-and-labour-party-lia…):

http://support.labour.org.uk/ (choose member of affiliated organisation option)

Please note, for all types of membership, you will need to agree to the statement:

“I support the aims and values of the Labour Party, and I am not a supporter of any organisation opposed to it.”

The deadline to register:

August 12th (but do it now!)

Please tell us about your stories and successes below. Thanks

‪#‎JezWeCan‬

POLL: Who should be Leader of the Labour Party? 

A brief history of social security and the reintroduction of eugenics by stealth

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A brief history of social security and the reintroduction of eugenics by stealth

From KittySJones, previously published here

Introduction

Our welfare state arose as a social security safety net – founded on an assurance that as a civilised and democratic society we value the well-being and health of every citizen.

There was a cross-party political consensus that such provision was in the best interests of the nation as a whole at a time when we were collectively spirited enough to ensure that no one should be homeless or starving in modern Britain.

As such, welfare is a fundamental part of the UK’s development –  our progress – the basic idea of improving people’s lives was at the heart of the welfare state and more broadly, it  reflects the evolution of European democratic and rights-based societies.

Not a handout

Now the UK “social security” system is anything but. It has regressed to reflect the philosophy underpinning the 1834 Poor Law, to  become a system of punishments aimed at the poorest and most marginalised social groups. The Poor Law principle of less eligibility – which served as a deterrence to poor people claiming  poor relief is embodied in the Conservative claim of Making work pay: benefits have been reduced to make the lowest paid, insecure employment a more appealing option than claiming benefits. (See: Conservatism in a nutshell.)

The draconian benefit sanctions are about depriving people of their lifeline benefits because they have allegedly failed to comply in some way with increasingly stringent welfare conditionality – which is aimed at enforcing compliance, “behaviour change” and achieving reductions in welfare expenditure rather than supporting people claiming benefits and helping them to find work.

Removing a person’s means of meeting basic survival needs presents significant barriers to that person finding work. If we can’t meet our basic needs, we cannot be motivated or “incentivised” to do anything but struggle for survival.

maslow

Maslow’s hierarchy of Needs

Such a political aim of “behaviour change” is founded entirely on assumptions and moral judgements about why people are unemployed or underpaid. And of course serious concerns have arisen because sanctions have tended to be extremely discriminatory. Young people, women with childcare responsibilities, people with learning disabilities, people with mental illnesses and disabled people are particularly vulnerable as a consequence of the rigid conditionality criteria.

Frankly, such an approach to welfare seems to be cruelly designed to exclude those people who need support the most. Not only does the current government fail to recognise socio-economic causes of poverty, poor wages, underemployment and unemployment because of political decision-making – preferring to blame individuals for economic misfortune – it also fails to recognise the detrimental wider social and economic implications of penalising poor people for the conservative engineering of a steeply hierarchical society.

As a government that values social inequality, and regards it as necessary for economic growth, insolvency and poverty for some is intrinsic to the Conservative ideological script and drives policy decisions, yet the Tories insist that individuals shape their own economic misfortunes.

Worse, the Conservatives are prepared to leave people without a basic means of support – one that the public have paid for themselves.

Austerity – which is aimed at the poorest members of society – has served to increase inequality, and since the Tory welfare “reforms,” we have seen a re-emergence of absolute poverty. Up until recently, our welfare system ensured that everyone could meet their basic survival needs. That no longer is the case.

A brief history of welfare

A welfare state is founded on the idea that  government plays a key role in ensuring the protection and promotion of the economic and social well-being of its citizens. It is based on the principles of equality of opportunity, equitable distribution of wealth, and both political and social responsibility for those unable to avail themselves of the minimal provisions for well-being.

It was recognised that people experienced periods of economic difficulty because of structural constraints such as unemployment and recession, through no fault of their own. It was also recognised that poor health and disability may happen to anyone through no fault of their own.

The welfare state arose in the UK during the post-war period, and following the Great Depression, for numerous reasons, most of these were informed by research carried out into the causes of poverty, its effects on individuals and more broadly, on the UK economy. There were also political reasons for the Conservatives and Liberals supporting the poorer citizens – the newly enfranchised working class.

