Mythbusters – “Taking us back to the ’30s” and other nonsense

I am pleasantly surprised at how readily people in Northern Ireland are seeing through some of the nonsense put out by outdated Socialists posing as trade unionists over the past few days.

Let us be clear, Trade Unionism is a good thing. It remains essential that employees can unite to oppose poor work practices, discrimination and unfair pay. Many Unions remain constructive and effective.

Unfortunately, some Trade Unions are allowing their agenda to be set by people with outdated political ideologies rather than the real interests of workers at heart. It is, for example, completely impossible for a true advocate of workers to defend the current welfare system in Northern Ireland, which openly impedes people (potential Union members!) from entering the workplace.

It is noteworthy also that the Unions were so unwilling to publish exactly what the vote was for strike action; or to public their Leaders’ salaries; or indeed to publish exactly what the goal of the strikes is.

Let us, for the record, dismiss some of the nonsense…

“These cuts are taking us back to ’30s levels of poverty”

My father grew up in a series of orphanages in the 1930s, so I find the notion that any worker suffers anything remotely close to the circumstances in which he grew up personally insulting.

The origin of it appears to be the suggestion by a senior Conservative that government spending as a share of GDP should be 35%. Someone, somewhere noted that it was 35% at the end of 1939. However, it was actually 36% in 2001, after a full term of a Labour Government!

This is to leave quite aside the point that making the correlation between government spending as a share of GDP and levels of poverty is ludicrous.

“This is the bankers’ fault, so why should we have to deal with it?”

Even if the crisis is the bankers’ fault, it is specifically the fault of lax banking regulation.

But here’s the thing – we all gained from lax banking regulation. It enabled us to take out mortgages we would never otherwise have been allowed; to go on two holidays every year rather than one holiday every two; to buy a premium brand car. It also enabled businesses to pay for new offices, improve terms, and take on new workers. All of this greatly increased the tax take – in VAT receipts, National Insurance contributions and corporation tax. But none of this was “earned” (the UK did not suddenly become a more innovative, export-driven country) – it was borrowed.

When the system fell apart (what you borrow you must eventually pay back after all) and stricter banking regulation was imposed (quite rightly on the Unions’ own terms) this meant it became tougher to keep up the mortgage, tougher to spend on leisure, and tougher to manage car repayments. Businesses could not access credit (banks had to keep more deposits), take on new workers (as there was no case for taking the risk) or even tread water (as customer spending collapsed because people could no longer borrow). As a result, Government tax receipts vanished.

This means two things. First, we all gained from the boom and thus it was inevitable we would all suffer from the bust. Second, Government is not excluded from this – just as every household and business has had to trim down and cut out inefficiencies, so must the Government. This latter is even more important since the Government now receives less in tax as households and businesses reduce spending as a result of not being able to borrow; and also because in theory the Government itself cannot borrow so easily (although, for complex reasons, the UK and a few other countries have not had this problem).

“This is about public services”

If it were about public services, you would not withdraw them causing great irritation and inconvenience.

No, it is about fear among public sector workers that their pay and jobs are less secure. No one would not sympathise with this. However, as noted above, it is the same for us all. Let us at least be honest about it.

“This is about low-paid public sector workers”

Yet apparently it is also about the loss of “20,000 well paid jobs”…

“We are taking 20,000 well paid jobs out of the economy”

There’s that “out of the economy” line again. They are not being taken “out of the economy”, because the economy already pays for them – the salaries, most of the pensions, all the added extras (including workplace, training etc) are paid for by the tax payer. If the job no longer exists, the tax payer will no longer have to fund it and the money will go back into the pot.

“This is about the tax dodgers”; “This is about the Stormont House Agreement”

Well it cannot be both, for a start! The Stormont House Agreement is about devolved institutions which do not have tax powers.

As I have discussed many times before, the rate of conviction for tax evasion is increasing and the UK is in fact better at collecting tax and stopping evasion than most (notably better than Ireland and Germany, for example). Yet even if the UK managed to get to zero tax evasion (which no country does), it would still be averaging a 2.2% trade deficit every year – in other words, it would still be becoming poorer versus the rest of the world. That has consequences – not least on the availability of revenue to pay for public services.

This is the crux of the problem – for every 20 strikers, there seem to be 21 different reasons for being on strike.

“It’s about the politicians…”

Then why are you allowing politicians from the parties implementing the budget reductions on your picket lines?!

To be clear, some of the reasons for frustration among public sector workers are entirely legitimate. This only makes it worse that those legitimate reasons are being lost in a fog of populist deception led by people whose motivations are to do with political ideology (and, frankly, ego), not practical representation of workers and delivery of outcomes on their behalf.

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One thought on “Mythbusters – “Taking us back to the ’30s” and other nonsense

  1. Jonathan says:

    fantastic blog post, great read

    Thanks

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