Monthly Archives: March 2017
Last month readers from 20 countries (listed below) were attracted to the site, many reading Richard Murphy’s review of Colin Hines’ book about Progressive Protectionism but even more focussed on basic income, as John McDonnell announced that Labour has set up a ‘working group’ to investigate universal basic income, with Guy Standing (SOAS) as one of its economic advisers, a co-founder of the Basic Income Earth Network (BIEN).
For some years, America’s Nicholas D Rosen, a Patent Examiner at the Patent and Trademark Office, has advocated land taxation. In a 2012 forum entry he cites a book by economist Joseph Stiglitz, ” The Price of Inequality: How Today’s Divided Society Endangers our Future”.
Though Joseph Stiglitz expresses concern about America becoming less egalitarian and mentions reducing rent-seeking as a solution, Rosen points out that he does not mention the ultimate form of rent-seeking: collecting the ground rents of land.
He continues: “If an increasing share of gross national product is going to the top 1%, it is at least in part because they are the people who own most of the valuable land, and the rents of land are absorbing a larger share of production”.
The revered laws of the market do not apply: Rosen (2008) points out that no one is making more land to keep the price down by competition.
Rosen’s solution: tax the value of land, and cut taxes on earned income, sales and so on, making the tax system more progressive. He comments: “Unlike most schemes for doing so, it would not cause the productive to quit work, turn their efforts to finding loopholes in the tax code, or take their skills and capital elsewhere”.
Nine years later he has written a letter to the Financial Times’ editor:
Your editorial “Robot tax, odd as it sounds, has some logic” (February 21).
Regarding the possibility of taxing robots to preserve jobs, calls to mind Henry George’s Progress and Poverty. Writing in 1879, George noted that if labour-saving technology reached perfection, labourers would get nothing and capitalists would get nothing; all production would go to the owners of land, as land would still be needed despite automation.
Rather than proposing to tax robots, the great economist advocated a single tax on the value of land.
If we should ever achieve complete automation, this would enable people to be supported out of citizens’ dividends.
Short of complete automation, land value taxation still has important advantages, such as letting people keep what they earn by their own efforts, and putting the burden of taxes on those who enjoy the privilege of holding land that they did nothing to create.
He ends: “It would also help to make housing affordable and prevent the speculative bubbles in land prices that currently contribute to the boom and bust cycle”.
There was an outcry when the Chancellor Philip Hammond unveiled a National Insurance hike for self-employed workers in the Budget – now postponed. Some 4.6 million people, around 15% of the workforce, are now self-employed and data from the Office for National Statistics show that two thirds of new jobs in the UK created in recent years are down to self-employment.
Self employment, often insecure, low-paid, with no access to holidays, sick pay, maternity and paternity leave
Now sometimes known as ‘the precariat’, the self-employed, often work in service industries such as fast food, for security firms on temporary, even zero-hours contracts, or in the so-called ‘gig economy’. The precariat includes many workers who used to have skilled or semi-skilled but relatively well-paid and secure jobs, under-employed graduates, often working in insecure jobs requiring a much lower education level, migrant workers, and people from ethnic minority communities. As long as they have a contribution record established, they get the standard state retirement pension and older self-employed workers attaining pension age today have, in many cases, some pension accrued as employees for a number of years of their life which the present generation will not have. Benefits the self-employed cannot access relate to holidays, sick pay, maternity and paternity leave.
Earlier this month it was reported that Labour is to convene a summit to develop a new deal for self-employed workers and small businesses to develop Labour’s policy on self-employment. – recognising “that the world of work itself is changing”. John McDonnell, the shadow chancellor, said. “The labour movement has risen to challenges like this in the past. It was born out of the struggle for decent pay and conditions when new technologies were ripping up existing ways of working . . . We need that same spirit and vision again. So I’ll be convening a summit next month of unions, the self-employed, and small businesses to develop Labour’s policy on self-employment”.
Some have been in the forefront, pressing for such action, including Pat Conaty, David Hookes and – for many years – Guy Standing, a leading proponent of Basic Income. Pat writes: “The work of Professor Guy Standing at UCL SOAS and formerly at the ILO for 36 years on the Precariat Charter is superb”. See the links at the foot which include Standing’s 2011 Policy Network article.
Pat Conaty, Alex Bird and Philip Ross produced the Not Alone report that Co-operatives UK and the Wales Co-operative Centre have published with Unity Trust Bank – the trade union bank. It focusses on the needs of people in self-employment who face low income and social and economic insecurity – the ‘self-employed precariat’.
The executive summary records that there are now more self-employed workers than at any time since modern records began. Some 4.6 million people, around 15% of the workforce, are now self-employed and data from the Office for National Statistics show that two thirds of new jobs in the UK created in recent years are down to self-employment.
Many of the self-employed are among the lowest-paid workers in the country; their potential income is eroded by other costs such as agency fees and additional challenges relate to difficulties in not being paid on time and not having the right to a contract.