Charles Booth in London and Sebohm Rowntree in York carried out the first serious studies of poverty and its causes. They both discovered that the causes were casual labour, low pay, unemployment, illness and old age – not laziness, fecklessness, drunkenness and gambling, as previously assumed. The poverty studies raised awareness of the extent of poverty in Britain and the myriad social problems it caused.

The Boer war of 1899-1902 highlighted the general poor state of health of the nation. One out of every three volunteers failed the army medical due to malnutrition, other illnesses due to poor diet and very poor living conditions. The military informed the government at the time of the shockingly poor physical condition of many of those conscripted.

It was realised that the effects of poverty were potentially damaging to  the whole of society. Health problems and infectious disease – rife in the overcrowded slums – could affect rich and poor alike. It was recognised that the economy suffered if large numbers of people were too poor to buy goods and social problems such as exploitation, debt, crime, prostitution and drunkenness were a direct result of poverty, and not the cause of it.

The discovery of  widespread poor health as a consequence of poverty raised concerns about Britain’s future ability to compete with new industrial nations such as Germany and the USA. National efficiency would only increase if the health and welfare of the population improved.

The growth of the Labour Party and Trade Unionism presented a threat to the Liberals and the Conservatives. The new working class voters were turning to these organizations to improve their lives. The traditionally laissez faire Liberals recognised this and supported the idea of government help for the working class.

Back to the present: welfare is no longer about welfare

The current Conservative government has taken a distinctly behaviourist turn – a form of psychopolitics which essentially reduces explanations of poverty to the personal – blaming poor people for poverty and unemployed people for unemployment, formulating policies that are about making people change their behaviour, based on a simplistic “cause and effect” approach. The government nudges and we are expected to comply. Increasing the use of benefit sanctions is one policy consequence of this psychopolitical approach.

Of course this brand of psychopolitics is all about the government assuming the fallibility of the population and the infallibility of the government when it comes to decision-making and behaviours.

Although Cameron claims that “Nudge” draws on a “paternalistic libertarian” philosophy, any government that acts upon a population, by reducing liberties, choices and by imposing behavioural modification without public consent – expecting people to change their behaviours and choices unwittingly to fit with what the state deems “right,” rather than reflecting public needs via democratic engagement and a genuine dialogue, is actually authoritarian.

As I’ve said elsewhere, welfare has been redefined: it is pre-occupied with assumptions about and modification and monitoring of the behaviour and character of recipients, rather than with the alleviation of poverty and ensuring economic and social well-being.

Eugenics by stealth

Further intention of directing behavioural change is at the heart of policies that restrict welfare support such as tax credits to two children. The Conservatives have recently announced plans to cut welfare payments for larger families. Whilst this might not go as far as imposing limits on the birth of children for poor people, it does effectively amount to a two-child policy.

A two-child policy is defined as a government-imposed limit of two children allowed per family or the payment of government subsidies only to the first two children.

Of course this is justified using a Conservative ideologically driven scapegoating narrative of the feckless family, misbehaving and caught up in a self-imposed culture of dependence on welfare.

This restriction in support for children of larger families, however, significantly impacts on the autonomy of families, and their freedom to make decisions about their family life. Benefit rules purposefully aimed at reducing family size rarely come without repercussions.

It’s worth remembering that David Cameron ruled out cuts to tax credits before the election when asked during interviews. Tax credit rates weren’t actually cut in the recent Budget—although they were frozen and so will likely lose some of their value over the next four years because of inflation.

Some elements were scrapped, and of course some entitlements were restricted. But either way a pre-election promise not to cut child tax credits sits very uneasily with what was announced in the budget.

Iain Duncan Smith said last year that limiting child benefit to the first two children in a family is “well worth considering” and “could save a significant amount of money.” The idea was being examined by the Conservatives, despite previously being vetoed by Downing Street because of fears that it could alienate parents. Asked about the idea on the BBC’s Sunday Politics programme, Duncan Smith said:

I think it’s well worth looking at,” he said. “It’s something if we decide to do it we’ll announce out. But it does save significant money and also it helps behavioural change.

Firstly, this is a clear indication of the Tories’ underpinning eugenicist designs – exercising control over the reproduction of the poor, albeit by stealth. It also reflects the underpinning belief that poverty somehow arises because of faulty individual choices, rather than faulty political decision-making and ideologically driven socio-economic policies.

