“I’m sick and tired of drip economics. It never worked.
Not my words, or even the words of a Labor politician, but the words of US President Joe Biden this week, the leader of the world’s largest economy. And he couldn’t be more correct.
The trickle economy, I assumed, was a thing of the past.
However, a few weeks after being named prime minister, Liz Truss appears to be embracing this flawed ideology with plans that include lifting the cap on bankers’ bonuses.
It is based on the theory that you must disproportionately favor wealthy people and companies in the short term in order to improve everyone’s living standards in the long term.
This is a disproved hypothesis, which has failed time and time again. The top 1% will do anything in their power to accumulate wealth and profits – we simply cannot improve the lives of people across the country by giving more money to the richest in society.
At a time when people are experiencing a cost-of-living crisis, while big companies reap excessive profits, she has misinterpreted the country’s mood.
The prime minister called the move to lift the cap on bankers’ bonuses a ‘tough decision’ – so difficult, it seems, that she made it just weeks after taking office.
In addition to the moral argument, we must also make it clear that there is no link between high bonuses and increased performance. In 2014, the rescued Royal Bank of Scotland distributed £421m in bonuses despite seven straight years of losses.
This decision exposes the Conservatives’ priorities. Truss said that “stimulating economic growth can mean doing unpopular things,” which seems like an admission that she just doesn’t care what people think.
Before the notorious crash of the early 2000s, bankers’ bonuses were spiraling, reaching £16 billion in 2007.
The current cap, introduced in 2014 after the crash, limits annual payments to twice a banker’s salary because everyone could see that this pernicious culture was out of control.
Last year, British banks made £45.6bn in profits – they are clearly not being held back.
Labor must be stronger in opposing this change, because it is not anti-business to be against excessive corporate greed. The party must always be on the side of justice for all.
After all, it seems that the wage constraint is only for low-income people, not bankers. The Governor of the Bank of England said workers should not ask for big pay raises, while the government refuses to give workers pay increases corresponding to inflation.
The truth is that the Conservative government will continue to help its wealthy comrades, leaving workers without support in desperate times.
Boris Johnson, the chief liar, was perhaps more adept at hiding the conservatives’ true intentions.
Liz Truss admitted that her tax cuts will disproportionately benefit the wealthy. She’s not even trying to hide it!
And how could she? The Resolution Foundation says that, on average, the richest 10th percent of households will benefit from government cost-of-living measures at around £4,700 a year, while the poorest 10th will receive just £2,200.
Let’s not forget that Truss was forced into a humiliating turnaround before she even took office, because of her plans to cut public service pay outside of London. As Maya Angelou once said: ‘When people show you who they are, believe them the first time’.
The real dividing lines are already clear. To address the energy crisis, Labor has consistently called for a windfall tax to combat excessive profits – but Truss prefers to borrow more money off the backs of taxpayers.
Your stamp duty cut changes will only help people who can afford a home – not put more people on the ladder.
The facts show that we have high levels of wealth inequality. The gap between the wealthiest in society and the rest of the population widened over a 10-year period under successive Conservative governments.
That may be why the Treasury is refusing to publish the UK economic forecast alongside Friday’s mini-budget.
Conservative governments have a history of avoiding scrutiny, particularly during the pandemic, when they refused to publish full details of procurement contracts for companies linked to the Conservatives.
These “growth booster” measures may result in a temporary boost on paper, but if wealth is accumulated by the richest in society, it will be empty.
Under the Conservatives, it is the workers who are creating the wealth in this country, but only those at the top benefit from it.
Much like the government’s energy price cap policy, which just kicks the can in the way and doesn’t address the core issue, I’m afraid these measures are designed to distract people ahead of the next general election.
It’s time to do things differently, focusing on people before profit.
This should start with an extended tax on the excess profits of energy companies so that we can support the most vulnerable with their crippling bills.
It must mean giving workers a real pay rise, because if we value people’s hard work properly, society will flourish, living standards will improve and crime rates will fall, as the most vulnerable people in society will receive the support that need.
And it must mean protecting fighters for the right to strike.
I wrote in my previous column that the Conservatives are not on the side of the workers, that we would see more of the same failures under Liz Truss, and that she had the opportunity to prove me wrong.
Well, with only a few weeks into your premiership, I’m afraid I’m already proving myself right.
This government, like the ones before it, is unreliable – it’s time for real change with Labour.
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Source : metro.co.uk