NEWFRED

 

Be unified, or else   (29.5.10)

More on the subject of unity, alluded to in my post yesterday. In the name of preserving church "unity" Rowan Williams is enforcing division from those who are "rebels". It's an odd policy, that's for sure. It's rather like the two parties in the UK's coalition government trying to achieve a unified legislative programme by refusing to meet each other in cabinet. These would certainly be strange means to the stated end. Some would say we don't need theologians to provide this kind of leadership; after all, most people are familiar with the saying "cutting off your nose to spite your face". It's just that most people don't see the merit in making it an axiom of official policy.

What I don't understand is why "church unity", even if it is a good thing, is considered of such importance that it is allowed to trump the most pressing moral issues of our time. Ferdinand I, Holy Roman Emperor (1503-1564) famously said "Let justice be done, though the world perish." At the moment, the Anglican Communion's bickering is doing a pretty good job of letting the world perish. But where, exactly, is the justice?

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A U-turn   (28.5.10)

Recently retired Bishop of Southwark (and former Bishop of Leicester) Tom Butler is reported by the Church Times "to say that he has reversed his earlier conservatism on the gay issue." This is, of course, to be welcomed. But as it stands Butler's is a death-bed conversion, and death-bed conversions tend to be viewed in a certain way. When someone makes a U-turn after spending forty years travelling in the wrong direction, he is still left staring back at that forty year-long stretch of road and faces the pressing question of how to make up the lost moral ground. This is the situation in which the church as a whole finds itself today.

Butler writes, "The price of holding the Com­munion together can’t all be paid by stifling the lives of gay people in the West, and cruelly punishing them in Africa." I know Platitude for the Day is a programme devised to accommodate stating-the-obvious, but I can't help thinking that this idea really is a revelation to Butler, even if it's not a revelation to many other people tuning in. A moral U-turn? "I'm the Bishop of Southwark, that's what I do."

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New Steles at Liverpool Metropolitan Cathedral   (27.5.10)

Liverpool Metropolitan Cathedral, May 2010

Liverpool Metropolitan Cathedral, May 2010

Liverpool Metropolitan Cathedral, May 2010

Liverpool Metropolitan Cathedral, May 2010

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Tax and Spend   (18.5.10)

Over on Left Foot Forward, Tim Horton, research director of the Fabian Society, and Howard Reed of Landman Economics write about the proposed raising of the income tax personal allowance to £10,000. Their basic argument is that the move to raise the personal allowance is wrongheaded, because it does not substantially benefit the poorest (ie, those already below the current income tax threshold of £6,475. I beg to differ. Or rather, not so much to differ on that point of fact, as to cast things in a different light.

Their first claim is as follows:

First, raising tax thresholds doesn’t help the poorest because they don’t have enough to pay income tax. Though the tax cut would cost £17 billion, three million households in the poorest quarter of the population would get not a penny of help. That includes the majority of pensioners. We notice some Lib Dem election leaflets sold this policy as "£100 for pensioners". But it wouldn’t be. It would be £100 for the richest 40% of pensioners and nothing for the poorest 60% of pensioners.

This is why, lest we forget, Labour introduced the Winter Fuel Payment – not just to help with heating costs, but to provide a universal flat-rate payment that would help all pensioners without excluding the poorest. Let’s hope the Tories and Lib Dems don’t follow through on their sabre-rattling hints that they’d like to cut it.

Several points.

1. As David Willetts pointed out in 2005 in The Times -- in an article that Horton & Reed endorse -- this claim conflates two issues. On the one hand, the intrinsic justice of the tax system, and on the other, society's moral obligation to help the poorest. And, as Willetts says, it is the conflation of these two issues in policy terms that produced such convoluted systems as tax credits under the Labour government.

2. Now to the substance of Horton & Reed's first claim. They say that the poorest of the poor (ie, those earning less than £6475) do not benefit from the tax change, while those earning between £6475 and £10,000 do. They suggest that these are grounds for disputing government claims that such a change is designed to "benefit the poorest". For a start, Horton & Reed define "benefit" in a simple monetary sense, which is rather restrictive given the broad moral brush noted in my point a moment ago. We should not discount other kinds of benefit a raise in the personal allowance may impart on the poorest, such as delivering an incentive to work harder and earn more. Such an incentive is not negligible, as currently earnings between £6475 and £10,000 are taxed at 20%. In other words, the incentive being delivered to the poorest is precisely £705.

3. On a related note, Horton & Reed thus make the bizarre implication that it is disingenuous to include those earning between £6475 and £10,000 in the group we label "the poorest". Who counts as "the poorest", of course, depends entirely on where we draw the threshold between "poor" and "poorest". But given that the average per capita gross income in the UK is around £25,428 (Office for National Statistics, 2009), it seems to be both a conceptual truth, and a reasonable analytic deduction, that those earning between £0 and £10,000 a year are the poorest in our society. And the simple fact that a single policy move does not benefit every member of that group does not mean that it does not benefit a substantial number in that group. For that reason it is true that a rise in the personal allowance would indeed "benefit the poorest". Indeed, to suggest otherwise is little more than question-begging.

4. That disingenuous analytic point also implies that it is somehow undesirable to take those earning between £6475 and £10,000 out of the tax system simply because they earn more than those earning below £6475. Government certainly has a duty to relieve those earning below £6475. But that does not preclude also pursuing policy that helps those earning between £6475 and £10,000. A government that enacted policy on that basis would be a strange kind of tyranny.

