Boris Johnson, Mayor of London, today used his platform of a column in the Daily Telegraph newspaper to argue that the super-rich are a ‘put upon minority’ like homeless people or the travelling community. He argues that they should be protected from ‘bullying’ by the public, who should instead be offering their ‘humble and hearty thanks’ for their ‘prodigious’ contributions to our public finances.
The reality is, these super rich individuals are paying an ever smaller share, while receiving substantial tax payer funded subsidies, and the protection of the publicly funded police from an increasingly outraged public.
The Cost of the Human Welfare State
The UK Government spend a total of £694.89bn a year, to do everything. The amount the government spend on benefits is £159bn, with £72bn (45%) of that going on pensions. So, we have £85bn (12% of spending) a year actually going on working age benefits. The UK’s current unemployment rate stands at 7.8%. It makes sense that we spend this proportionate amount of shielding citizens from poverty induced by involuntary unemployment, and support sick and disabled people who cannot work or who bear additional financial costs to work.
Who is Picking up the Bill?
Boros Johnson argues today, that “We should stop any bashing or moaning or preaching or bitching and simply give thanks for the prodigious sums of money that they are contributing to the tax revenues of this country, and that enable us to look after our sick and our elderly and to build roads, railways and schools.” Clearly, the Mayor would have us believe that the rich are subsidising the poor. In fact, the reverse is true.
Only one in four of the UK’s top companies pay their taxes, meanwhile they were receiving tax credits to the tune of hundreds of millions of pounds by people who did pay their taxes.
Corporation Tax is lower today than at any time in its history. UK Corporation Tax in 1984 was 52%. By 1986 it was 36%. In 1999 it dropped to 30% and in the most recent budget it was cut to 20%.
Meanwhile, tax avoidance is costing us almost £70bn each year.
Not only are the super rich individuals not paying their fair share, but they are coming cup on hand to the tax paying majority.
The Cost of the Corporate Welfare State
The Bank Bailout
According to the National Audit Office, The UK taxpayer spent £850bn bailing out the Banks in 2008. This is almost twice the nation’s total annual budget. For this amount, the UK could have funded the entire NHS (£106.7bn a year) for eight years , our whole education system for twenty years (£42bn a year) or provided two hundred years of Job Seekers Allowance (£4.9bn a year).
The private sector is increasingly invited to deliver crucial services; the companies keep the profits of success, while the taxpayer is left to pick up the tab when they fail.
In the most recent budget, George Osborne offered another £130bn to banks in the form of mortgage guarantees, effectively making it so banks can grant mortgages to people, reap the profits, but never fear a default as the government (you and me) will pick up the tab.
When Rail Track, the company running the privatised rail network failed in 2001 it was allowed to hand its £3.3bn of debt to the tax payer.
The state had to step in and restore communications when private court translators failed to show up en masse.
The taxpayer funded the deep cleaning of hospital wards when outsourced cleaning firms delivered us a superbug epidemic.
The taxpayer stepped in once again when the privatised forensic service’s manifest cock ups failed to deliver justice.
The nation’s armed forces had to step in during the London 2012 games when private security firm G4S failed to provide a sufficient number of staff to fulfil its duties.
The taxpayer bought failed bank Northern Rock for £1.4bn to avoid a run on the banks. The bank was split into a ‘good bank’ likely to generate profits in future, and a ‘bad bank’ containing almost £50m of bad debts. Osborne then sold the good bank to Richard Branson for a measly £747m, while the taxpayer kept the bad bank and the associated debt.
Despite all these failures the same companies are invited to make profits and mistakes on further government contracts while the taxpayer is effectively frozen out of the decision making process.
Private Finance Initiatives
Our hospitals and schools have been built under private loans called Private Finance Initiatives, rather than government borrowing. These loans are at least twice the rate of interest that government loans would have been. These loans are then repaid over 25-30 years.
Today, 22 of the 103 NHS trusts to enter PFI are facing difficulty due to the exorbitant repayments required to pay back the so-called NHS Mortgage (paying back the company for building the hospital). Some hospitals are having to handover a fifth of their annual budget on paying for the PFI deal.
Overall, for a capital investment of £54.7bn (that’s how much money we actually borrowed to build stuff), the tax payer will pay back an astounding £301bn in just twenty five years. Given the disasters of debt witnessed so far, many of the 771 PFI projects currently running will bust the budget of these schools and hospitals long before then, leaving us with the debt but not the service.
While we have privatised rail, energy, utilities and energy – we continue to pay massive subsidies to the private companies running them now. When we aren’t handing money over directly, the government is letting them off paying their dues.
