Chasing savings from benefit payments

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As of today, none of us know what will be in the UK Budget later this month; it’s doubtful if even the Chancellor knows yet, given that work on the detail is continuing. There have been plenty of hints and rumours, though: enough to fuel endless speculation and debate about whether a particular rumoured change does or does not breach a manifesto commitment. One fairly consistent rumour, backed up in a way by today’s suggestion that weight-loss drugs will be prescribed for overweight people who are economically inactive, is that the benefits budget will be one of the targets. It’s not the most lucrative of possible clampdowns – all the evidence suggests that more government expenditure is lost to tax evasion and fraudulent accounting than on paying benefits to those not entitled to them. Choosing to go after benefits is just following an agenda set by the Tories and their media friends. Having said that, it is true to say that there is a saving to be had if benefits can be restricted to those who meet the criteria; the political question is about whether that’s the most productive target.

It raises a question about chickens and eggs. Is the saving being sought a result of a programme to assist people to find suitable employment, or is it intended to use benefit cuts to force people into work, however suitable that work might be for the circumstances of the individual? It was pretty clear under the Tories that it was the latter of the two: cutting benefits would allegedly create an economic incentive which would effectively starve people into taking low-paid (and sometimes multiple) jobs. In relation to those who see living off benefits as a lifestyle choice, there might even be an argument for such an approach, but that group is much smaller in number than anyone reading the tabloids might think, and one of the problems with it is that it can end up causing a lot of collateral damage, especially to children whose life chances are already poor. Those hit aren’t only the tiny number of workshy. There is a huge difference between that approach and an approach which looks at individual circumstances and provides appropriate help and support.

The provision of drugs to help weight loss is potentially a positive step in general terms, although there are some serious questions about potential side-effects, and whether it is merely treating symptoms rather than causes. But even leaving those reservations to one side, directing support to people who are economically inactive is a major corruption of the ethos of the NHS, which is supposed to be about the provision of health care based on assessed medical need. That’s rather a different proposition. It underlines the way in which what used to be the ‘party of the working classes’ increasingly sees people purely in terms of their economic value. There is a political philosophy based on such a belief, but it isn’t the one Labour traditionally promoted. It’s unclear whether the party intends this medication to be mandatory or voluntary, but even voluntary medication of a specific group of people based on criteria other than health needs would be something that ought to worry us. It also plays to, and reinforces, a stereotype of benefit claimants as fat layabouts, encouraging further stigmatisation of a large group whose needs are complex and varied on the basis of a prejudice about a small subset of that group.

It’s not entirely clear which approach Labour favours on either of these issues, although the signs to date are not good. A party which claims it wants to eliminate child poverty hasn’t hesitated to add to that poverty to date, and has been singularly unapologetic about doing so. There is no reason to assume that they won’t continue in the same vein.

Power still lies where it always did

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The UK Transport Secretary got herself into a little bit of trouble over the weekend. As far as I can see, her sin was to repeat in government what she – to say nothing of her party leader – had been saying whilst in opposition, somehow forgetting that the whole point of being in government is to do the opposite of what they said in opposition. The ultimate owner of P&O threw a brief wobbly, threatening not to invest its £1 billion in the UK unless Starmer did a bit of grovelling, and he duly obliged.

To the enormous surprise of almost nobody, the company then decided that making the substantial profit which they expect to earn on their investment was more important to them than some very slightly hurt feelings and agreed to go ahead with the investment after all. Some important lessons have been learned, though. The first is that politicians may huff and puff when companies treat their staff in an appalling way, but they won’t bite, and there will be no repercussions for such behaviour. Short term huffing and puffing headlines are an end in themselves. The second is that the interests of capital will always prevail over those of labour, even under a self-styled ‘Labour’ government. Humiliating Starmer into buckling down and acknowledging that publicly is just a bonus, to say nothing of a marker for what we should expect over the next five years.

Waiting for the next bus?

