Austerity and Entitlement

Civilisation is being dismantled in order to pay off debts that were run up by those who have somehow remained out of the reach of suffering. The bankers, who caused this global recession, are not suffering; the giant corporations (those “wealth creators” who have amassed billions through tax avoidance) are not suffering; it is only the ordinary people who are suffering and it is our heritage which is being robbed: schools, hospitals, museums, libraries, the arts, public amenities, the welfare state, fire stations, police stations… all are being closed or stripped back at an alarming rate.

Here’s a reality check: we are often told of health tourists who come to this country and take advantage of our NHS, to which they have contributed nothing, before slipping away without paying. This should not be allowed, we are told. Quite right too.

Having said which, by the same token it strikes me that companies who deliberately avoid contribution to our infrastructure costs and public services – by employing intricate arrangements to escape the payment of corporation tax – should not expect to be entitled to protection by, for example, our police or fire services.

Have you seen Amazon’s new office block at Smithfield Market? It’s a gigantic, gleaming structure of glass and steel. Here’s how it appeared in the Evening Standard:

Amazon HQ

That’s not the head office, of course – that’s situated in Luxembourg, apparently…

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About Fles

Early middle-aged (oh yes I am!), no longer long-haired but still speccy and decidedly still an increasingly opinionated git. I’m basically a believer in individualism, that everybody has their own perspective and inner-beauty. I try to find humour in every situation. I enjoy reading and writing poetry.
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5 Responses to Austerity and Entitlement

  1. vera ersilia says:

    Yes. You are right of course. BUT WHAT TO DO ????

  2. Alas the blame can not be laid purely at the doors of banks and multinational corporates, Government spending is simply too high. It was too high in the boom years and there were significant budget deficits; now its normal and expected that in times of economic decline and just post recession there will be deficits but when you get yourself into good growth you should be in surplus so as to reduce the national debt rather than increasing it further. http://www.guardian.co.uk/news/datablog/2010/oct/18/deficit-debt-government-borrowing-data

    Its a sad fact that the current national debt (about £1.2 trillion) is now double the pre-crisis level but that still means that more half the trouble we are in, we would have been even if it hadn’t happened as the situation would still have been unsustainable. Currently it would only be sustainable if the tax take per taxpayer were about £4,200 more per annum and that doesn’t even tackle the debt we have which is costing us about £43bn to service each year.

    Alas ordinary people will always be the ones that suffer as they will either not have the money spent on them or be taxed too heavily in order to receive the spending. Everyone agrees people should pay their fair share but they tend to disagree on what their own and other people’s fair share actually is!

    As for the banks its disgusting that they were allowed to play roulette in the way they did, I am certain that the Government of the day knew what was happening which is why Blair went when he did. Its also well overdue that the systems of aggressive tax avoidance be tackled. Personally I would be in favour of introducing an avoidance levy and charge those that shift their profits to tax havens, kind of like a windfall tax, and if they refuse to pay block their web addresses like China does. Something drastic needs to be done to stop companies drawing monies out of the economies their customers are within.

    As for your example of health tourists, unfortunately under EU freedom of movement regulations other EU citizens are entitled to the health care and benefits which the residents of that country would receive if they become resident here. The problem is that we offer significantly more than most within the EU which makes us an attractive destination. Having recently seen some of the poverty in Romania I can’t see free movement as a good thing for the UK. When their free movement comes in, in 2014, I can’t see reasons why many of the people there would stay and I expect that there will be mass migration across Europe.

    Now I’m generally in favour of immigration as with a birthrate of below 2 per family we would have a declining population, with a rising pension bill, unless we effectively import taxpayers. However many of the poor I saw in Romania are both financially and educationally poor which means that their ability to earn and pay tax is highly restricted. This is being tackled in their own country but its going to take at least one generation to raise the levels of literacy etc. The attitude is quite grasping (if you were that poor then you would be grasping too) so there will be no feeling of guilt for coming here and availing themselves of our benefit system and you could say that its only fair that the load is shared across humanity but again it will be the ordinary people who suffer, both from having to pay more and receive less.

    • Fles says:

      Agreed, to an extent, but the fact remains that services are being cut that will never be restored and the whole austerity exercise might have been largely avoided were it not for a number of tax avoiding companies who are still absolving themselves of any responsibility to contribute. Countries are losing their sovereignty to the IMF while Google, Amazon, Vodaphone and the like make billions in astonishingly tax free profits, but we’re never going to get back the libraries, the orchestras, the individual lives that are being destroyed by these merciless cuts.

  3. Nicholas Firth says:

    What has been agreed with the G8 today is a 1st step and hopefully won’t stop there. The tax take from those companies is needed but won’t make everything better, its a drop in the ocean really!

    One of my points is that we were in receipt of too much in the way of benefits and services and as a nation we couldn’t really afford it, in other words politicians have been bribing us with stuff we can’t afford to pay for! Alas we are now paying for our past sins and although the arts are lovely I think we need to concentrate on health and education which means that I would rather see funding for sports which will aid health than funding for say opera or orchestras. Ironically the rise of Amazon (and Kindle) has probably diminished the need for lending libraries more than anything other single thing.

    Countries only lose their sovereignty to the IMF if they pitch up cap in hand, which means that the governments cocked up and since the governments were elected by the people then they too cocked up. Its an inconvenient truth that the electorate deserve the government they elect!

    My biggest concern is the way the EU has already removed much of the sovereignty of its member nations, just look at how the convention on human rights has required us keep Abu Qatada here. The averaging effect of joining the euro has removed the competitive edge as a cheap tourist destination that Greece, Italy, Spain, Cyprus and Portugal used to have and its membership has also removed economic mechanisms such as QE which effectively enables countries to devalue their currency. In its current form the EU is seriously flawed, personally I think that it should either be a straight trading agreement (which is the only thing that the public have ever voted for) or a fully federal United States of Europe IMO the current half way house is the worst of both worlds.

    • Fles says:

      Of course, benefit spending actually fell during the first eleven years of the last Labour government. It only started to rise after the crash, when people started losing their jobs and pay freezes meant that income support went up drastically. Meanwhile, a large number of corporations are sitting on wads of cash that they ain’t spending.

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