‘I’m tired of the trickle-down economy. It never worked.’
Not my words, or even the words of a Labor politician but the words of the American president Joe Biden this week the leader of the world’s largest economy. And he couldn’t be more correct.
Trickle-down economics, I assumed, was a thing of the past.
But a few weeks after he was appointed prime minister, Liz Truss seems to be embracing this flawed ideology with plans including: lifting the limit on banker bonuses.
It is based on the theory that you have to disproportionately favor wealthy people and companies in the short term in order to raise the standard of living of everyone in the long term.
This is a refuted hypothesis, that failed time and again. The top 1% will do everything in their power to hoard wealth and profits – we simply cannot improve the lives of people across the country by giving more money to the wealthiest in society.
At a time when people have a cost of living crisis, as large companies bring in excess profits, has spectacular misinterpret the mood of the country.
The prime minister has labeled the move to lift the cap on bankers’ bonuses a “difficult decision” – so difficult, it seems, that she did it within weeks of taking office.
Aside from the moral argument, we also need to be clear that there is no correlation between high bonuses and better performance. In 2014, the bailed-out Royal Bank of Scotland handed out £421 million in bonuses, despite seven consecutive years of losses.
This decision exposes the priorities of the Tories. Truss said that “stimulating economic growth can mean doing unpopular things,” which seems to be an admission that she just doesn’t care what people think.
Before the infamous crash of the early late 2000s, bankers’ bonuses were on the rise, reaching £16 billion in 2007.
The current cap, introduced in 2014 after the crash, caps annual payouts to twice a banker’s salary because everyone could see this pernicious culture spiraling out of control.
Last year UK banks made £45.6bn profit – clearly they are not being held back.
Labor must oppose this change more vigorously, because it is not against business to be against excessive corporate greed. The party should always be on the side of fairness to all.
It seems that wage moderation only applies to low-income earners, not bankers. The governor of the Bank of England has said workers should not be allowed to ask for large wage increases, while the government has refused to give workers wage increases in line with inflation.
The truth is that the Tory government will continue to help their wealthy friends, leaving working people without support in desperate times.
Boris Johnson, the liar-in-chief, may have been more adept at hiding the conservatives’ true intentions.
Liz Truss herself has admitted that her tax cuts will disproportionately benefit the wealthy. She doesn’t even try to hide it!
And, how could she? The Resolution Foundation says that on average the richest 10th percentage of households will benefit about £4,700 a year from the government’s cost of living, while the poorest 10th will receive just £2,200.
We mustn’t forget that Truss was forced into a humiliating turnaround before she even took office because of her plans to cut civil servant salaries outside 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 tackle the energy crisis, Labor has consistently called for a windfall tax to tackle excess profits – but Truss would rather borrow more money on the taxpayer’s back.
Her changes in the reduction of the stamp duty will only help people who can afford to buy a house – not get more people up the ladder.
The facts show that we have a high degree of wealth inequality. The gap between the wealthiest in society and the rest of the population has widened over a 10-year period, under successive Tory governments.
This may be why the Treasury is refusing to publish the UK’s 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 Tory-affiliated companies.
These ‘growth-stimulating’ measures may give a temporary boost on paper, but when wealth is hoarded by the richest in society, it is hollow.
Among the Tories, it is the working people who create the wealth in this country, but only those at the top who benefit from it.
Much like the government’s policy of setting energy prices, which only kicks in the butt and doesn’t address the core problem, I fear these measures are designed to distract people in the run-up to the next general elections.
It’s time to do things differently, with a focus on people for profit.
That should start with a comprehensive windfall tax on the excess profits of energy companies so that we can support the most vulnerable with their crippling bills.
It must mean giving working people a real pay rise, because if we value people’s hard work, society will prosper, living standards improve and crime rates fall, because the most vulnerable people in society get the support they need. to have.
And it must mean protecting the hard-won people from the right to strike.
I wrote in my previous column that the Tories are not on the side of working peoplethat we would see more of the same failures under Liz Truss, and that she would have a chance to prove me wrong.
Now that she’s only been in her premiership for a few weeks, I’m afraid I’ve already been proven right.
This government, like the previous one, cannot be trusted – it is time for real change with Labour.
Do you have a story you want to share? Contact us by email [email protected].
Share your thoughts in the comments below.
LAKE : Dawn Butler: ‘I had no symptoms when I got breast cancer’
LAKE : If the Tories have so much faith in their government, why can’t we hold a general election?
LAKE : Good morning Boris Johnson – he left a legacy of sleaze in Parliament