Living Off Immoral Earnings

The most interesting message from what was a widely trailed and rather dull budget, was the implicit view it gave of the Tories' perception of our country and its people. The announcement of an intention to make us the cheapest country in the G7 and the emphasis on the phrase 'open for business' made Osborne come across as less of a worthy guardian of the nation's finances and more of a rather desperate pimp. The graphic indicates that, even before the 2% cut in corporation tax, our rates were much lower than the other major capitalist economies. This is the explanation for our failing infrastructure and highly unequal income distribution.

Those who gain from the budget proposals are not shy about expressing their delight, as a lengthy selection of comments on the FT website demonstrates. Entitled 'Business Speaks' it may have provide an apt title for the budget as a whole. Round 1 was the attack on citizens' incomes in last autumn's public spending review; round 2 is the sharing out of the proceeds to business bosses and their shareholders.

While the Tory action in favour of the interests of capital is true to form and unsurprising it follows the years of New Labour governments that did nothing to defend the interests of the class that party was formed to defend, but implemented policies to enhance in the share of the national product going to capital. The tax burden on individuals has increased rapidly (from £48.8bn. in 1989/90 to £109.5bn. in 2002/3 and £156.7bn. in 2008/9) while that for corporations has grown more slowly. Despite a massive growth in corporate profits during the same period the tax they paid rose from £21.5bn. in 1989/90 to £29.3bn. in 2002/3 and £44.9bn in 2008.*

And a political elite that pimps its people often pimps its environment too. So the land is opened to rape and pillage, with local development plans torn up, depriving the elected politicians who know and care about their local area of any power to resist development for the sake of profit and growth for the sake of growth. Greenbelt, habitat for rare species, valued leisure environments - none shall stand in the way of a few more points on GDP and larger profits for property developers and the construction industry. The decision to remove the need to apply for change of use when converting office buildings and shops to houses is typical of the drive for profit rather than a policy of considered economic development. The designation and auctioning of development land is another example of the heedless generation of cash.

The phrase 'race to the bottom' was revived to describe the situation where corporations rule the world and can force governments to outbid each other to cut taxes and environmental standards. There is no evidence that this improves the economic performance of countries, and it is frequently disastrous in social and environmental terms. We only have to look across the Irish Sea to see where the policy of making yourself cheap for business, the 21st century version of the putting out system perhaps, leads to. If unstable, unreliable growth, with the returns shared unequally and at the expense of social cohesion and environmental destruction are what you are looking for, then you can be sure you have the right Chancellor to provide it.

*Adam, S. and J. Browne. 2009. A survey of the UK tax system. London: Institute for Fiscal Studies.
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A Budget for Growth or a Balanced Budget?

The voices of capital have been flooding the airwaves for some time with their demands for the budget. We already know that this will be 'a budget for growth' aka a budget that refuses to accept the planet's limits and permits a tiny elite to profit at the expenses of other species human and otherwise. So what can we expect to see from this 'budget for growth'? As Simon Jenkins points out, it will be the bankers, corporate bosses and corporate investors who will decide. His mockery of the so-called Project Merlin, headed up by Barclays boss John Varley is right on target. From spivs to wizards in a few short months.

A 'budget for growth' can be interpreted as a 'budget for business'. Vince Cable weakness was made clear by the secret recordings of his boasting to constituents: vanity. His speech at the Mansion House on 3rd March demonstrates a similar tone, together with an unpleasant attempt to cosy up and laugh off his former critical line with both bankers and business.

Cable identifies his central task as finding a way 'to strengthen a framework in which the private sector can grow the economy out of its current problems', which neatly addresses the deficit problem while ignoring the more fundamental environmental problems. The 'animal spirits' of our entrepreneurs are to be unleashed, while capital is to be encouraged to be more mobile than ever, a clear demonstration of the highly pro-capitalist nature of liberal economic policy. This also applies to its policy towards exercising social control over business. Far from the tyrannical opponent of corrupt business we have been led to expect, Cable undertakes to 'fight damaging regulatory impositions from the EU like the Working Time Directive'.

Perhaps most damaging of all, the speech contained a clear suggestion that the countryside would be thrown open to heedless profit-driven development in a desperate attempt to restore economic growth without regard to the environmental cost. We can expect to see Osborne's Economic Enterprise Zones being given special dispensations, since the underlying logic is one of growth at any cost.

For the first budget from the greenest ever government one would expect a genuinely balanced budget, that is to say a budget that prioritised the need to balance our demands with the planet's limits. This is the real balancing that is required, alongside a rapid shift away from the emphasis on finance and towards encouraging real production in the sectors required for the transition to a low-carbon future.

A policy to bring about this balance would be one that matched the money banks take out of the economy through bonuses with money invested in the sustainable economy. New legislation to equate annual windfall taxes with the amount banks allocated to bonus and other incentive payments could free two birds from one cage: putting a downward pressure on excessive salaries while generating revenue for investments in the public good.
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