Such policies are not only very regressive, they are offensive, undermining human dignity by treating children as a commodity – something that people can be incentivised to do without.

The tax child credit policy of restricting support to two children seems to be premised on the assumption that it’s the same “faulty” families claiming benefits year in and year out. However, extensive research indicates that people move in and out of poverty – indicating that the causes of poverty are structural rather than arising because of individual psychological or cognitive deficits.

The Joseph Rowntree Foundation published a study that debunked  the notion of a “culture of worklessness” in 2012.  I’ve argued with others more recently that there are methodological weaknesses underlying the Conservative’s regressive positivist/behaviourist theories, especially a failure to scientifically test the permanence or otherwise of an underclass status, and a failure to distinguish between the impact of “personal inadequacy” and socio-economic misfortune.

Back in the 1970s, following his remarks on the cycle of deprivation, Keith Joseph established a large-scale research programme devoted to testing its validity. One of the main findings of the research was that there is no simple continuity of social problems between generations of the sort required for his thesis. At least half of the children born into disadvantaged homes do not repeat the pattern of disadvantage in the next generation.

Despite the fact that continuity of deprivation across generations is by no means inevitable – the theory is not supported by empirical research – the idea of the cycle of “worklessness” has become “common sense.” Clearly, common perceptions of the causes of poverty are (being) misinformed. The individual behaviourist theory of poverty predicts that the same group of people remain in poverty. This doesn’t happen.

However, the structural theory predicts that different people are in poverty over time (and further, that we need to alter the economic structure to make things better). Longitudinal surveys show that impoverished people are not the same people every year. In other words, people move in and out of poverty: it’s a revolving door, as predicted by structural explanations of poverty.

Many families are in work when they plan their children. Job loss, an accident or illness causing disability can happen to anyone at any time. It’s hardly fair to stigmatise and penalise larger families for events that are outside of their control.

Limiting financial support to two children may also have consequences regarding the number of abortions. Abortion should never be an outcome of reductive state policy. By limiting choices available to people already in situations of limited choice – either an increase of poverty for existing children or an abortion, then women may feel they have no choice but to opt for the latter. That is not a free choice, because the state is inflicting a punishment by withdrawing support for those choosing to have more than two children, which will have negative repercussions for all family members.

Many households now consist of step-parents, forming reconstituted or blended families. The welfare system recognises this as assessment of household income rather than people’s marital status is used to inform benefit decisions. The imposition of a two child policy has implications for the future of such types of reconstituted family arrangements.

If one or both adults have two children already, how can it be decided which two children would be eligible for child tax credits?  It’s unfair and cruel to punish families and children by withholding support just because those children have been born or because of when they were born.

And how will residency be decided in the event of parental separation or divorce – by financial considerations rather than the best interests of the child? That flies in the face of our legal framework which is founded on the principle of paramountcy of the needs of the child. I have a background in social work, and I know from experience that it’s often the case that children are not better off residing with the wealthier parent, nor do they always wish to.

Restriction on welfare support for children will directly or indirectly restrict women’s autonomy over their reproduction. It allows the wealthiest minority to continue having babies as they wish, whilst aiming to curtail the poor by disincentivisingbreeding” of the “underclass.” It also imposes a particular model of family life on the rest of the population. Ultimately, this will distort the structure and composition of the population, and it openly discriminates against the children of large families.

People who are in favour of eugenics believe that the quality of a race can be improved by reducing the fertility of “undesirable” groups, or by discouraging reproduction and encouraging the birth rate of “desirable” groups.

Eugenics arose from the social Darwinism and laissez faire economics of the late 19th century, which emphasised competitive individualism, a “survival of the wealthiest” philosophy and sociopolitical rationalisations of inequality.

Eugenics is now considered to be extremely unethical and it was criticised and condemned widely when its role in justification narratives of the Holocaust was revealed.

But that doesn’t mean it has gone away. It’s hardly likely that a government of a so-called first world liberal democracy – and fully signed up member of the European Convention on Human Rights and a signatory also to the United Nations Universal Declaration – will publicly declare their support of eugenics, or their totalitarian tendencies, for that matter, any time soon.