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It's tempting to see the result of the latest ballot among Tory MPs to choose a new temporary leader as being just another display of the inherent duplicity of the species. But, whilst there certainly is an element of that involved, it seems that the reality on this occasion is that it’s an even bigger demonstration of their incompetence. Their complete absence of trust in each other has meant that they couldn’t even stich up an election where the electorate is only 120 strong. The ‘explanation’ for the result is apparently that some supporters of James Cleverly – the walking, talking demonstration of the inapplicability of the theory of nominative determinism – were so confident that he was going to be in the last two that, instead of voting for him, they voted for the one that they thought he'd best be able to beat.

They think that they’re such a clever and sophisticated electorate that holding multiple ballots eliminating one candidate each time enables them to use all the low cunning which they possess to game the system so that the final run-off is between the one they want to win and the one that (s)he stands the best chance of beating. But here’s the thing: if we look at the very first round of voting back at the beginning of September, the order in which four were eliminated precisely matches the result achieved just over a month ago. And if they’d used the first-past-the-post system, which they insist is the only democratic way of voting, to select the final two they would have ended up with the same two that they’ve actually got. A month of political manoeuvring, Machiavellianism and dissimulation has got them exactly where they could have been a month ago.

It's hard to say whether the use of STV would have produced a different result. I suspect that having to rank six candidates in order of preference might have been too big an intellectual ask of many of them, but it would certainly have been much harder to game. Maybe the result would have been the same anyway, just achieved a lot more quickly. What is clear is that, whether by accident or design, an overwhelming majority of Tory MPs have opted for a final contest to select the candidate who can do the most to wreck what remains of a once-formidable election-winning organisation. And all the signs are that the aging, white, wealthy, south-east England based membership will enthusiastically assist in that aim. But Tory leadership campaigns are like buses: there’ll be another one along shortly.

Representing who to whom?

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Following her removal from the post of Chief of Staff, Sue Gray has been appointed to a new role as some sort of envoy to the nations and regions of the UK. The precise nature of the job is far from clear. After all, the three devolved nations already have cabinet ministers allegedly responsible for promoting their nations’ interests at UK government level. They’re not very good at it, of course, and it’s obvious that they see their function as being more about telling the devolved administrations what to do than about passing views back to the centre. In theory, an envoy’s role is a two-way process, but the main emphasis has always been on representing the interests of their paymasters. In any event, given some of the reports about Gray suggesting that her expertise lies more in withholding what she considers to be unnecessary detail from the PM, it's unlikely that she is the right person to be feeding back the unfiltered views of the natives. At one point, liaison with devolved bodies was the responsibility of a senior cabinet minister, a certain Michael Gove, so it’s also reasonable to wonder whether appointing a non-politician to the role is a step forward or backwards.

But people are asking the wrong questions. The greater the extent to which a person is appointed to a non-job in the UK structure, the more elaborate the accoutrements that generally go with it. Historically, an envoy is one step down from an ambassador, so here’s the first, and most important, question: does she get a bicorn hat? And if she does, will it have a plume of feathers, or are they reserved for full ambassadors? Will she have an official residence in each of the territories assigned to her care, a place where she can host grand parties to make the great and the good of those territories feel as important as herself? Pyramids of a certain type of chocolate delicacy are optional.

And then there’s what is perhaps the biggest question of all: how long will she stick it out before quietly segueing into becoming Baroness Gray of Greyness, with a seat in the House of Lords?

Creating wealth: who benefits?

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Two of the many points of agreement between Labour and the Tories are that both economic growth and wealth creation are generally good things to encourage. On that, at least, they’re more or less right, although they often seem to miss out the important caveat that both things must happen within such limits of resource usage as are necessary to ensure that resources remain available for future generations, and that the ability of the planet to sustain life is not impaired (and that caveat is more far-reaching than it might appear). They even seem to agree, in general terms, that the route to achieving those things has to do with freeing wealth creators to do their thing by minimizing government intervention or control, and that government spending is some sort of drain on wealth – and on those points, they’re both completely misguided. I wonder if they even understand what ‘national’ wealth, as opposed to private wealth, actually is.

