Will our Grandchildren be grateful to the Tory/LDs?

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Somebody Think of the Children

First posted on October 27, 2012 by 

‘I think we have a moral duty to the next generation, to our children and our grandchildren, to wipe the slate clean for them. We set out a plan, it lasts for about six or seven years, to wipe the slate clean. To rid people of that sort of dead weight of debt that has been built up over time… We owe it to the youngsters of today to lift that dead weight of debt off their shoulders.’

Nick Clegg, May 2012

Of all the justifications for austerity, the one which says we owe it to our grandchildren to deal with the debt is probably the most emotive. The national debt currently stands at £1 trillion and despite what Nick Clegg says (in the quote above he confuses the debt and the deficit), it’s set to rise year on year. Right wing commentators (such as Fraser Nelson) love to remind us this is £20,000 per person which will need to be paid off through higher taxation in the future. Now it’s true £1 trillion is certainly a lot of money, but is it true that our grandkids will suffer if we don’t deal with this now?

I would argue that the exact opposite is true. What we leave to our grandkids should be measured in real things. Will there be enough housing? Will our roads and railways be adequate? Are our schools good enough? Have we invested enough in the decarbonisation of our economy? In looking to cut now, I believe the Government are on the way to ensuring the answer to all these questions is no. That will be the real legacy we leave to our grandkids. By failing to invest for the future today we will bequeath a less prosperous economy, and a huge debt pile because at the moment austerity is failing to reduce the deficit.

But is this huge debt pile a problem? If it’s been built up investing for the future, it will be less of a problem than if it’s been built up by paying people not to work, but in both cases though, it’s a distributional issue rather than a funding issue. Every £ of government debt is an asset to someone else. The question is who holds these assets? If it is mainly those at the very top, that may be a bad thing. If it’s going mainly to support the retirement income of pensioners, maybe that’s not as bad. We could rectify this distributional issue through the tax system.

So who holds the national debt at the moment?

This data come from the Treasury and is up to date as of Sept 2012. You can see that following QE, the Bank of England now holds over a quarter of government debt. Any interest the government pays to the Bank of England must be returned to the Treasury as profit. So this portion of the debt is no burden on anyone. More QE is likely, so this proportion could rise.

About a quarter is held by the insurance sector. This includes pensions. Most pension funds hold government bonds as part of their porfolios as a way of generating low risk returns, and debt interest payments go towards pensioners income.

The other sector with large holdings of UK debt is the foreign sector. This includes foreign governments and corporations. Just over 30% of UK debt is owed to foreigners. A lot of people may be surprised it’s not higher and are worried about what might happen if foreigners stop buying our debt. The UK is seen as a safe haven at the moment due to the turmoil in the Eurozone, but if there did come a time when the rest of the world stopped buying our debt, this would not mean the government would cease to be able to fund its spending.

It’s possible to view government debt issuance not as a source of funding, but instead as a way of controlling interest rates. The government could actually turn that 25% of debt held by the Bank of England onto 100% and stop issuing debt externally altogether. Some Modern Monetary Theorists such as Bill Mitchell view government debt as “corporate welfare” and think the practice should be stopped altogether.

In summary then, it’s right to think about the longer term and worry about what life will be like for future generations, but in promoting austerity as a way of reducing the debt burden for our grandchildren, what we are actually doing is ensuring they will be less wealthy than if we invested now in infrastructure, education and decarbonisation. I don’t think they will thank us for that, so we need to invest for the future  now to ensure they will be better off than we are today. In Mr Clegg’s words, “we owe it to our youngsters”.

This isn’t Dickens, it’s Today: Winter’s Cold, Homeless and Hungry

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As we approach winter, the shops are hoping for a seasonal retail spree and begin the ultimate display of commercialization. Whether people are celebrating a religious festival or a more secular affair, or perhaps just a get-together with the family, some will look to the Christmas period with excited anticipation.

There will be others with a dread of the loneliness and others with fear of cold and hunger, not just being unable to afford the fripperies, those oh-so-unwanted wasteful things, often manufactured in their millions by workers who work for a pittance, while those hidden and tax-evading profiteers’ obscene piles of plenty grow and grow forever tall like skyscrapers high above the real world.

No, beyond all that, many look to Christmas without a sustaining meal, adequate heating or a decent home. Deprived of these by government cuts to welfare payments, by escalating prices by energy companies, wages frozen, jobs lost, it is no exaggeration to predict unprecedented suicides this winter – and next.

Dickensian pictures emerge in our minds. Thoughts of the Victorian poor, a glimpse into history, denying today’s reality.

please-sir

These pictures will continue to haunt us until we break the self-perpetuating neoliberalism. It is in our hands to change. Brave politicians must rid us of the neoliberalism has destroyed society, and finally reject this flawed argument, and reclaim democracy.

Welcomed in the eighties as Thatcher’s bribe to the workers, neoliberalism, many now realize the dangers of policies which have led to:

HOMELESSNESS : There’s no place like home

George Young, recently appointed government chief whip famously once said “The homeless are what you step over when you come out of the opera.” I wonder if he is aware of the drastic reduction in life expectancy of people living with no home? Has he considered which policies add to the crisis?

Homelessness Kills is an analysis by the University of Sheffield of the mortality of homeless people in 21st Century England

Homeless people under 45 have four times the chance of dying than their housed contemporaries, the under 55s three and a half times, and the under 65s two and three-quarter times.

Homeless people are three and a half times 
more likely to commit suicide than the general population.

Shelter’s examination of the reasons for homelessness cites personal causes, structural causes and the reasons given by homeless people. Personal causes for homelessness could be tackled by intervention, counselling services and support from Local Authorities. Statistics look to rise further due to cuts to these services by the Coalition government.