But any government that regards some social groups as “undesirable” and formulates policies to undermine or restrict that group’s reproduction rights is expressing eugenicist values, whether those values are actually named “eugenics” or not. Conservatives are not known for valuing diversity, it has to be said.

Implications of the welfare “reforms”: Human rights

Article 25 of the Universal Declaration of Human Rights, of which the UK is a signatory, reads:

  1. Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.
  2. Motherhood and childhood are entitled to special care and assistance. All children, whether born in or out of wedlock, shall enjoy the same social protection.

A recent assessment report by the four children’s commissioners of the UK called on the government to reconsider its deep welfare cuts, voiced “serious concerns” about children being denied access to justice in the courts, and called on ministers to rethink plans to repeal the Human Rights Act.

The commissioners, representing each of the constituent nations of the UK, conducted their review of the state of children’s policies as part of evidence they will present to the United Nations.

Many of the government’s policy decisions are questioned in the report as being in breach of the convention, which has been ratified by the UK.

England’s children’s commissioner, Anne Longfield, said:

We are finding and highlighting that much of the country’s laws and policies defaults away from the view of the child. That’s in breach of the treaty. What we found again and again was that the best interest of the child is not taken into account.”

Another worry is the impact of changes to welfare, and ministers’ plan to cut £12bn more from the benefits budget. There are now 4.1m children living in absolute poverty – 500,000 more than there were when David Cameron came to power.

It’s noted in the report that ministers ignored the UK supreme court when it found the “benefit cap” – the £25,000 limit on welfare that disproportionately affects families with children, and particularly those with a larger number of children – to be in breach of Article 3 of the convention: the best interests of the child are paramount:

 In all actions concerning children, whether undertaken by public or private social welfare institutions, courts of law, administrative authorities or legislative bodies, the best interests of the child shall be a primary consideration.

The United Nation’s Convention on the Rights of the Child (UNCRC) applies to all children and young people aged 17 and under. The convention is separated into 54 articles: most give children social, economic, cultural or civil and political rights, while others set out how governments must publicise or implement the convention.

The UK ratified the Convention on the Rights of the Child (UNCRC) on 16 December 1991. That means the State Party (England, Scotland, Wales and Northern Ireland) now has to make sure that every child has all the rights in the treaty. The treaty means that every child in the UK has been entitled to over 40 specific rights. These include:

Article 1

For the purposes of the present Convention, a child means every human being below the age of eighteen years unless under the law applicable to the child, majority is attained earlier.

Article 2

1. States Parties shall respect and ensure the rights set forth in the present Convention to each child within their jurisdiction without discrimination of any kind, irrespective of the child’s or his or her parent’s or legal guardian’s race, colour, sex, language, religion, political or other opinion, national, ethnic or social origin, property, disability, birth or other status.

2. States Parties shall take all appropriate measures to ensure that the child is protected against all forms of discrimination or punishment on the basis of the status, activities, expressed opinions, or beliefs of the child’s parents, legal guardians, or family members.

Article 3

1. In all actions concerning children, whether undertaken by public or private social welfare institutions, courts of law, administrative authorities or legislative bodies, the best interests of the child shall be a primary consideration.

2. States Parties undertake to ensure the child such protection and care as is necessary for his or her well-being, taking into account the rights and duties of his or her parents, legal guardians, or other individuals legally responsible for him or her, and, to this end, shall take all appropriate legislative and administrative measures.

3. States Parties shall ensure that the institutions, services and facilities responsible for the care or protection of children shall conform with the standards established by competent authorities, particularly in the areas of safety, health, in the number and suitability of their staff, as well as competent supervision.

Article 4

States Parties shall undertake all appropriate legislative, administrative, and other measures for the implementation of the rights recognized in the present Convention. With regard to economic, social and cultural rights, States Parties shall undertake such measures to the maximum extent of their available resources and, where needed, within the framework of international co-operation.

Article 5

States Parties shall respect the responsibilities, rights and duties of parents or, where applicable, the members of the extended family or community as provided for by local custom, legal guardians or other persons legally responsible for the child, to provide, in a manner consistent with the evolving capacities of the child, appropriate direction and guidance in the exercise by the child of the rights recognized in the present Convention.