For sure, Starmer knows a wealthy man when he sees one (as did his predecessor but two, on a grand scale). But becoming wealthy isn’t the same as creating wealth, and nor is creating wealth the same thing as becoming wealthy. It’s perfectly possible for someone to redirect wealth in his or her own direction without adding to the total wealth of the country; and equally possible for a wealth creator to add to the sum total of wealth in the UK whilst ending up bankrupt. Becoming wealthy can simply be the result of redistributing existing wealth, something which a ‘trickle-up’ economy like the UK tends to facilitate. Creating wealth isn’t the same thing as making a profit either: it’s perfectly possible to turn a decent profit by simply redistributing existing wealth. There’s another myth as well – that somehow the public sector uses or even destroys wealth rather than creating it. But building a new hospital or school, for instance, adds to the country’s stock of capital, and thus wealth. And not all wealth can be measured in cash terms anyway, even though that’s what politicians seem to want to do. A healthy population also adds to the ‘wealth’ of a country, as well as increasing the potential for future wealth creation.

The real issue is not about the creation of wealth, but its use and distribution. An increase in total wealth which flows into the same few hands might look like a positive result at the macro level, but it won’t feel like one at the level of those struggling to get by. The argument that growing the size of the pie means there’s more for everyone without needing to take any away from the owners of the biggest slices only works if everybody’s slice gets bigger in practice, rather than merely in theory. If all the extra merely makes the biggest slices even bigger, then the ‘growth’ about which the government keeps banging on merely increases inequality.

Confusing total ‘national’ wealth with private wealth looks to be deliberate; and it’s no surprise given that the ‘wealthy’ have a disproportionate influence on government and opposition politicians alike. Even if there’s no direct or obvious quid pro quo, does anyone really believe that the generosity of wealthy donors is completely unrelated to their desire to continue to apply that adjective to themselves? People may not need to create wealth to become wealthy, but neither do they stay wealthy by donating part of their wealth to governments which might want to redistribute part of the remainder. But if increased wealth isn’t put to use for the benefit of the population as a whole, what is the point of it? It’s a question to which the government doesn’t seem to have an answer.

Empire trumps justice for Labour

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In defending the decision to transfer the Chagos Islands to Mauritius against Tory criticism, the PM yesterday declared that “the single most important thing” about the deal is that the US/UK military base on Diego Garcia is effectively exempted from the transfer, and the right of the Chagossians to return to the islands excludes that part of their historic territory. It’s an interesting choice of relative importance.

He could have said that, given the rulings against the UK in international courts, the most important thing was that the UK was going to abide by the rule of law. It would be a reasonably credible approach – he does, after all, claim with some justification to have spent most of his career upholding the law. He could have said that the most important thing was rectifying the injustice done to the Chagossians when the UK forcibly deported them from their own lands and homes. Justice, again, is something which he can legitimately claim to have pursued for much of his life.

But he chose to emphasise neither of those things. The priority, for him, was maintaining a military base, the precise nature and purpose of which has long been unclear, and to deny the right of the islanders to return to that part of their land in order to do that. It turns out that, when push comes to shove, maintaining the scattered remnants of the British Empire and the UK’s military reach are more important to him than either the rule of law or justice for those who were unlawfully expelled. Who needs Tory imperialists when we have Labour ones?

The imperial mindset lives on

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No empire was ever created with the active and enthusiastic participation of the populations incorporated into that empire. Empires are, and always have been, based on conquest and war, often savage and brutal. The passage of time and a combination of an influx of people from the conquering power coupled with relentless propaganda about how much worse off people would be if they actually decided to run their own affairs sometimes convinces the conquered to accept their status but, more often than not, disputes about ownership and sovereignty rumble on, sometimes for centuries. Even though they know that the territories were seized by force in the first place, imperial powers somehow end up believing that they have some sort of natural right to the possessions thus gained.

Those in the Tory Party who still have that imperial mindset (i.e. almost all of them) have been outraged by the agreement of the Labour government to transfer what seems to be partial sovereignty over the Chagos Islands to Mauritius. Handing over a few remote islands in the Indian Ocean is, apparently, an unparalleled act of treason (somewhat ignoring the fact that it was the previous Tory Government which opened the negotiations). But in truth, Labour aren’t much better. They have negotiated over the heads of the Chagossians themselves who have had no input into the process, and whose ancestral homelands have been treated as something to be traded and transferred. And, in some form or another, the transfer has been made conditional on retaining some sort of control over Diego Garcia, the large US/UK military base, from which Chagossians will continue to be excluded.

