Thursday 11 November 2010

Fighting In The Streets Foretold

Well, it turns out the poll-tax rioters were indeed burnishing their rusty metal stakes in their dingy garrets after all.

And initial pessimism was well-founded. It's taken longer than I expected, but here we are, and they have to get it out of their systems. This process tends to take a while - years, not months from past experience - but it had to start soon, and now the battle lines are drawn.

It's by no means a bad position. This hasn't been simmering, it's boiled over immediately. As with the miners' strike, the Labour Party is inherently wrong-footed. The Crow tendency will be itching to pitch in, but the TUC as a whole will be bemused.

And the big unsayables are at last being said. It is indeed immoral that non-working families should be better-off than the famous hard-working families who featured so prominently in Gordon Brown's empty rhetoric - hard-working families who've quickly spotted who is really on their side. The Housing Benefit row was a perfect way of bringing it out, and if credit goes to Osborne for this, then I'm the first to give it, previous skepticism notwithstanding.

Many a hard-pressed copper is going to suffer in all this (hope the Home Office is as well-prepared now as it was in 1984): and in different ways, so are the many families who had been cruelly conned over many years (including the period of Thatcher's governments, be it said) into believing that mass idleness was a sustainable lifestyle. It's an evil, as Beveridge stated clearly.

Iain Duncan Smith's timetable is very protracted, and perhaps inevitably so. If we have political geniuses at the helm, as we are sometimes given to believe (G.Osborne, this means you), all their tactical prowess will be tested to the full over the next four years, to buy the time needed for the longer strategy to play out.

We shall see.



Budgie said...

I did say, when Tuition Fees were introduced by Labour, that if it had been the Tories who had done so there would have been riots. The coalition has miscalculated - they thought the sting had already been drawn, quite forgetting that the usual protesters are left wing thugs and need no excuse other than a Tory government.

Why didn't we protest about RIPA (etc), Brown's pensions hit, Brown's house price boom, Brown's gold sales, MPs' corruption, lack of the right equipment for the army, Bliar's lying, etc, etc?

Or, indeed Tuition Fees. And let's here no more pious sentiments about how university students should pay their own way. They already did. Because they earned more they paid more tax. Oh unless all this talk about flat tax rates was just that - talk.

Tuition Fees are just a way for the government to shift the effective tax take from 'next year' to 'this year' because they are short of a bob or two due to their own incompetence.

Budgie said...

Hear, hear. Here.

Andrew B said...

It is not so much incompetence as that governments could consistently win elections by handing out sweeties now and putting the bill for said sweeties in the bottom drawer.

People like getting benefits that other people pay for.

Things like tuition fees will be a soft touch as 50% of our children will not go to Universities and so why should half the population pay taxes so the other half can have a free education and then go off and earn more.

The same sort of comment applies to housing benefit - why is it fair that someone on state benefits can stay in a nice area when who pays tax and cannot afford the rent has to move.

People also have a highly developed sense of 'fairness'.

TB started deploying this concept over 10 years ago, and as S Flanders notes (iirc) that 'fairness' was dominating the discussion on the cuts.

It has taken a decade, but to me one strategic move the ConDems are making is to expose the above examples to public scrutiny and use them to re-define what 'fair' is. The above two examples are low-hanging fruit.

The next one is getting the long term unemployed to do 'voluntary' work.

There may be a few more easy targets, but I think it will get harder from here on in.

Anonymous said...

There are other fairness issues, of course...
The scandal of FTSE100 Exec Pay; the routine ripping off of small shareholders; multinationals playing different tax regimes against each other and spending more on tax accountants than tax payments.
Many "hard-working families" wonder why free education has to go but these other privileges remain untouched.

Budgie said...

The new system (Tuition Fees) simply shifts the tax burden around, it does not make it go away.

And now instead of moving towards a simplified flat rate tax system we are adding new ones (20%, 29%, 40%, 49% plus NICs). What a mess for no principle gain.

In the past ex-students who did earn more (not all do) did pay more in tax in any case. And would still pay more even under a flat rate.

Also as Tuition Fees climb low earners are less likely to go to university (no earnings for at least 3 years anyway). This is unfair under any system.

Jan said...

Yes going to university now depends on ability to pay rather than academic achievement or ability.

Old BE said...

Great post ND and I agree with Budgie that during the post-war upswing governments of all brands have simply handed out nice freebies to certain groups without even thinking about how they are going to be paid for.

Once you actually start thinking about who pays for and who benefits from subsidised higher education it starts to get very hard to justify.

It's one thing for the state to provide a ladder up for bright but poor people, quite another for the non-graduate majority to pay for middle class kids' finishing schools.

Budgie said...

The non-graduate majority do not subsidise students ("pay for middle class kids' finishing schools") - that would only be true if everyone earned exactly the same wage. On average graduates earn more - so, on average, they pay more tax.

As for "a ladder up for bright but poor people" - how are you going to determine who is "bright and poor"? By (costly and inefficient) bureaucracy and form filling? 'More earnings = more tax' is automatic and precise.

Tuition Fees at £9k will be a bureaucratic nightmare and is designed to deter the poorer half of the population from bettering themselves.

Old BE said...

I don't think it's designed to do any such thing. It's designed to stop the country from going bankrupt.

If graduates "on average earn more" then it will be easy for them to justify the debt.

Are you saying that some people's subsidies are better than others'?

CityUnslicker said...

I disagree too Budgie - the main design of tution fees is indeed to stop the Coutnry going bust AND to act as a deterrent to people doing kite flying courses as a way off the dole for 3 years. Labour's push for 50% graduates was madness. I can't find fault in letting the market find what the actual percentage should be.

Budgie said...

"It's designed to stop the country from going bankrupt." No, if that were truly what was desired we would scrap DfID and leave the EU (amongst other desirable policies).

"Are you saying that some people's subsidies are better than others'?" No, graduates will on average pay about £44k more in tax (marginal, at 20% IT, 11% NICs; based on Willets claim of £100k over a lifetime, after tax). That is on top of the current debt of about £23k plus interest. And the more complex the Tuition Fee system gets the more costly (and unfair) it will become.

"Labour's push for 50% graduates was madness." Indeed it was. So if money really is so tight we cannot as a society invest in our own future, then cap the numbers. This would then be truly a meritocratic system instead of merely rich kids' parents maintaining their families' advantages.

Anonymous said...

Budgie, the average cost of educating a undergraduate is about 15k a year. 3k a year he pays back out of the extra tax but lets assume the loan is not subsidised. The other 36k the government gives him now and he gives 44k back over the next 30-40 years. So to make the argument that graduates pay their way you have to assume interest rates are basically zero for the next 30-40 years.

Also it has clearly been shown under the last term of Labour that fees had zero effect on people coming from "poor" backgrounds.