Dear Philip Hammond, Chancellor of the Exchequer

A letter to the Chancellor of the Exchequer from Prue Plumridge

I feel I must write to you in response to your speech at the Conservative Conference in which you referred to the medium-term challenge of dealing with the public finances so as not to burden future generations.

Aside from the fact that your government has been promising to deal with the public finances for the past seven years whilst regularly moving the goal posts for achieving it, failed Tory promises show astonishing ignorance about how the state finances work in practice.

Or, is it, perhaps, that you do know but prefer to keep the public in the dark with fake messages about household budgets, living within our financial means, paying down our debts and saving for a rainy day.

You (and George Osborne before you) have abused the trust of the public with your myths and lies about maxing out the credit card and going broke.  Neither of which can happen in a sovereign currency issuing state.  I’m sure you know that really.  In truth, this has suited the pernicious ideology of the Tory government which claimed that Labour overspent and austerity was unavoidable.  Neither was true.  But, as a result, seven years of cuts to public spending have led to rising poverty and inequality through the redrawing of welfare provision and the decimation of public services not to mention the on-going attacks on employment rights and the rise of insecure working and the gig economy.

And, all the time, while you tell us that there is no money for those services upon which we all depend from the NHS, to public infrastructure and services and local government we are witnessing the ongoing transfer of wealth into ever fewer hands and public money being poured into corporate pockets.

Admit it, Chancellor, this exercise has never been about necessity.  It has always been about ideology which can be best expressed in the words of the former head of John Lewis who said recently ‘the only way to provide good public services is to ensure a vibrant business economy’ …… which is not only neoliberal bunkum trading on the lie of discredited ‘trickle down’ but shows how this false narrative dominates the mainstream and infects public understanding.  To quote Richard Murphy from Tax Research on the NHS  (and whilst he doesn’t mention it, public services too)

there is no reason why we should not have health care in thirty years’ time, whatever that care might be…… All we have to do is decide we want it. Then we can pay for it. It will not be a matter of not affording it. It’s just a matter of setting priorities. “

Moving on to your claim that borrowing takes money from the pockets of future tax payers is plain wrong to put it bluntly.

As the economist Professor Bill Mitchell notes “Each generation chooses its own tax rates and that means that the mix of public and private sector involvement in the economy is a political choice”

In this case yours.  Government spending in the form of deficits (assuming of course a government that takes seriously its responsibility for the well-being of the nation) can work on behalf of citizens to create a healthy economy and a fairer distribution of wealth.  This not only helps today’s citizens but also creates investment in public education, public health and other infrastructure which benefits both current and future generations.  Or, of course, it can, as in the case of the Tories and already noted, represent wealth transfer to the already rich and public money leaching into private corporate pockets.  And just to be clear as I can hear you whispering but what about the printing presses, inflation and Zimbabwe I am not suggesting that deficits don’t matter – they do but not in the way you tell us they do.  The fact is that whilst governments are never revenue constrained spending will always be limited by available productive capacity and resources.  And that is what has to be managed.  It should never be about balanced budgets rather it should be about creating a balanced economy.

So, Chancellor, in conclusion, I will finish by saying that a time is coming when you will no longer be able to fool the public into believing your household budget version of the state finances which has claimed that we can’t afford public services, the NHS and the welfare safety net.  They will then understand that you made a choice to deny them the public infrastructure that ensures a healthy economy and the well-being of their families.  They will understand that you played with their lives and their survival.

It is to be hoped that in the near future you will indeed have plenty of time as a shadow minister in her majesty’s government to reflect on where the Tory party went wrong but then again you probably won’t.

Regards

Prue Plumridge

5 thoughts on “Dear Philip Hammond, Chancellor of the Exchequer

  1. Great piece Prue Plumridge 🙂

    “… a time is coming when you will no longer be able to fool the public into believing your household budget version of the state finances which has claimed that we can’t afford public services, the NHS and the welfare safety net… ”

    Indeed it is, and if citizens wish to see that era of monetary and macro economics enlightenment emerge even faster from the brutal dark ages of neoliberal ignorance, please #LearMMT.

    And the UK Labour party needs to stop listening to ignorant self serving voices of 19th century economics mysticism, like James Meadway, or Simon Wren-Lewis, who continue to peddle the false notion that UK is not in charge of its own sovereign currency, and instead is beholden to financial ‘markets’.

    Are you listening John McDonnell? The UK is *issuer*, free gratis, of its own sovereign free floating currency. By definition it can never have a ‘debt’ burden, either now, or for future generations.

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  2. The key phrases in this letter should be tattoo’d (painfully preferably) on the arms (and foreheads) of all the numskull commentators, journalists, and politicians who keep supporting the constant raids of the 1% on the economic endeavours of the other 99%, by baiting the public about the ‘dangers’ of “running out of money”, when this is utter (factual) nonsense for the UK as a sovereign country with its own currency.
    Labour (inc Ed Milliband) take note too!
    Let’s refuse to even accept this type of statement as a valid input to any debate and instead robustly defend the right (and indeed duty) of the government of the day to make proper choices for the country as a whole and for the long term. The “available” money is NOT and NEVER has been the relevant parameter. Choosing the right projects to spend money on is: and that is a political/social choice. Finding the money is not.

    It’s interesting to note (5th October) that the Tories, having attacked Corbyn’s ‘magic money tree’, suddenly find a ‘proper’ tree in their garden which suddenly produces a £10bn bribe to developers under the aegis of Help to Buy, and promises £9bn to students. We need a Monty Don to explain the differences in these trees!

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  3. Pingback: Dear Philip Hammond, Chancellor of the Exchequer | Think Left – leftwingnobody

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