An Economy to Serve the People

It is ironic that in the fight to be leader of the Tories the candidates sell themselves with the ideology of austerity, private capital, reduced public services and low taxes while Labour reject ideology, preferring the pragmatism of austerity, private capital, reduced public services and low taxes.

Both main parties offer the forlorn hope of an end to austerity. We just need to wait until private businesses are suitably successful, leading to more tax returns goes the mantra.

The constantly repeated message that revitalising the economy pays for public services is promoted through what can only be ignorance, laziness, or deceit. The idea that we need to first sort the economy to pay for public services is fundamentally wrong headed.

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If the UK is to avoid becoming a third world country, governments and politicians need to wake up to some very important facts.

Firstly the public sector is just as much a part of the economy as the private sector. Shrinking it or starving it will hit the private sector too. The two are inseparable and as we haven’t had a government for at least 45 years that understands this very simple fact, including those presently in parliament, then we can conclude that our present politicians lack the capability to govern.

Secondly, we spend and tax, not tax to spend. Fiscal deficits are of little or no consequence. Running a balanced economy is complex so it is important that governments at least understand the basics. If they can grasp the fundamentals, they are presented with the wonderful opportunity of planning the economy. There is nothing wrong with a hands-on approach to a planned economy. That’s why we have multi-national corporations, bigger than whole countries, because they can plan their business like an economy due to modern technology. Government must stop with this laissez faire approach and grasp the detail and effort needed in economic planning to ensure the welfare of the people.  

The third area, which applies only to Labour policy, is the clear misunderstanding that government needs to have a growing and successful economy to afford to bring utilities into public ownership. I’m giving them the benefit of the doubt when I use the term misunderstanding. In reality it reflects the true ideology of modern Labour and has nothing to do with pragmatism. What Labour have said is “sorry guv – these are the rules” and that they’ll never bring utilities into public ownership regardless of the circumstances. It will never be a priority to them. They’d rather attempt legislation to control these global behemoths. It tells us that Labour regard corporations as goodwill players and additionally will allow the continued privatisation of our NHS. These things are not speculation on my part, but rather views that have been clearly expressed by the leader and members of the shadow cabinet, in line with their collective responsibility.

But the fact is, bringing utilities into public ownership is not difficult. As long as government is not creating foreign debt it can purchase them at no risk. In fact it would be ridiculous not to do so. The utility owning corporations have shown us again and again how they operate. We should believe them and see it as one of the highest priorities of any government. Governments can create money for this very purpose and in reality not create a debt. Even if it is treated as debt there is an asset to offset the debt, just like any organisation investing in growth. 

In the case of many of the utilities it would simply be a case of changing government policy. So for example when the government wants additional renewable energy infrastructure it can contract a company to build it while keeping ownership. Presently, government allows companies to build and own our infrastructure. Companies that bill us for energy (the retail arm) are fundamentally worth nothing as they are factoring companies and can be replaced by a government retail company without needing to purchase an energy giant’s retail arm.

Finally, on the third point, how is any government going to invest in its Green Revolution (GR) if it is fearful of dipping into the public purse. Yes, the GR will create a vast number of jobs in the private sector, but it will need massive investment by government to drive the change. Whether it be Tory ideology or Labour pragmatism that says no to investment, the outcome is the same.

Which leads us to the question, what will Rise do?

Rise has hundreds of policies that outline our plan for the future. Not soundbites lacking in detail, but serious plans which we constantly build on.

We would nationalise all the utilities and transport. This allows us to manage the necessary change to both improve the welfare of people as well as take the necessary environmental steps. For some insight to our policies you can see our article on transport here and on energy here.

Rise understands that starving an economy of public money also destroys local economies. Presently much of our country’s public money is handed over to large corporations and never makes it into the hands of communities. Rise’s policy of fully funding councils will allow them the freedom to improve their communities. With our plans council tax would only be used by councils to improve their community, not for covering essential services. This empowers communities and connects them to the activities of their elected councils.

Rise will invest in the economy with thorough planning rather than this laissez faire approach we are presently victims of. We elect governments to work for us. They have a role. Their role is not to step back from responsibility and promote smaller government. Every decision government makes should be weighed up against what benefits it brings. What could be more depressing than listening to Labour talk about the British way of doing economics when it is obvious to anybody with a modicum of awareness that the British way is laissez faire leading to decline and growing poverty.

In terms of manufacturing growth, through our investment bank, we will encourage growth in green industries or industries that serve society. Where commodity goods are concerned we would look to new businesses to create high quality products that can be repaired rather than ending up in landfill. This would require a planned approach to our economy rather than the mantra of “growth, growth, growth” we’ve been hearing recently.

We will introduce an automatic tax credit to strengthen people and communities.

Does introducing money into the economy risk inflation? Yes of course it does. But this can be managed if government treats the economy like a machine that has measured inputs and outputs. In reality, in a global economy, inflation is more likely to be created from external factors such as supply-side shortages or profiteering than some of the traditional reasons identified by the BoE when raising interest rates. Our model of balancing the economy would do more to remove the risk than all the years of cruel and wasteful austerity. The important thing for Rise is while tax can be used to help balance an economy, there is no place for regressive taxes such as VAT and National Insurance. See our policy paper on how we’ll scrap VAT here. We will change the tax system to ensure it is fair and doesn’t impact the poor the hardest as our present system does.

Why don’t you Join Us and help build our policies and community projects.

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