Vir Cantium

I'm right, you know …

Debt, Theft and Job Losses: The #UKUncut Manifesto

Suppose you were chronically financially inept and you regularly spend more than you earn. Now for a few years things work out OK; you figure out that you can get over the income shortfall firstly by selling the family silver gold, then by extending your mortgage every year – the bank’s happy to do it and interest rates are relatively low.

Then the banking crisis hits. Interest rates, driven by a sudden spike in oil prices, burst the bubble and suddenly the bank clams up. You also have to take a pay cut. What to do?

You could aim to cut back on your spending so that you’re living within your means. Yet there is an alternative: you’ve gotten by for years with a big mortgage without any issues, so why should it be a problem now? All these tiresome know-it-alls who say otherwise are just lying.

Sure, so some of your neighbours have had the bank repossess their places, but that won’t happen to you will it? Anyway, you know that the bloke in the big house round the corner is worth a few bob, and so, egged on by your dodgy backstreet accountant, you go round there, break in and nick some of his stuff – that’ll keep your head above water for a bit. After all, it’s not as though he’s your employer who might just up sticks and move to the next town is it? Although now you come to think of it, he did look sort of familiar….

Well, no guessing which is UKUncut’s preferred option.

So, let’s examine the world according to UKUncut.

As soon as you scratch the surface you get to the first problem: denial. Denial that the deficit is even a problem, that every country has public debt and still gets by. Except Greece, obviously. And Ireland. And maybe Portugal, Spain….

Even if they accept the need to cut the deficit, there’s the ignorance about how the whole thing came about. Here, they confuse the banking crisis (and subsequent recession) with the fiscal crisis that has been building up for ten years since Gordon Brown started spending more than he was getting in. The banking crisis may have been the pin that burst the bubble, but sooner or later, the borrowing would have caught up with us.

Alternatively they might accept the need for some cuts, but would rather they didn’t happen right now – rather like shutting the bills in the drawer to put off the inevitable.

To many UKUncut supporters though, all public spending is a Good Thing and the solution is never cuts (which are always to “vital public services”) … except to defence which, belying the political DNA at the heart of UKUncut, seems not to elicit the same breast-beating that an axe to the quangocracy or equalities industry does.

The “alternative”, apparently, lies with a magic wand they call tackling tax dodgers. Now, most people can understand the distinction between tax avoidance and tax evasion (the former being legal, under the Westminster doctrine). Conveniently, UKUncut see it all as “tax dodging” and so their ire is turned on business – a term always spat out, with the prefix “big”. In particular they accuse, of course, the banks.

Then comes the next example of financial illiteracy. If you’re upset at tax avoidance, which is an activity permitted by law, you’d think the way forward would be to protest to parliament or HMRC. But no, off you go to the local bank branch and sit on the floor like a sulking toddler, of course. As far as the banks caused the banking crisis (and ignore the inconvenient truth that irresponsible lending must by definition require irresponsible borrowing) via complex financial instruments, the “blame” lies with the investment arm of the banks, not the retail operations. Whatever, go ahead and have your singalong in the local Barclays.

One has to bear in mind, though, that the UKUncut kindergarten economics has been informed by the half baked financial witterings of the Grauniad and politicians like Chuka Umana, who claimed that Barclays had only paid 1% in corporation tax. This ignores key facts including tax being paid after the year end, and the bank’s taxable profits being offset by losses brought forward – a basic tax principle available to many businesses from the big banks to one-man bands. Clearly, UKUncut feel that making a loss is no barrier to paying tax. Way to help business and protect jobs! Maybe private sector jobs don’t count for as much in UKUncut-world.

(At this point it would probably be churlish to mention that the Co-op Bank, on the same logic, only paid 1.9% corporation tax. Not sure they’re on the list for any sit-ins though.)

Another popular target is Vodafone. This evil corporation “owes” £6bn in tax. As Christie has usefully and concisely explained, the alternative to HMRC settling with Vodafone would have been a legal process that may well have led to far greater losses for the Exchequer than the mythical £6bn.

Lastly for our little foray into the UKUncut mindset, we come to our old friend, the Robin Hood Tax. Forget the irony that Robin Hood was actually a winner of tax rebates (the actual legend was that he robbed from the Sheriff of Nottingham – not the rich generally – to give to the poor), the Robin Hood Tax would ultimately fall not on the banks but everyone, through either higher bank charges or interest rates, through the knock on effects on those products and services who use the financial instruments that would be affected by the so-called ‘tiny tax’, or simply by the flight of banks and other institutions abroad, taking jobs with them.

So, there we have it: the UKUncut manifesto boils down to economic myopia, opposition to the cuts, or perhaps just to delay them a bit – they’re not quite sure – expecting people to voluntarily pay more tax than they have to, plus an unworkable tax modelled on a misunderstanding of the story of a mythical historical character, all the time hiding behind the sofa when the bailiffs turn up.

Yep, that’ll work.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: