Charles Moore on Tories and Labour

What are the two main parties' core beliefs? Lord Moore in The Spectator  The Spectator 1 June 2024 asks for clarification about:

 '...current confusion in which Tories hint at approval of socialist principles and Labour of capitalist ones,...' 

What clear choices are there for the ordinary voters on polling day July 4th?

Maybe the only clear choice is about competence? The decline in skills in managing public affairs over the long Tory regime after 5 prime ministers in 14 years does not inspire 'More of the same please'. Is there a chance that a fresh lot would do a lot better? Here's hoping... As Moore implies they are really playing a similar song with only slight variations and they don't have  anything very new to envision us with. Are the Lib-Dems any different?

If we are really in a capitalist system does that explain the growing need for food banks? If it is socialist why are the food banks needed at all with taxes the highest for 70 years?   Has socialism failed too?  Why is it becoming more difficult to buy a house on an average salary? Why are housing rents ever increasing? OK, we are in a mixed system - part socialist part capitalist - but are there any alterative tweaks to think about?

There is a system change that would begin to sort the inefficient running of the economy which the food banks and shortfalls of the NHS show up - after all,  technological success is not an issue so the issue is fairness. A new way would focus on where taxes comes from, how welfare is handled and how citizenship should be fairly recognised.

Tax reform is need to source a large input to the public purse from Land Value Tax  instead of from income tax and other taxes. The property market mirrors the speculative aspect of capitalism and brings  untaxed gains to homeowners when they have done nothing to produce the added land value. What such free lunch do renters get like that? Separating the land value from the house value  (about a quarter or a third of the Rightmove or Zoopla price) shows the value that should be taxed on an annual basis. The amount would need to match the average income tax currently paid so that for the period of the tax reform  any income tax paid would be a rebate allowed  against the charge for land value.  

There is an added green and a housing benefit to land value taxation in that it would encourage the development of land. A house could be enlarged to build rent-producing rooms under the same land tax charge. With more homes built to cover land tax charges on vacant land with planning permission, houses would become more affordable.  The failure to build enough homes has been a feature over decades  - land value tax is an incentive to build more - whilst Help to Buy schemes merely inflate prices by adding new money into the existing housing stock. 

Welfare reform should be included in this LVT tax shift by instituting a regular unconditional Universal Basic Income (aka: Citizen's Income). This should eventually replace most of the welfare benefits which are clearly inadequate given the food banks and housing benefit needed. The individual fine tuning of welfare benefits now needed would be  reduced  bringing large admin savings. The UBI would not be conditional on work and it would be provided for citizens only. These changes would make fairness for people a new feature of our socio-economic system, reducing the centralising nature of the state and curbing capitalistic power.  

Banking reform could add to the UBI sources (see this Blog elsewhere). For other banking reforms and how banking works see:  Charles Bazlinton - YouTube  .

posted  by Charles Bazlinton  author: The Free Lunch - Fairness with Freedom The Free Lunch - Fairness with Freedom 

James Robertson

James Robertson the pioneer of alternative economics has died (Obit. The Times 18 Jan.    Guardian 6 Dec 2023 ).  Through his writing and lobbying he drew together several strands of pioneering reform such as government reform, environment issues, money creation, land value taxation, citizen's dividend, et al., which are now generally known as New Economics or Green Economics.  

From 'Creating New Money' (NEF 2000) with Joseph Huber, to his later broader-based 'Future Money - Breakdown or Breakthrough?' (Green Books 2012) he provided indispensable research for anyone lobbying for change from the flawed entrenched economics of the 20th century to a system more based on the common good. His life's work is accessed on his website which is an excellent resource for research into these and many other issues.

He shows how the wealth intrinsic to common resources generated by, or available for the use of society as a whole, such as money creation and the natural resources of the earth including land value, are captured by special groups of people for their private use. Meanwhile people whose ordinary work, enterprise and proportionately high taxation add to the wealth flowing from those resources  but often have little or no share in that wealth.

As an example of how he helped those who were promoting the same issues I recall a Land Value Tax conference in 2006. An academic speaker had explained LVT but was perplexed as to how it might be made politically acceptable. In the lunch break I spoke to James who arrived to address the conference later and said that no one has mentioned citizen's income (or C.Dividend) as a means of making LVT more acceptable. When he spoke later he kept referring to CI and ..'I will bring more detail later...' and ended by giving a comprehensive view of how the new economics might be achieved with CI. It was the first time I had heard CI and LVT mentioned at a public event. Since that time the issue has become international with CI experiments being conducted. Progress is being made.    

Posted by Charles Bazlinton author: The Free Lunch - Fairness with Freedom. The book covers many aspects of the New Economics.

Jubilee - A very suitable word?

Great words get borrowed and highjacked for quite different purposes.  'Jubilee' was originally 'a year of emancipation and restoration'  (OED) in ancient Jewish history when people who had lost their family land through debt and poverty went back to it with all debts wiped out. It was a time of  great rejoicing and was unmistakably introduced by people going through the land blowing ram's horn trumpets announcing 'Proclaim Freedom'. It was the ultimate levelling of wealth from the time of the previous Jubilee after which some people had prospered whilst others fell into poverty. See the Bible: Leviticus 25:8-10. The purpose of Jubilee was to reset the economic  imbalances and was pointedly political. It restored control to the people. 