Structural causes for homelessness can be directly traced back to previous conservative governments. In contrast to the policies of the post-war Labour government which built tens of thousands of homes, Margaret Thatcher began to deplete the housing stock by selling off council houses. Councils were not permitted to replace the homes sold, so there was no return. Householders took on the debts of mortgages and bankers are the winners. New house-owners now, with mortgages around their necks, dared not strike against workplace injustices, so Thatcher’s grasp on trade unionists tightened further.

Today we see land destined for homes,and with plans in place, unworked for years because the market won’t deliver a profit, regardless of people’s needs. There are people in need of homes, yet houses are unaffordable. The construction industry is profit-driven. Houses were built and bought, not for homes for people but for profits for building companies, or as a source of investment, people living lives without meaningful jobs, just buying and selling houses, so forcing house prices out of people’s reach. As a result, a working person’s wage is insufficient and Housing benefit is claimed, but it is landlords who benefit. A sensible policy would be to build the homes people need.The immorality of buy-to-let mortgages is clear. TV programmes focus on how to make a killing out of house speculation, never quite realising the stark and haunting truth.

ENERGY: Privatisation – Pumps up the Power ?

The power which was derived from privatised companies was more than could be generated from coal or oil, it is their ultimate power by which they seek to control us – a plutocracy over governments and nations alike, and this is not power which will be easily relinquished.

The Big Six reap profits from immoral earnings as many people cannot afford to pay their ever bills.

Caroline Flint , Labour

“Since this Government came to power, energy bills have gone up by more than £200, and last week three of the big energy companies announced another round of price hikes, adding a further £100 to people’s energy bills this winter. People worried about how they will afford to keep the lights on, heat their homes or have a hot meal deserve a Government who understand their challenges and have the ideas to provide the change that Britain needs and the strength to see them through.”

Last winter the Independent reported that fuel poverty deaths were three times the government estimates.

Some 7,800 people die during winter because they can’t afford to heat their homes properly, says fuel poverty expert Professor Christine Liddell of the University of Ulster. That works out at 65 deaths a day.

Fuel poverty is defined as when someone needs to spend 10 per cent or more on heating their home.

The new total – calculated using World Health Organisation guidance and official excess winter death figures – is four times as many fatalities as happen in road accidents each year.

The previous government estimate put the total of deaths relating to fuel poverty at just 2,700 a year. That was included in a report last year by Professor John Hills, who is expected to produce his final recommendations on fuel poverty next month.

Yet the latest Office of National Statistics figures show that there were 25,700 excess winter deaths in England and Wales in winter 2010.

Meanwhile the latest WHO research suggests that 30 to 40 per cent of the excess winter deaths can be attributed to fuel poverty.

Cuts to welfare benefits for the vulnerable and disabled have already been attributed to be responsible for 73 deaths per week.

Reclaiming our energy sources and a renationalisation of Energy and utility companies must be on Labour’s agenda. Ed MIliband is acutely aware that the Energy companies’ political grasp in global power can be loosened. His policy of introduction of Feed-in-Tarriffs for micro-generation projects such as solar energy has already made a difference to fuel bills for many. Even this wet summer, solar panels can meet 80% of energy needs on some homes. Community projects can generate electricity to benefit local communities, and more research directed to renewable energy sources. Public buildings such as schools and hospitals could be self sufficient.

But the Coalition are tied-in to the lobbyists’ agendas, and their own self-interest. Rather than pursuing green policies, investment in jobs and lower energy costs for all, they opt for the short-sighted to “invest” public money into fossil fuels, fracking and nuclear energy. As many shiver this winter, it is the Big Six Energy Companies and their backers who benefit, yet again.

HUNGER

Like property, and energy, even food is now a commodity for financiers to gamble with. Shameful Food speculation has led to hunger around the world.

There is sufficient food to feed a world, yet so many go hungry, children born with no chance in life.

In the UK today, the number of people going hungry is escalating, the demand for food banks escalating. In Coventry out of 306,000 people, according to the city council, 59,000 are living on the breadline. (BBC Report) And with the UK economy in double-dip recession, the word breadline is starting to mean something literal. The callous withdrawal of welfare support by this government, removal of the safety net intended to provide help for the vulnerable is literally leaving people with a choice of starvation or suicide.

Welfare cuts will mean 350,000 children will lose free school meals. In desperation, many are driven to steal to feed their children.

Meanwhile, globalisation is putting an end to our high streets. As with the Big Six energy firms, supermarket giants are increasing their power, diversifying into non-food such as banking and insurance. Supermarkets control food prices and exert buying power, closing down local shops, and are then able to maximise profits on own brands.

I wonder, where are initiatives for home-grown food? Land, left idle unused and fertile should be made available for allotments, for community groups and co-operatives.

The stranglehold of neoliberalism sees no limits, yet the inevitable end to the insatiable greed of unbridled capitalism, is a disastrous chaos.

Dickens’ Oliver said, Please Sir, “Can I have some more?” We demand it.

http://www.crisis.org.uk/data/files/publications/Homelessness%20kills%20-%20Executive%20Summary.pdf

Download pdf Homelessness kills – Executive Summary

Shelter: The causes of Homelessness

Independent: ( February 2012) Fuel poverty three times government estimates

Morning Star: How the Big Six Energy Firms are holding us to ransom

Tribune Magazine: The Families on their knees in Breadline Britain

BBC: The growing demand for food banks in breadline Britain.

Think Left:

Why Barclays and Co “can’t get no satisfaction from food speculation”

This government is killing people, Think Left