5. Now, regarding Horton & Reed's flourish concerning the winter fuel payment. What they say is correct as far as it goes, namely that it "provide[s] a universal flat-rate payment that [...] helps all pensioners without excluding the poorest." What it fails to mention is the cost of this universal entitlement. Namely, that the elderly -- even if they were multi-millionaires -- are entitled to receive the winter fuel payment. So Horton & Reed's implication -- that a measure is fair simply because it is universal -- does not live up to even the most cursory examination. It is clearly not a just use of public money to be subsidising the heating bills of multi-millionaires.

Second, the vast majority of this revenue goes not on cutting tax for the low paid, but cutting taxes for richer households. Some 70% of the benefit goes to the top half of society. And only £1 billion of the £17 billion cost – just 6% of the total – actually goes on the often-stated aim of "lifting those on low incomes out of tax".

6. Here, Horton & Reed almost have a point. Almost, because it is true that raising the personal allowance for the lowest earners also raises the personal allowance for everyone else. What they fail to mention, however, are the several ways in which this shortcoming could be overcome. The simplest of these is to raise the basic rate of income tax to a level that negates the loss of revenue caused by raising the personal allowance. And what Horton & Reed should really be writing their article about is this issue -- and applying pressure to the new government to explain how they are going to make personal allowance rises fiscally neutral. (The irony here is, of course, that their Darling Labour Government were the culprits for cutting the 10% tax band and cutting the basic rate from 22% to 20% -- a de facto tax cut for the middle classes and tax rise for "the richest of the poorest", as the authors might like us to call them.)

7. Instead of driving home this point by questioning the level of the basic rate, Horton & Reed lament the fact that the richest in our society are not going to be taxed more under this government:

Back in the old days – when the Libs were a progressive party of the left - the proposal was for a "tax switch", taking £17 billion off the super-rich (highly progressive) to fund the cut in income tax (itself highly regressive).

But now it's just become the tax cut. The Lib Dems have agreed to drop many of the progressive measures to pay for it, such as a mansion tax and scrapping higher-rate pension relief.

They do not attempt to address the usual objections to such a policy: the fact that realistic increases in the top rate of income tax generally deliver only a small rise in revenue; the fact that such a measure makes the national economy less competitive and less attractive for international business; the fact that a punitive top rate of income tax disincentivises middle-income workers, etc.

Finally, the Lib Dem tax cut would give more to richer households than to poorer ones, as the graph below shows. Households near the top of the income spectrum would get on average four times as much as the poorest. The result would be a large increase in income inequality in society – especially between the bottom and middle (relative poverty).

8. Horton & Reed's third and final point echoes their first, but specifically names the issue as an "increase in income inequality in society". Here David Willetts' point is again relevant. For the taxation system is not in itself a tool for equalising income inequalities: rather, it is a tool for gathering revenue for the exercise of governmental duties, of which one duty is such income redistribution. And the other requirement that a good and liberal taxation system must also fulfil is that taxes levied on personal income should not, in and of themselves, be unjust. To say, as Horton & Reed do, that the tax system itself should be a tool of redistribution is to conflate the issue of taxation with society's "obligation to help the poorest". What Horton & Reed should really be talking about is how all the departments of government -- not only the Inland Revenue -- should fulfill this obligation.

The Liberal Democrats' aim of raising the personal allowance is a noble one. When the income tax was established as a permanent feature of British governance by the Conservative Robert Peel in his 1842 Income Tax Act, the poorest were totally excluded from the system. Taxes were levied on incomes above £150 -- in today's money, about £115,000. All moves that return the burden of taxation to higher earners is to be applauded. Our job as scrutineers of the changes being proposed by our new government in 2010 is first, to ensure that this burden really is shifted up the income scale, and second, to draw attention to the other -- and far greater -- tax burdens borne by the poorest in society. Foremost amongst them is the archaic and unjust system of council tax, which needs reforming without delay.

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Banal Benedict   (13.5.10)

"'The greatest persecution of the church doesn't come from enemies on the outside but is born from the sins within the church,' [Pope] Benedict told journalists travelling with him to Portugal."

Finally. It's only taken him HIS WHOLE LIFE to recognise a fact that was blindingly obvious to anyone with even the smallest capacity for rational thought. Rather begs the question, if it takes him 80 years to fathom the logic of this one, why should we listen to a word he says about any other -- much more morally complex -- subjects?

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Voting Liberally   (6.5.10)

If there be any party which is more pledged than another to resist a policy of restrictive legislation, having for its object social coercion, that party is the Liberal party. (Cheers.) But liberty does not consist in making others do what you think right, (Hear, hear.) The difference between a free Government and a Government which is not free is principally this—that a Government which is not free interferes with everything it can, and a free Government interferes with nothing except what it must. A despotic Government tries to make everybody do what it wishes; a Liberal Government tries, as far as the safety of society will permit, to allow everybody to do as he wishes. It has been the tradition of the Liberal party consistently to maintain the doctrine of individual liberty. It is because they have done so that England is the place where people can do more what they please than in any other country in the world... It is this practice of allowing one set of people to dictate to another set of people what they shall do, what they shall think, what they shall drink, when they shall go to bed, what they shall buy, and where they shall buy it, what wages they shall get and how they shall spend them, against which the Liberal party have always protested.

— W.V. Harcourt, Liberal, 1872

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portrait of a memory   (5.5.10)

a boy stands next a wall,
eyes fixed on something out of shot,
left knee inclined, the other locked.
hands rest somewhere beneath a blazer.
he's short black shorts and long grey socks,
a games bag and two muddy Reeboks.

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Newfred is where Andrew Wilshere blogs about
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