The Rail Service was radically downsized in 1963 as it was said it was losing £140m a year, which was the gap between ticket revenues and running costs. It was finally privatised in 1993. Since then, ticket prices are rising above the rate of inflation. Train firms pay the government £1.17bn in premiums to run their franchises, only for the taxpayer to hand them back £4bn in subsidies.
So we are now spending almost £3bn a year (£500m more in real terms) today to fund the profits of private companies, while paying 66% more in real terms for our train tickets, with no representative to hold to account for the failure.
Network Rail profits doubled in 2012, and all rail franchises are running at a profit as the companies prioritise (as they have to, as businesses) making a profit rather than lowering ticket prices or investing in the network. Despite all this, the government are not complaining as they were when the service was nationalised, of a loss making service.
Gas and Oil prices were subsidised to the tune of £3.6bn in 2010, whilst renewable energy projects received just a third of that. And with the exception of the first two years of the financial crisis, this figure has risen consistently over time. Yesterday’s budget announced more of the same, with shale gas exploration receiving massive tax breaks.
Subsidising Low Wages
The three most expensive benefit payments in the UK are Tax Credits, Housing Benefit and Child Benefit, totalling £56.4bn a year. These are not ‘out of work’ benefits. Therefore 65% of the total spent on working age benefits, is going to people in work.
These payments have been set up and used mostly by people in work, but whose wages are below subsistence levels. In the last five years, wages have increased by just 10%. Inflation according to the Consumer Price Index (CPI) was 17% during the same period. This means a real terms wage cut.
However, CPI figures represent a wide range of purchases which many average or below average earners do not buy. The UK Essentials Index which focuses on the kinds of everyday items which the UK’s working and non working poor buy showed an inflation rate of 33%.
I have written several pieces of late on recent and forthcoming legislative changes which are built to protect the political and economic elite from the wrath of the majority from whom they extort their riches. The police force is becoming more militarised as time rolls on; rather than facilitating the protests of the taxpayers at this blatantly unjust system, they are acting as corporate security for super-rich corporations and individuals. The police are protecting the private sector parasites, from the public’s attempt to shake them off. As the system becomes ever more unjust, and the public response ever more threatening to the status quo – so the corporate state has ramped up security for the private sector.
In short, the legal and physical apparatus of a police state is being built around us – and we are picking up the bill.
To Those who Know Oppression – This is No Joke
Those people across the capital and the country who know the pain of real oppression, will not be laughing at Johnson’s comments.
- Hate crime against disabled people rose 25% last year, thanks in large part to the demonization of disabled benefit claimants as faking scroungers by Johnson and his party.
- Members of ethnic minorities are still finding themselves unlawfully imprisoned and killed by police officers
- The government’s own statistics show that between 2010 and 2011 10,600 sick and disabled people died within six weeks of their Atos assessment. This is 204 people a week, or 29 people a day. 2,200 of these people died before finding out if they were still entitled to their social security, and an astonishing 1,300 had been declared ‘Fit to Work’ by being placed in the Work Related Activity Group. These people spent their final weeks alive being harassed by the Job Centre, answering pointless questions, and fretting over late payment notices and threats of eviction as their social safety net was ripped away.
- After the privatisation of energy, the UK now suffers the worst fuel poverty in Western Europe, with over 7,000 deaths from cold homes each year.
- Rough sleeping in London has risen by 62% in just the last two years, as the Bedroom Tax, Benefits Cap and other welfare cuts have pushed the poor into destitution.
At the same time, the combined wealth of the richest 1,000 UK residents has reached £450bn, a total increase of £35bn on the previous year. The wealth of the top 200 richest residents in Britain and Ireland amounts to an incredible £320bn. The super-rich are not the oppressed, they are the oppressors.
Boris Johnson has styled himself, with the aid of a complicit mainstream media of which he remains a paid part, as the loveable buffoon. He is the X-Factor generation Mayor. He garners votes on the basis of celebrity, not policy. When challenged, those who support him despite professing to be generally left leaning have no idea of his political platform whatsoever. Boris has some voter pleasing socially liberal views on equal marriage, and has voiced up for the Living Wage. But Boris is not a man of the people. He is not a court jester. He is an intelligent, astute man with a toxic set of political and economic beliefs that are causing real harm in London and across the country. A vote for Boris Johnson and the Tory party, is a vote for the boot at your own throat.
(If only Boris was tackled with the seriousness Eddie Mair did in the above interview. He is not a joke)
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