It's presented as some sort of final resolution of a long-outstanding post-colonial problem, but the reality will almost certainly turn out to be different. There is a question as to whether the negotiations have truly been conducted between equals, or whether there isn’t an element of power differential at play. And no ‘agreement’ which has been reached, no matter how well negotiated, where one of the negotiators holds most of the cards is ever likely to stick in the long term. The UK should have learned that from the case of Gibraltar, for instance. In theory, it was ceded to the UK ‘in perpetuity’ under the Treaty of Utrecht in 1713, but that treaty was effectively simply recognising that the peninsular had already been seized by force. The territory was ceded under pressure as part of the settlement of a war, but it was hardly a negotiation between equals, and Spain's claim to the territory is still live.

‘Perpetuity’ might appear to be a word with a clear meaning, but in terms of territorial disputes, it simply means ‘until the balance of power changes’. It may be a decade or two away, but the question of sovereignty over Diego Garcia hasn’t really been ‘resolved’ at all, merely postponed. And the wishes of the Chagossians will make themselves known in due course, not necessarily in the form of acceptance of the deal done between two far away governments. The British, or perhaps I should say English, Empire won’t ever be truly over until the last remnants have been disposed of, and there’s a lot more outrage still to come from those who retain the imperial mindset.

Strong opposition is not an end in itself

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Some analysis of the so-called beauty parade at the Tory Conference this week has been based on the assumption that democracy requires that any government needs a strong opposition to perform this magic function called ‘holding to account’ and that, in current circumstances, that requires a functioning Tory Party. What anything in that last sentence actually means is generally left unexplained on the basis of another assumption: that we all know what it means. But do we really?

If ‘holding to account’ simply means automatic gainsaying of anything the government says, regardless of any evidence, is it actually performing any useful function? In the Senedd, we have a whole opposition party utterly dedicated to simply disagreeing with everything the administration says – even if, in the process, they find themselves obliged to contradict either what they themselves have said in the past or else what their masters in London are saying – in pursuit of a headline or two, the more lurid the better. But the degree of luridity and the number of column inches thus gained is no measure of the usefulness of the process. Some might argue that it’s useful in keeping lazy journalists employed, although many of us might just doubt the value of that as well.

It might be argued that democracy is best served by presenting voters with alternative views of the world and allowing voters to choose between them, but that isn’t the same thing as presenting the same view of the world and merely offering a choice of implementation teams, which is where UK politics currently operates. That’s not to underestimate the value of replacing an incompetent team with a competent one, although recent events suggest that the last election didn’t even achieve that, however much it might have appeared in advance that almost anyone would be able to do a better job. Turns out that ‘almost anyone’ didn’t encompass the main opposition party.

Even if it were true that the UK’s semi-democracy is stronger where there is a strong and clear opposition party, it doesn’t follow – as much of the speculation around the next leader of the English Conservative Party seems to assume – that that opposition must be composed of the party that was last in government. Maybe, even in the case that having a strong opposition is always and necessarily a good thing, it would actually be better to sweep the last lot aside and build anew around another option which actually offers something different. Choosing the least worst new leader in the expectation that (s)he would be capable of replacing the current government with a revamped version of its predecessor and that we would be better off as a result would be another triumph of hope over experience.

There’s more to strengthening democracy than simply preparing the Conservative Party to return to power the next time the pendulum swings. Abolishing the House of Lords, implementing an electoral system which doesn’t give absolute power to one party on the basis of one third of the votes, and further devolution of power would all be better first steps. Ensuring that a party committed to none of those things can only ever be replaced by another party committed to none of those things is a recipe for continuation politics and economics. Rather than being what we need most – which is what the talk of a strong opposition seems to assume – it’s really what we need least. We should be asking ourselves whose interests are being served by restricting the choice.

When does a gift become a tip, and therefore taxable?

