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| The late Charles Kennedy, whose practical policies have returned to the table for consideration in Scotland. Photograph: Charles Kennedy speaking at the Friday Rally at the Scottish Liberal Democrats Spring Conference, 2015 from James Gourley/Liberal Democrats (License) (Cropped) |
One of the more worrying statistics of the moment is that generational inequality is rising, as the doors that allow social mobility are closing (Inman, 2016). One particularly telling factor is that home ownership has become a distant and fading dream for young people, as modest incomes are no longer enough to get started (Elliott & Osborne, 2016).
So far, George Osborne's efforts have been aimed at finding ways around tackling the key problems: making larger and cheaper loans available, turning rents into deposits and selling off social housing cheaply to tenants. All of these moves are attempts to stimulate the private sector and take care of the middle class - largely at the expense of those worse off. What they don't do is fix the core problems, like a lack of supply that drives rents and prices through the roof.
But Osborne's austere laissez faire isn't going to close the inequality gap. For schools, for example, the place where inequalities first begin to take their substantial toll - whose teachers and administrators are buried under mounting stress that is driving employees away (Harris, 2016) - a place to start would seem to be a simple, practical acceptance: more money is needed. Yet with austerity ascendant, that will be a difficult thing for this government to accept.
Under the present conditions, its really no surprise that the late Charles Kennedy's penny on tax policy has seen a resurgence. Kennedy proposed, as Ashdown did before him, to add one penny in the pound to income tax - an increase of 1% in search of £3bn in additional funds - to support extra spending on education (BBC, 2001; Marr, 2001; Taylor, 2016).
The same policy has now turned up in Scotland. Will Rennie, leader of the Scottish Liberal Democrats, announced the return of this policy to the Lib Dem's platform at the end of January (Carrell, 2016) - only to be upstaged a week later by the Scottish Labour leader Kezia Dugdale's adoption of the same policy (ITV, 2016).
Under Kennedy, this was seen as a bold, but practical measure at a time when the economy was improving dramatically. Under Kennedy's successor Nick Clegg, the emerging financial crisis led to these ideas being translated into 'fairness'. Clegg's, now much missed, red lines in government involved sharing the burden (Parkinson, 2012) - refusing to have cuts impact on the poorest without the equivalent be expected of the richest.
Amongst the things Clegg fought for was increased spending for the early years at school (Ahmed, 2015), hoping to close gaps so that children might grow up with the skills necessary to seize opportunities on their own merits. During that time, Conservative supremacy and lust for cuts was barely restrained by the Coalition. Now it doesn't seem to be restrained at all.
All in it together, to protect the next generation from crippling public debt, seems to have become the means to disenfranchise the next generation - denying young people public services and affordable housing. Meanwhile, the wealthy are doing just fine (Inman, 2016).
And yet, austerity has laid bare and made finally visible in the UK the true extent of the financial crisis - from which the UK was largely sheltered by the government funded public sector. From homelessness at the extreme, to the now common shortages of affordable homes, the public may now finally - thanks to austerity - be realising the full weight of the burden falling on them.
In those conditions, the re-emergence of policy's like Kennedy's penny on tax is not surprising. A general outcry for more the government to do more cannot be far away. While that, of course, doesn't necessarily always have to mean constant high levels of public spending on fully nationalised services. But more has to be done.
Mariana Mazzucato, economist and one Labour Shadow Chancellor John McDonnell's anti-austerity economic advisors, has argued that the private sector is a weak innovator that is loathe to take risks. Quoting Keynes, she argues that most innovation - the opening of new economic spaces - is done best by government (Mazzucato, 2013) - in the form of a smarter state.
Inequality has many facets that need to be tackled. Education needs more support. Housing needs to be more widely available and cheaper. Young people need to see more opportunities in more fields. None of these things can be achieved without some additional government funding at some stage. Public bodies have the ability, and the right, to act: to open up new economies, to create new opportunities where there are now none, and to invest in new futures.
All in it together, to protect the next generation from crippling public debt, seems to have become the means to disenfranchise the next generation - denying young people public services and affordable housing. Meanwhile, the wealthy are doing just fine (Inman, 2016).
And yet, austerity has laid bare and made finally visible in the UK the true extent of the financial crisis - from which the UK was largely sheltered by the government funded public sector. From homelessness at the extreme, to the now common shortages of affordable homes, the public may now finally - thanks to austerity - be realising the full weight of the burden falling on them.
In those conditions, the re-emergence of policy's like Kennedy's penny on tax is not surprising. A general outcry for more the government to do more cannot be far away. While that, of course, doesn't necessarily always have to mean constant high levels of public spending on fully nationalised services. But more has to be done.
Mariana Mazzucato, economist and one Labour Shadow Chancellor John McDonnell's anti-austerity economic advisors, has argued that the private sector is a weak innovator that is loathe to take risks. Quoting Keynes, she argues that most innovation - the opening of new economic spaces - is done best by government (Mazzucato, 2013) - in the form of a smarter state.
Inequality has many facets that need to be tackled. Education needs more support. Housing needs to be more widely available and cheaper. Young people need to see more opportunities in more fields. None of these things can be achieved without some additional government funding at some stage. Public bodies have the ability, and the right, to act: to open up new economies, to create new opportunities where there are now none, and to invest in new futures.
Breakthroughs in all of these areas would lead to new economic growth and wider spread shares of the spoils. A penny on tax for education is a modest, practical start. A small, subtle, rejection of the austerity doctrine. But it is one small solution, for just one part of a huge and interlinked problem of inequality that the government cannot for much longer simply trim around the edges.
References
Philip Inman's 'It’s not enough that homeowners prosper. Everyone should: Osborne claims inequality is declining but the economy – and society – will suffer if he fails to invest in the younger generation'; in The Guardian; 14 February 2016.
Larry Elliott & Hilary Osborne's 'Under-35s in the UK face becoming permanent renters, warns thinktank: Resolution Foundation says within a decade nine out of 10 Britons on modest incomes under the age of 35 will not afford home ownership'; in The Guardian; 13 February 2016.
John Harris' 'Long hours, endless admin and angry parents – why schools just can’t get the teachers: British schools are reporting a classroom crisis, with thousands of disaffected teachers leaving the profession, and new graduates discouraged from training because of the daily stress and grind. And with the number of state school pupils set to rise by a million by 2022, the problem is only getting worse'; in The Guardian; 1 February 2016.
'Education - worth a penny more?'; on the BBC; 15 May 2001.
Andrew Marr's 'Charles Kennedy quizzed'; on the BBC; 29 May 2001.
Brian Taylor's 'Penny for Willie Rennie's tax raising thoughts'; on the BBC; 27 January 2016.
Severin Carrell's 'Scottish Lib Dems call for 1p tax rise to raise £475m for education: Party leader Willie Rennie says measure would put Scotland’s schools ‘right back up there’ with the best in the world'; in The Guardian; 27 January 2016.
'Scottish Labour leader plans income tax hike for middle class'; on ITV News; 2 February 2016.
Justin Parkinson's 'Lib Dem conference: Clegg promises to push for wealth tax'; on the BBC; 23 September 2012.
Kamal Ahmed's 'Nick Clegg: Education is 'red line' in coalition deal'; on the BBC; 27 April 2015.
Mariana Mazzucato's 'Let's rethink the idea of the state: it must be a catalyst for big, bold ideas - As George Osborne envisages a smaller state, economist Mariana Mazzucato argues instead that a programme of forward-thinking public spending is crucial for a creative, prosperous society. We must stop seeing the state as a malign influence or a waste of taxpayers' money'; in The Guardian; 15 December 2013.
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