The report calls for the ‘cousins of the labour movement’ – co-operatives, trade unions and mutual organisations – to come together and help form cohesive institutions to unite the self-employed precariat, as illustrated in the model of a ‘solidarity economy’ partnership.
As Conaty says in correspondence: “God knows something has to be done for zero hour workers, growing ranks of exploited self-employed and those working all hours of the week in the gig economy to make ends meet”.
In the latest New Economics Foundation mailing there is a useful summary of these five omissions. One question asked by MacFarlane* is “What about the housing crisis?”
The Chancellor failed to mention housing even once, despite the fact that we are in the grip of a serious and escalating housing crisis. One of the things fuelling that crisis is the fact that the government is insisting on selling off public land rather than using it to help deliver more genuinely affordable housing.
At the current rtate, the new homes target on sold-off public land will not be met until 2032, 12 years laer than promised. And the majority of homes being built on the land sold are out of reach for most people — only one in five will be classified as ‘affordable’. Even this figure is optimistic as it uses the government’s own widely criticised definition of affordability. If the government ended the public land fire sale they could use that land to partner with local authorities, small developers and communities themselves to deliver the more affordable homes people need.
According to the latest Nationwide House Price statistics, as most people cannot afford to buy now even with a mortgage, cash buyers such as second homeowners and buy to let landlords are propping up the market. Things are getting worse for people left at the mercy of this failing market. The Chancellor could have put a stop to the fire sale of public land yesterday, but instead he acted as if there were no housing crisis all.
*Laurie MacFarlane is an economist whose work focuses on reforming the financial sector and the economy to align with long term interests of society. Before joining NEF he was Head of Analysis at the Water Industry Commission for Scotland, an economic regulator which ensures that water customers receive value for money and led a small team of economists undertaking economic and financial analysis and engaging with industry stakeholders. He also spent one year in the Markets and Economics division at Ofwat, where he worked on establishing the recent water company price determinations. He has worked closely with Common Weal, a progressive Scottish think tank which aims to promote a new vision for economic, social and cultural development in Scotland and has a particular interest in analysing the links between UK housing crisis, the finance system and inequality.
Read more here: http://action.neweconomics.org/people/entry/laurie-macfarlane
West Rhyl Housing Co-operative is Wales’s first urban rental housing co-op, formed by North Wales Housing, West Rhyl Community Land Trust and Wales Co-operative Centre, was funded by the Welsh Government and North Wales Housing and completed in January.
Anwyl, a local construction company, built the £1.4m housing scheme, in Abbey Street at the heart of Rhyl’s west end, overlooking the Gerddi Heulwen green space (above), which opened last year.The Afallon housing co-operative consists of seven new terraced three-bedroom family homes with gardens, built on the small brownfield site. The commercial premises on the site have been renovated, providing a community shop and bakery on the ground floor with four flats above.
Local families have moved into these affordable family homes built to a high specification and Code 4 standard of energy efficiency. People who currently live or work in Rhyl or surrounding areas were eligible to become tenants and members of the housing co-op. They are involved in managing their properties and will have a voice on future plans and projects in the area.
Wales is still building social housing and is about to abolish the right to buy. Its homelessness prevention legislation in 2015 is working well; the charity Crisis reports that though the number of households accepted as homeless in the last quarter of 2015 rose by 6% in England to 14,470. Kate Murray of the Guardian adds that in Wales the number fell by some 67% to 405 in the same period.
Those who remember our colleague Pat Conaty, now living in Wales, will be interested to hear that he has had a hand in the venture via his work with community land trusts and the co-operative sector.
Click on this link for information about other new co-operative housing projects in Glasgow, New Hampshire, South Lanarkshire and Rochdale, and about the February government white paper which includes an earlier proposal for a new £60m community housing fund in areas ‘affected by second-home ownership’ to support community-led housing projects and help local groups to deliver affordable housing aimed at first-time buyers.
George Morran emailed re the WMCA:
“My starting point has to be what future we see for Westminster, Whitehall and the shape of local government. These issues can only be seen in a wider English and UK context.
“The WMCA is a vehicle for Westminster and Local Government as it is.
“If you take my view that strengthening civic society and moving to a more sustainable economy are needed this requires a real downsizing of Westminster and Whitehall, the transfer of power and resources to the English Regions, a much more localised system of local Government and voting reform to give a wider range of interests a stake in new arrangements.
“Focusing on WMCA diverts scarce resources. We have to challenge the status quo and work up a real alternative to the Westminster and big LA conspiracy to maintain their stranglehold over Government, economic development and public service delivery”.
Despite George’s comment it seemed good to open a new WMCA section on the website after receiving a 50+ paper by Richard Hatcher. There is also a link to the WMCA Mayoral Election slides presented at the last meeting.
To see it, go to https://goodmorningamericaword.wordpress.com and hover over the WMCA headline to find these two entries/links.
Supporters of John McDonnell and/or UBI will be interested to know that random visitors flocked to that article – over 150 people in a few days – from many countries – see left.
And 18 people found the WMCA section only 15 minutes after posting!