Article 6

1. States Parties recognize that every child has the inherent right to life.

2. States Parties shall ensure to the maximum extent possible the survival and development of the child.

Article 26

1. States Parties shall recognize for every child the right to benefit from social security, including social insurance, and shall take the necessary measures to achieve the full realization of this right in accordance with their national law.

2. The benefits should, where appropriate, be granted, taking into account the resources and the circumstances of the child and persons having responsibility for the maintenance of the child, as well as any other consideration relevant to an application for benefits made by or on behalf of the child.

Here are the rest of the Convention Articles

The Nordic social democratic model of welfare

Finally, it’s worth noting that sociologist Lane Kenworthy has pointed out that the Nordic welfare experience of the modern social democratic model can:

  1. “promote economic security, expand opportunity, and ensure rising living standards for all . . . while facilitating freedom, flexibility and market dynamism.”
  2. Nordic welfare models include support for a universalist welfare state which is aimed specifically at enhancing individual autonomy, promoting social mobility and ensuring the universal provision of basic human rights, as well as for stabilizing the economy, alongside a commitment to free trade.
  3. The Nordic model is distinguished from other types of welfare states by its emphasis on maximizing labor force participation, promoting gender equality, egalitarian and extensive benefit levels and the large magnitude of income redistribution.
  4. Nobel Prize-winning economist Joseph Stiglitz has noted that there is higher social mobility in the Scandinavian countries than in the United States, and argues that Scandinavia is now the land of opportunity that the United States once was. The Nordics cluster at the top of league tables of everything from economic competitiveness to social health to happiness.
  5. They have avoided both southern Europe’s economic sclerosis and America’s extreme inequality. Development theorists have taken to calling successful modernisation “getting to Denmark”.
  6. The Nordics demonstrate very well that it is possible to combine competitive capitalism with a large state: they employ 30% of their workforce in the public sector, compared with an OECD average of 15%. The main lesson to learn from the Nordics is not ideological but practical.
  7. The state is popular not because it is big but because it works. A Norwegian pays tax more willingly than a Californian because he or she has access to decent schools, support when times are difficult and free health care as a result.
  8. Norway ranks among the richest countries in the world. GDP per capita is among the highest in the world.
  9. Norway regards welfare services not as social costs but as fundamental social investment for open innovation and growth.
  10. Innovation should not be an opportunity for a few only. It should be democratised and distributed in order to tackle the causes of growing inequality.

Inequality hampers economic growth.

We can’t afford not to have a welfare state.

See also:

1957929_293215800829475_303676825_oPictures courtesy of Robert Livingstone

Government proposes inquiry into moving to a ‘pay NHS’

Quote

by RICHARD GRIMES

First posted 15.07.15 by Open Democracy – Our NHS

Last week the government quietly announced a review into the biggest political hot potato of all – and almost no-one noticed.

Imagine for a moment that you are the newly re-elected Conservative Prime Minister, and you want to launch an inquiry into whether the NHS should be paid for in future through user charges and insurance, not through tax.

But you’ve got a problem – you’ve just won an election without breathing a word that you were considering such a fundamental change to the funding of the NHS.

So how would you make such an announcement?

Very quietly, of course.

Last week the government did just that.

If David Cameron, or his Chancellor or Health Secretary had announced such an inquiry to re-consider a principle that has been sacrosanct since 1946, you’d expect front page headlines and Newsnight specials considering the implications. You’d expect a bit of a flurry (to say the least) about whether Cameron was back-tracking from his promises about what voters said was their number one issue.

But the launch of this inquiry has not been reported in the mainstream media, at all.

Why? Because it was casually announced by a little known minister, the newly ennobled “Under Secretary of State for NHS Productivity”, Lord David Prior, in the rarefied atmosphere of a House of Lords debate on the “sustainability” of the NHS, moved on 9th July by crossbench peer Lord Patel.

The principle of how the NHS is funded has (mostly) stood firm since 1946, summed up in clause 4 of its White Paper:

“All the service, or any part of it, is to be available to everyone in England and Wales. The Bill imposes no limitations on availability – e.g. limitations based on financial means, age, sex, employment or vocation, area of residence, or insurance qualification.”

That is, the NHS is available to everyone, whether or not they can afford to pay user charges, or whether they are insurable. The question about whether the NHS could be funded through user charges or insurance is answered here: No it shouldn’t.

