[Marxism] U.K. Economy Needs Stronger Unions and Higher Taxes on Rich, Report Says
lnp3 at panix.com
Wed Sep 5 08:23:36 MDT 2018
NY Times, Sept. 5, 2018
U.K. Economy Needs Stronger Unions and Higher Taxes on Rich, Report Says
By Stephen Castle
Britain needs sweeping changes to redress its economic failings, rising
inequality and the corrosive legacy of the financial crisis, according
to a report from a committee that included the Most Rev. Archbishop of
Canterbury, Justin Welby.
The group outlined a 10-year plan for the sort of transformation
experienced twice in Britain in the last century: once after the Second
World War, when the state expanded its influence, and then in the 1980s,
when Margaret Thatcher unleashed the free market to jolt the economy.
Commissioned by the Institute for Public Policy Research, a British
public policy institute, the report, “Prosperity & Justice: A Plan for
the New Economy,” landed just as Britain is grappling with its looming
exit from the European Union, or Brexit, a move that has already slowed
investment and dampened economic growth.
Instead of focusing on Brexit itself, the document tried to tackle some
of the factors that prompted the 2016 referendum and the resulting
decision to quit the European Union. That vote, the report said, “was a
stark repudiation of the status quo and crystallized profound feelings
of economic injustice.”
Several of the report’s conclusions are eye-catching, including calls
for stronger trade unions and worker representation on company boards,
for higher taxes on the wealthy and on large inheritances, and for
greater regulation of giant social media companies.
“For decades the U.K. economy has not worked as it should, with millions
of people and many parts of the country receiving less than their fair
share,” said Archbishop Welby in a statement.
“The widening gulf between rich and poor, and fears about the future
among young people and their parents, have damaged our nation’s sense of
itself,” he said, adding that “achieving prosperity and justice together
is not only a moral imperative — it is an economic one.”
The committee included academics, business executives and a trade union
leader as well as Archbishop Welby. He has spoken publicly on policy
issues before, but his comments may rankle those who feel the church
should stay away from the political arena.
Over all, the report painted a bleak picture of the country’s economic
performance, arguing that “it is impossible to escape a palpable feeling
that the economy is not working for most people.”
The report found that “earnings that have been stagnant for a decade are
combined with greater insecurity at work.”
It added: “Young people have been hit particularly hard — many unable to
afford a home of their own and on course to be poorer than their
parents. Whole communities feel left behind. Many people feel powerless
Many of the proposals are likely to be welcomed by the opposition Labour
Party, led by Jeremy Corbyn, which is calling for an increase in
government spending, greater investment in industry and the
nationalization of the railways and some other utilities.
But Conservative Party politicians have also worried for years about low
British productivity. When Prime Minister Theresa May came into power in
2016, she said she wanted to help families who were “just about
managing,” and to increase the representation of workers on company boards.
Much of that agenda faded, however, after Mrs. May lost her
parliamentary majority in last year’s general election, and as she
fights a bitter internal battle over her plans for Brexit.
The report also called for a rebalancing of economic power from
corporations to trade unions, greater devolution of political power away
from London, moves to create more affordable housing and to combat house
price inflation, higher taxes on the very wealthy and efforts to
incentivize long-term investment over short-term profit.
It urged greater use of robotics and automation alongside retraining for
those whose jobs are lost.
Among more than 70 recommendations are an increase in the minimum wage,
higher pay for those on employment contracts that do not guarantee work
and the inclusion of workers on boards of companies with 250 or more
Tax on corporations should be raised, and work and wealth should be
taxed on an equal basis, the document suggested. It also proposed that
the inheritance tax should be replaced with a lifetime gift tax, levied
on recipients rather than estates.
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