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A new law comes into force today regarding the distribution of tips in service industries. Some less than entirely scrupulous employers have been keeping all or part of the tips themselves rather than passing them on to employees. Whether tipping is a good thing or not is a matter of opinion; some of us would certainly prefer that the staff are paid a proper wage in the first place, even if that means prices go up a bit, rather than the staff being dependent on the arbitrary generosity of customers. Leaving that aside, tipping is currently a fact of life, but happens in two ways. Sometimes, cash goes directly into the hands of individual employees, but increasingly customers can choose to add an amount to the bill, and the total gets shared out and processed by the employer.

Tips have long been taxable (as the name suggests, income tax is a tax on income, not just on earnings), and one advantage of employers doing the collection and paying is that the tax can be, and generally is, processed through the employers’ PAYE systems. Cash put directly in the hands of individual staff members, however, is only taxed if it is properly declared to HMRC, and there must be at least some doubt as to how much gets declared in practice. As a general rule, ‘gifts’ are not taxable (although there are exceptions, especially when gifting is used as a means of attempting to avoid paying tax), but ‘gifts’ received by an employee as a result of his or her employment – which is what tips effectively are – are unquestionably taxable, although it does open up something of a grey area.

It made me wonder, though: if gifts received as a result of the job a person does (i.e. they would not be received by the same person if he or she were doing a different job) are taxable, why are gifts received by MPs not subject to income tax? It is clear that they effectively boost the spending power (and thus the ‘real’ income) of the recipients and that they are only given because of the job the individuals are doing, so why are they not treated as income? Why should a waiter earning at or around the minimum wage, say, who receives a tenner at the end of a meal, have to pay 20% tax on it, whilst a person on a substantial salary who receives clothing worth £30,000, to pick a recent example at random, pays nothing? It wouldn’t be a huge money-spinner in the scale of things, but if the Chancellor is serious about closing loopholes on tax avoidance and clamping down on benefit fraud, perhaps she should also look a little closer to home at the people around her.

Not outrageous enough?

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It takes a very special kind of delusion to look at an electoral defeat and claim that what it actually shows is overwhelming support for the losing party. Donald Trump has it in spades, of course, and is clearly keen to apply it to the results of elections in countries other than his own. Last week, as part of his ‘welcome’ for Keir Starmer, he praised the ‘real winner’ of the election, one Nigel Farage, bizarrely claiming that Reform had won more seats than they were allowed to have. From a man whose one and only election victory (to date) was achieved under an electoral system in which he won fewer votes than his opponent, a degree of confusion is perhaps to be expected.

But we have our own adherents of the idea that a defeat is really a victory much closer to home. Wales’ very own RT Davies, for example, declared this week that Wales is ‘inherently Conservative’, the evidence for which is presumably to be found in the number of seats won by Conservatives in the General Election in July. Zero is, I suppose, a nice round number, and the beautiful roundness of it can easily distract attention from its mathematical significance. He also said that, “The Welsh people reject the extreme liberal ideology of Labour, Plaid Cymru nationalists and the Lib Dems”. I’m struggling to identify which part of the mainstream Tory ideology so enthusiastically swallowed by at least two of the named parties is ‘extreme’, but that’s an aside. The evidence for this rejection is clearly to be found in the fact that the remainder of Welsh constituencies, after deducting those taken by the Tories, were won by the three parties he named. Zero for the Tories and a total of 32 for everyone else is the clearest rejection of everyone but the Tories that a Tory leader could wish for.

Perhaps he’s not mathematically-challenged at all, he just believes that election results are like some strange form of double-entry book-keeping, where every debit has to be balanced by a credit somewhere else, and the rest of us are simply looking at the ‘wrong’ side of the balance sheet. After all, a number which looks like a debt to a customer always looks like an asset to the bank. I’m not sure that I’d want him as a banker, though. Even when it isn’t rhyming slang. It’s more likely that he comes from that school of thought which believes that if you repeat an untruth often enough it ends up being believed. It’s an approach which has a long and disreputable history, but as Trump demonstrates, daily, the more outrageous the statement, the more effective it can be. Maybe RT’s problem is that he simply doesn’t have it in him to be outrageous enough. Everyone, or so they say, has at least one redeeming feature – being insufficiently outrageous could be his.