One simple way to ease the pain – cut taxes

Mr Boom (Brown) and Mr Bust (Darling) have achieved the recession that their Labour economic policies were always going to deliver – as Merv ‘the Swerve’ and Mr Boom admitted in the last few days. Now, having created a bad situation for the country’s economic and financial position, can they perhaps ease the pain?

Alas, no. Their economic policies have very much been about government intervention – the bank bailouts, nationalisation, the ‘spend our way out of the recession’, and Keynesian (a swear word if ever there were one) spending on public works.

There is one way by which this gutless Government could ease the pain. It is quite simple. They should cut taxes.

But unfortunately that is beyond the leftwing ideologues who run the country. Their socialism has been revealed, as the only way they know how to respond to an economic downturn.

How much longer people in the UK have to suffer from Labour’s policies is anyone’s guess. Tax cuts are the only way to ease the pain, but this lot aren’t going to deliver those.

Will anyone?

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£6.50 an hour is hardly ‘social justice’

Low-paid council workers are right to strike for better wages in the current economic context.  And yet there are many economic fallacies – in fact, outright lies – being bandied about by the treacherous, traitorous Labour Government.  These are the very people who have suffered most as a result of 11 years of Brownian economic policy: and yet many of them will have rejoiced at Blair’s 1997 election victory and will have faithfully voted Labour in every subsequent election.

Why do I support a strike by UNISON members?  Because improving the pay of the low paid in the economic climate caused by Brownian-Darlingian economic mismanagement, the ‘credit crisis’ and rising prices is morally right and socially just. 

Let’s clarify two facts to begin with.  First, 250,000 low-paid public sector workers on £6.50 an hour (of whom 75% are women, according to UNISON) have rejected a derisory 2.45% pay offer.  So it’s not just about low-paid workers (on around £13k a year for a 40-hour week) who need improved pay in order to be able to pay the bills, school uniforms, mortgage or rent etc, but it’s about equal pay for women.  These workers provide essential services such as:

social workers, housing benefit workers, rent collectors refuse workers, school meals staff, teaching assistants, cooks, cleaners, architects and surveyors.

These workers have been hammered by the 10p tax rate debacle and by other factors such as rising petrol and food prices.  They’re now seeking a 6%, or 50p an hour, increase in their pay.  Darling’s attitude is that, ‘we have introduced the minimum wage so there.’  However, it was never supposed to be a maximum wage. 

Second, the economic fallacy that increasing the wages of low-paid public sector workers would be inflationary.  This is an outright lie.  This is a small part of the workforce which is in the public sector – therefore, their wage increases do not increase prices of private sector goods and services. 

Yes, the money would have to come from somewhere – council tax or from Central Government – but it is simply not right to say that this scenario is similar to the 1970s winter of discontent.  There is no hyperinflation like then and food price rises are largely due to external factors as well as the actions of City speculators and the biofuel industry, as last night’s Dispatches reported.

So there will be a strike and hopefully the Government and the councils’ employer association will see sense on this matter.  And save these low-paid workers from financial ruin.  But let’s not forget that the Government has got these workers into this mess with its policies. 

UNISON should have broken its links with the Labour Party in the interests of its members – do low-paid union members really wish to see their money go into the coffers of the Government that has ruined them?  And the union should not bankroll Labour at the next election – all they’ll get is slapped in the face.

Amazing as may sound to many trade unionists, the interests of UNISON members would be better served by a Government that implements radical low-tax policies for low-paid workers (as advocated by Conservative Home’s Tim Montgomerie).  If public sector workers on £6.50 an hour could keep more of their own money, then there wouldn’t be any need for this strike. 

Labour makes the “Poverty Trap” worse: it hasn’t been the party of the working class for a long time

As someone whose father worked in a low-income job, I know what effect this has on the family finances.  But people who work in these jobs, when they could just as easily claim the dole or incapacity benefit, are the unsung heroes of the UK today.

Labour’s hatred of these people, who could potentially have been its staunchest supporters (and many of whom probably were in the past), is reprehensible.

Not only has Labour ratcheted up the “Poverty Trap”, where people are better off on benefits than in work, by a variety of measures including the structure of its tax credits system.  But now, as BBC News reports, by abolishing the 10p income tax band, the Government:

penalises childless people in low-paid jobs. The Treasury Select Committee warned the ‘main losers’ could be deprived of as much as £232 a year. Chairman John McFall said they were an ‘unreasonable target’ for the tax simplification measure.

How many more people, whether white British or, in many cases, black and Asian, (and including a lot of women) are going to be forced into worse economic conditions and possibly out of work all together, by this discredited, despicable Government?

On a day on which, for many people, income tax falls from 22p to 20p in the pound – only to be cancelled out by the abolition of the 10p band – I would not even soil the phrase “tax cut” by using it to describe this dishonest policy by Brown and Darling.

What are needed are genuine cuts in taxation for people on low income – whether Single People, Couples without Children, or Families – to incentivise work and also to reward those who actually are working. 

Tax cuts for the rest of us could wait until later, but at least can we stop penalising the people who don’t have to work but do because of a “work ethic”, or because it makes them feel as if there is meaning to their lives, or for whatever motivation.

It is also time to stop the lie that Labour is a Party for the working-class.  It gave up that distinction a long time ago.