Tony Benn's has called for a "broad movement of active resistance to the Con-Dem government’s budget intentions". But he also needs to set out how to reduce the deficit.
A group of 74 politicians, writers, comedians, and campaigners led by Tony Benn and Green party leader Caroline Lucas MP have published an article in the Guardian calling for a “broad movement of active resistance to the Con-Dem government’s budget intentions”. In order to get one, they should set out more detail on their alternative budget.
The article clearly sets out an acceptance that the deficit has to be reduced and should take place through a combination of tax rises and spending cuts. As Martin Wolf has expertly laid out, go too fast and you risk a double-dip recession but go too slow and Britain loses its credit rating pushing up the cost of interest payments.
One can safely assume that the Benn / Lucas group are opposed to both George Osborne’s attempt to remove the structural deficit over the course of this Parliament and Alistair Darling’s proposal to halve the deficit within four years. But if they are to be taken seriously, they must set out their own timetable. The article states:
“An alternative budget would place the banks under democratic control, and raise revenue by increasing tax for the rich, plugging tax loopholes, withdrawing troops from Afghanistan, abolishing the nuclear “deterrent” by cancelling the Trident replacement.”
Taking each item in turn delivers the following revenue:
• according to Compass’ report ‘In place of cuts’, introducing a 50 per cent Income Tax band at £100,000 would deliver £2.3 billion – or an extra £0.5 billion above and beyond the existing income from taxing revenues above £150,000.
• the same report suggested that £10 billion could be raised by abolishing tax havens and taxing ‘non doms’ (although the Liberal Democrats’ manifesto commitment to raise £4.6 billion from anti-avoidance and anti-evasion was criticised by the Institute for Fiscal Studies as “highly speculative”.
• the annual cost of Afghanistan was £2.5 billion in 2009 according to the Guardian – although this cost would have to be drawn down slowly in order not to put the armed forces at risk.
• Greenpeace’s report ‘In the firing line‘ suggests that although Trident costs £97 billion over its 30-year life, this works out at £3.2 billion per year – that said, decommissioning Trident also comes with significant cuts.
The combined impact on the deficit of these policies, if all were fully delivered, is £16.2 billion. A more realistic figure for the new measures might be £10 billion to account for the costs associated with Afghanistan withdrawal, Trident decommissioning, and anti-avoidance being harder than it looks. Assuming that the Benn group would retain the £19 billion of tax raising measures introduced by Alistair Darling then their overall deficit reduction package would be £29 billion by 2013-14 – equivalent to reducing the deficit by a quarter over four years. This is a decent start and the overall deficit would be further reduced as public spending multipliers helped boost growth, but there would also be a significant risk of higher interest costs to offset any progress.
Campaigners will have to decide whether they think Benn and co have found the right balance before they take to the streets.
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16 Responses to “More detail needed from Tony Benn’s call to arms”
Liberal Conspiracy
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Harry Rama
“Campaigners will have to decide whether they think Benn and co. have found the right balance before they take to the streets.”
No we don’t! We listen to the daily bad news of what Cameron and Co. want to inflict on us*, and we hit the streets to protest! Simple as! Whether Mr. Benn’s proposal is costed or not, I’d vote for him a million times before I ever considered voting for Tory slime like Cameron..
*Privatise the NHS, schools, prisons; scrap every social project in sight, including ones to get people into work; slash benefits, end assured tenancies; 1.3m jobs predicted to be lost, 700,000 people predicted to become homeless – sorry, but a shaven monkey could say “protest” and I’d join him!
Will Straw
Harry – I completely understand the desire to protest against the Coalition cuts. This blog has been doing so since the first announcement was made by Osborne & Laws in May. But, as Sunny Hundal argues on Liberal Conspiracy, we need to be more strategic and that means having a proper intellectual case for our alternative budget (something on which the Benn letter falls short) and we also need to include as broad a group of people as possible.
Chaminda -My sense was that a lot of the items that they called for were already part of the Government spending base which the Coalition are cutting. For example, they would maintain Building Schools for the Future and housing benefit. But if they have that wrong, then I think their alternative budget needs even more scrutiny.
Carl
Of course the Benn letter will fall short of an alternative budget, and I think perhaps Will knows this and is trying to find an exit route from the kind of vigorous opposition which the ‘genuine’ Left is advocating. Obviously Progress etc. will not oppose the cuts as they accept the inevitability of addressing a deficit situation and thereby trying to ‘get back’ to the illusory ‘safety zone’ of the 1990s. In this sense we can expect little from the Right of the Labour Party!
At this stage the resistance do not have to spell out in greater detail what the alternative is. I for one would like to see a Programme eventually emerge from those in the Greens, Labour and wherever, which talks of transformative change – a true break with neoliberalism, and the pursuit of a socialist society based on harnessing modern technology with socialist humanism and individual liberty and creativity. We need to think what a post-consumerist economy could look like in order to fix the economy. It really is that simple. Lots of new thinking will be needed. But it must start from the base of our opposition to the cuts agenda.