There were not to be kings to accumulate wealth to themselves and their court, and the repetition of cycles of Jubilees would guard against permanent accumulations of land control and enable the poorest to become self-sufficient again. You were not able to purchase land ownership rights, only the harvest rights for limited years. The system guarded against anyone assuming kingly status through wealth which would endanger freedom and the common good. 

Amazing enlightened times! The entire Jubilee year was to be a holiday. Our recent Jubilee celebrations, whilst fairly acknowledging that our Queen as Head of State has been a benign and gracious holder of the office, achieves nothing in the spirit of the original Jubilee for ordinary people. Apart from one day's holiday. 

Maybe news from Ukraine will point the way to a revival  of a people-centred Jubilee ideal? Alexander Rodnyansky, a Cambridge Professor, is now Economic Adviser to  Volodymyr Zelensky, President of Ukraine and The Spectator 4 June 2022 reports: 

    'he says he is interested in establishing  universal basic income throughout Ukraine: a fixed cash payment for residents rather than a network of welfare benefits which leads to inefficiencies in the system...We could be the first.'  

Jubilee years have been celebrated - quite bizarrely given the origin - for some centuries to note anniversaries of rule by monarchs. Why not a people's Jubilee in the spirit  of the common good?  We are not able to re-apportion land ownership in our day but land values are identifiable and could contribute to a universal basic income. See elsewhere on this Blog as to how it could be done. Recapturing the 'Proclaim Freedom' spirit of the original idea with a Peoples' Jubilee by  establishing a Universal Basic Income (also know as Citizen's Income) is needed.  

posted by Charles Bazlinton, 4 June 2022   Author: The Free Lunch - Fairness with Freedom.    

Hartlepool levelling up: Was that it?

What did 'levelling up' mean in the Hartlepool swing to the Tories?  The Hartlepool constituency, returned a Tory MP Jill Mortimer, 'farmer and business woman', after a 50 year run for Labour. That day was also the vote for the Tees Valley mayor and Ben Houchen won a resounding victory. Perhaps the Mayor Houchen factor was at work. Perhaps it was that in  Hartlepool with the Labour candidate still an EU fan who wants a second referendum, and with Hartlepool  very strongly Leave, maybe that prompted the strong rejection. Who allowed that to happen?

Ben Houchen, in winning his first Tees Valley contest in 2017 as a Tory promised to nationalise the local airport which he did and it created many new jobs.  Nationalisation is a policy borrowed from Labour.  Houchen has always said he is locality oriented and the use of socialist policies shows he is a non-ideolgical Tory.  The Boris-Rishi government has supported his Tees Valley projects - including environmental climate change schemes - by directing spending to the area. Also Treasury North, which is a partial government departmental move to Darlington, is a rather socialist, state planning idea. It probably helps in all these local changes that Chancellor of the Exchequer Rishi Sunak holds a nearby constituecy.  

Freemarket conservatives wanting small government (don't move but reduce the Treasury?), low borrowing and 'let the market rule'  are rare these days. Covid-19 financial support has meant Tory central government money is now always on tap for lots of schemes. The (allegedly) penny pinching austerity gloom of the Cameron-Osborne era is well gone, and now seen merely as anti-Labour sound bites, but which helped dampen expectations of government-directed productive investment which now the New Tories are unashamedly borrowing from Labour.  But remember: the high priestess of the free market, Margaret Thatcher secured a deal for Nissan in Sunderland in the 1980s with a  special central government money deal for Nissan.     

So the Conservatives are doing what is needed to remain in power whilst favouring neglected voters by boosting their local economy with cash handouts. Old fashioned pork barrel politics, as ever. The latest scheme is the Community Renewal Fund which will share £220m with 100 favoured places in a year and five of those are the five towns of the Tees Valley. Red Tories are in town.

The problem with such politics - sensible enough given the limited vision - is that only some groups of voters are favoured rather than producing a fairer outcome for all. Under Old Labour it might be such as union members,  managers of state institutions, and home renters; under Old Conservatives it might be shareholders, capitalists eager for state grants and home owners. 

When will overall fairness prevail? Instead of a hope that a trickle-down of government money may come my way via my Mayor, why not each citizen respected as contributer and beneficiary of a good recovering economy?   The previous blogpost on Universal Basic Income  illustrates how that idea of a payment to everyone unconditionally is well researched to be affordable - 'revenue neutral'. Even better an extra measure would be the funding of UBI to include land value tax charged on the land value underlying all homes, and allowable against income tax,  along with a reform of council tax. Renters would benefit as they would pay no charge, the landlord would. 

We need a re-set in our politics and economics in favour of fairnes for all, not just for instance the homeowners who are benefitting  from a housing boom. That would be better levelling up. Our society is becoming increasingly divided as defined by owning or renting a home. Renters are being sidelined as they have no unearned nest-egg accumulating on the value of the land with their house as homeowners do. We all contribute to our economy as we work and run things and a healthy economy raises house (actually land) prices, but that value is soley due to land ownership. Too bad if you rent your home, no level playing field for you from your contribution, it all gravitates down to the owner. What's fair in that?

