...a blog by Richard Flowers

Tuesday, September 14, 2010

Day 3543: The Unions Don't Have to be Our Enemies – part one, a Land of Denial


Seriously, there are TWO ways this can go.

The Unions can represent their members' INTERESTS by working WITH the Government to pilot through the cuts that EVEN LABOUR said were unavoidable, with the maximum amount of attention paid to minimising the harm done to the most vulnerable, keeping the job losses to natural wastage where possible, freezing pay, showing restraint and keeping more workers IN work…

…or they can throw a tantrum, cause fuss and bother to the public whose jobs and taxes actually go to PAY public sector wages and we'll end up sacking a quarter of them.

It is all too obvious that the Unions and the more vocal knucklebrains in Hard Labour have been SPOILING for a FIGHT with the Coalition all summer.

Not a week, barely a DAY has gone by without some new pronouncement of how the Coalition Cuts are going to bring about the apocalypse: the poor will suffer ten times what the rich will; women will be hit harder; race relations will be set back a thousand years; young people will become a lost generation; old people will be rounded up in detention camps with a single winter fuel allowance between them; the North East will be targeted for extermination; cats and dogs living together; human sacrifice… hang on, that's Gozer the Gozerian


What's REALLY impressive is that the cuts HAVEN'T EVEN BEEN ANNOUNCED YET.

Golly, if only the Left had had such foresight when they were – you know – RUNNING THE DARN COUNTRY for the last thirteen years. Why they might have seen the end of the Housing Bubble and the Credit Crunch coming.

Tragically, no such PRESCIENCE is shown by Mr Mark Swarovski, writing in the Grauniad, who claims that there is no need to cut public spending by a single penny, because he's found a hundred and twenty billion pounds in unpaid taxes down the back of the sofa.

Even if you IGNORE that he doesn't know the difference between tax AVOIDANCE and tax EVASION… £25billion of his total comes from totally legal tax avoidance – i.e people not paying tax that that they DON'T HAVE TO PAY. Basically he's saying you should pay tax on your ISA… or when you sell your house. Fancy paying 40% of the profits when you move home? No?

Even if you ignore that, the figures are just plucked out of his hat…

According to the National Fraud Authority, the Government loses FIFTEEN billion to tax evasion, not the SEVENTY billion Mr Swarovski claims. Fifteen billion IS a lot of money and, as we've discussed before, ought to be a much more promising target, fifteen times more promising, in fact, for the Government than benefit fraud. But you can't just randomly multiply the figures by five in order to fill the gap in the Budget.

Actually, come to think of it that IS what Hard Labour Chancellors do to fill the gaps in their Budgets…

But even if you ignore ALL that… where does he think that that money is going to come FROM?

Extracting an extra hundred and twenty billion quid from the productive part of the economy… that really WOULD be: "taking money out of the economy just as it's struggling to get back on its feet".

Mr Alistair Dalek, former Hard Labour Chancer and Mr Frown's Sooty-puppet, has said that some of the recovery should come from private sector growth.

I couldn't disagree with him more: ALL of the recovery will have to come from private sector growth!

The Government does not produce any wealth. It doesn't grow food or fish the seas or mine anything from the ground, nor does it take raw materials and add value by manufacturing them into something else. The Government ensures the provision of essential infrastructure – transport, power, water, sewerage, peace (at least that's the theory behind having an army) – and can improve opportunities for citizens – through education, health provision and the welfare state. But these are support services. Government does not produce any wealth.

That is why the Coalition is actually CUTTING the tax on business. It's not just for FUN you know – and not, whatever the Trots tell you, to "make our class rich at the expense of the poor"! We're cutting Corporation Tax so that businesses will have more money to invest in jobs and in equipment, and so that foreign companies will move here or stay here.

In Ireland, the Irish Government RAISED its corporation tax rates… and all the corporations just LEFT. That is why the former Celtic Tiger is now a Celtic HEARTHRUG!

You CAN make a case for supporting construction workers through the recession by having the Government borrow to invest in infrastructure projects, new housing and school repairs (and no, Mr Bully Balls, we didn't ACTUALLY cancel the ones that were being worked on), but ADDING people to the Government payroll does NOT cause economic growth. Quite the reverse!

Every extra wage is one that has to be found by taking more tax from the private workers. More tax now or, if you borrow, more tax later.

Worse still, in areas where there is super-high state sector employment, the Government is actively sucking the best workers out of the system, undermining attempts to persuade new business to set up in areas where all the people with drive and initiative and brains are already in Government offices, leaving these areas a jobs wilderness.

So why is Mr Swarovski saying that we can avoid the cuts altogether?

Well, I'm afraid I have to be HORRIBLY CYNICAL and suggest that he knows PERFECTLY WELL what the economic reality is, but he is trying to deceive people – mainly his own Union members, but also the public – in order to wind them up for a fight.


More on this story later

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