But where better to have the sort of debate that no one has voted for, and launch an inquiry that no-one has voted for, than in the House of Lords, which no one has voted for?

Prior – recently elevated to the Lords from his stint as the strongly pro-market chair of the Care Quality Commission, formerly a Conservative MP and deputy party Chair – led for the government in the Lords debate.

Before he seized the opportunity to push his agenda, he said he listened to the “strength of feeling” in the unelected House.

Tory peers like Lord Cormack argued in favour of moving away from tax funding, saying:

“All forms of funding must be looked at. We have to have a plurality of funding if we are to have a sustainable NHS. Whether the extra funding comes from compulsory insurances or certain charges matters not, but it has to come.”

Matters not!? As a true Tory, he says that the funding should not come from taxing the rich (which he does not even countenance), but instead from taxing the sick.

More disappointing were the contributions from Labour peers like (the notoriously pro-privatisation) Lord Warner:

Our tax-funded, largely free at the point of clinical need NHS is rapidly approaching an existential moment. The voices of dissent and outrage will no doubt be deafening but a wise Government should begin now the process of helping the public engage in a discourse about future funding of the NHS.”

Far from endorsing the tax-funded system that is widely acknowledged to be the fairest way of paying for healthcare, here we have Labour peers suggesting the government should “help” the public to think of other ways to pay for healthcare.

Another Labour peer, Lord Desai, suggested bizarrely that patients should be issued with an “Oyster card” which is deducted whenever a patient uses healthcare, and patients should receive a “bill” at the end of the year, saying this would “help make it clear to people that a free National Health Service is not a costless one.”

Shades of Jeremy Hunt’s daft suggestion to put the price on prescription medicines.

But the problem with the NHS is not unnecessary demands, it is the sheer magnitude of people who need healthcare. An “NHS Oyster card” will not reduce the number of elderly people with acute co-morbidities. And if “consumer demand” is a problem, the solution is to turn patients back into patients rather than healthcare consumers, and remove the market.

Once their Lordships had had their say, Prior concluded for the government, saying that though he “personally” liked a tax-funded system,

“if demand for healthcare outstrips growth in the economy for a prolonged period, of course that premise has to be questioned.”

And he announced the ‘way forward’:

“I would like to meet the noble Lord, Lord Patel, and maybe two or three others, to discuss this in more detail to see whether we can frame some kind of independent inquiry—I do not think that it needs to be a royal commission. We are not short of people who could look at this issue for us; there are health foundations, such as the Nuffield Trust and the King’s Fund.”

Prior ignores the fact that the Kings Fund has already recently carried out an inquiry, the Barker Review, which rejected user charges and called instead for more taxes to pay for healthcare, in particular through a review of inheritance tax and national insurance increases. 

Both of which George Osborne has just cut, of course.

So Prior orders another inquiry, this time using people he has chosen and presumably people who will produce the desired result. Such a fundamental inquiry should involve the public and be held in public, but it appears Prior does not want the public involved.

Is Prior, in announcing an inquiry into so fundamental an issue, acting above his paygrade as an unelected junior health minister?

And are we being nudged towards an inefficient, unfair ‘pay NHS’ in the only way possible – undemocratically?

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Editors’ note:

We’ve been inundated with people asking how they can help fight this. We suggest contacting your MP and pointing out to them that the government health minister, Lord Prior, has just suggested to parliament that he plans to launch an inquiry to consider whether we should move away from a tax-funded NHS towards one funded by insurance and co-payments.

Ask them (if they are a Conservative MP) or ask them to ask David Cameron in parliament (if they are not) whether it is now official government policy to consider such a move to an insurance or user-fee funded NHS, away from the core principles of the NHS that have been in place since 1946?

You might also want to remind them that David Cameron said in 2011:
‘Let me make this clear – we will not be moving towards an insurance scheme, we will not introduce an American-style private system. In this country, we have this most wonderful, precious institution and idea. That whenever you’re ill, however rich you are, you can walk into a hospital or surgery and get treated for free. No questions asked. No cash asked. I will never put that at risk.’

And ask your friends to do the same!

About the author

Richard Grimes is an NHS campaigner.

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