Posted by Charles Bazlinton author The Free Lunch - Fairness with Freedom

 

Universal Basic Income: 'Fasten the seatbelt before hitting the wall' - Ronnie Cowan MP

Following 100,000+ votes for the petition in favour of Universal Basic Income (this blog March 19 2020) a Parliamentary debate was held on October 13th in Westminster Hall .  

The Debate Pack  for this gives a clear overview of the idea of a non-means-tested benefit (like the long-standing Child Benefit)  and should have prepared the Minister for Work and Pensions, Will Quince for a considered reply to the request. But he was scathing in his response.   

    ' when we even begin to think about introducing a UBI, we see that not only would the   cost  be astronomical, but the Government would have to increase taxation mercilessly' 

Clearly his department had not been allowed to give him a balanced view, for instance he rubbished the Finland UBI pilot trial without checking out the benefits, as Chris Stephens MP pointed out:    

    'Surely the Finnish model demonstrated that people rejected precarious work and that  employers had to increase pay and model terms and conditions. It is just not the case, that the Finnish model suggested a disincentive to work.'

The cost of UBI has been carefully assessed by the Citizen's Income Trust to be affordable. 'Strictly revenue neutral' is their phrase. It is very easy to rubbish a scheme by choosing a high UBI rate and showing it is unaffordable but the CIT sets a meaningful rate and shows it would be affordable for the taxpayer and effective for welfare. Additional benefits would accrue when such people as family member carers of the elderly might be more able to continue giving their care when adding their UBI payment to income from a part-time job. It could make countless family-oriented care situations more possible rather than leaving the state to pick up the total care bill at a far higher charge. 

Annie Miller's book  Essentials of Basic Income  give throughly researched findings which the Minister also failed to acknowledge.

Despite the huge financial measures that Covid-19 restrictions have forced on the UK government, Mr Quince is ignoring the many welfare gaps a UBI might help him to fill. The media is full of such comments as: 'government ''wilfully ignoring'' ' sectors of workers like those represented by The Association of Independent Professionals and the Self-Employed  ( 'Devastating gaps in aid for self-employed' The Times Nov 3. 2020).   

Some of these support schemes depend on a firm's previous profit records, so a new business start-up has nothing to show for the government to match with grants or income top-ups. Many  new businesses might be formed if UBI was there to encourage people to make a start by giving them a guaranteed small regular income. It is common knowledge that it is new businesses that create new jobs. Besides, extra UBI money in the hands of everyone will be spent and give a boost to the general economy. The governemnt should launch a pilot scheme for road-testing UBI in the UK.

It is reported that some billions of pounds handed out through various business support is likely to have been fraudulently acquired. Let's start a UBI scheme that will enable new jobs to be created honestly and to address the worst povery cases directly - with cash in the hand guaranteed to deal with unforeseen emergencies.  

In The Times Mark Littlewood** (Universal basic income is not the answer to the welfare question, Nov 2 , 2020) writes a really good summary of some of the benefits of UBI (despite the title he sounds half convinced):

• the attraction of UBI is its simplicity
• means testing would be handled through taxation  
• meal vouchers for school children in school holidays would not be needed
  
• each household would have enough in cash for the necessities 
• about the existing universal credit scheme he says problems persist

He is worried about the impact on work incentives, but he should study the Hansard Debate Pack (link above) which shows, apart from the above Finnish model giving positive employment effects;  the Utrecht experiment yielded 'positive effects'  for employment for lower educated groups, and for the very long running Alaska Permanent Fund:  

    'Our results show that adverse labor market effects are limited, and, importantly, a small universal and unconditional cash transfer does not significantly reduce aggregate employment'

As Ronnie Cowan MP (Invercylde) said in the debate, concerning the huge numbers still under extreme financial privation under Covid-19: 

     'I am asking that we do something now before it is too late. We do not know what the final straw will be. We need to plan now, to go forward. It is wise to fasten the seatbelt before hitting the wall.'

The pandemic is likely to force the  government into finding a better way of handling welfare. UBI would do this and would achieve a move towards fairness, justice and an incentive to create new businesss and work. It would help poverty relief for hard pressed individuals and families, which causes Tories often promote. 

** Mark Littlewood is head of the Institute of Economic Affairs : 'we promote the intellectual case for a free economy, low taxes, freedom in education, health and welfare and lower levels of regulation.'   

Fair enough! That's what everyone would like if they had the income and the assets to fulfil that dream for themselves. When will the IEA think outside the narrow elitist box of the 'free' economy and market forces and realise that to empower everyone with a non-means-tested  basic income would help promote another of their aims of: 'creating a society that fosters innovation, entrepreneurship...' . 

Surely libertarians naturally favour a basic income for all? A new basic right for eveyone  - a  gain in freedom that they famously champion?

Posted by Charles Bazlinton author The Free Lunch - Fairness with Freedom