It has been all too common to hear journalists and columnists writing off Occupy London as ‘anti—capitalist’. ‘If they don’t like capitalism’ they say in almost—unison ‘ why don’t they just move to North Korea?’ The assumption is clear: there are only two choices. Either you have capitalism, exactly as we currently have it, or you have complete state control of the entire economy and a communist state. This is lunacy. There are many ways to organise society and the economy, and to suggest that there is only a simple binary choice is disingenuous nonsense. Even the most neo—liberal state has some services provided by the state, and the most socialist countries have always had markets of some kind. We a really faced with a series of spectrums, of state control/market and egalitarian/libertarian, and a range of choices that fit into no easy ideological boxes. There are many changes we could make to make our society more stable, more equal and more sustainable without reinventing the wheel. Here are 10 suggestions for change that don’t depend on global revolution.
1. National Investment Bank
Out of the parts banks currently owned by the state after the 2008 crisis the government creates a permanent, well capitalised, state investment bank. The bank invests in British business with priorities decided by the government, focusing on investments that are long-term, sustainable, supportive of regional growth, and lead to decreases in Britain’s carbon emissions.
2. Support the European Financial Transaction Tax
The European Union is proposing a tax on all financial transactions within the EU, designed to raise £47 Billion a year, which could be use to pay down national deficits and recapitalise European Banks. The British government is currently lobbying against this, and threatening to veto it.
3. Reform and Increase the Size of the Inland Revenue
The Inland Revenue is unable to compete with the army of lawyers and accountants employed by large corporations. Under the current leadership of Dave Harnett, it has signed a number of deals with large companies over past liabilities that have been widely seen as excessively generous, depriving the public purse of billions of pounds. The Revenue needs new leadership, and a substantial increase in staffing levels in order to effectively pursue elite tax evasion. A move to a ‘principle based’ approach to taxation, to make it harder to find loopholes around, should be seriously considered
4. Updating Council Tax Values to undo cuts to local services
Council Tax rates are still based on 1991 Property Values. This is unjustifiable, and fails to tackle the large amount of unearned wealth gained by property earners in London and the South East from the property boom of the 90s, and 2000s. Revaluation would be likely to increase council tax receipts. This extra money could be use to at least partially reverse the cuts to services funded by local authorities, the most damaging of all the cuts: youth services, old age provision, disability support, employment centres and housing support.
5. Citizens Inheritance
A substantial ‘inheritance’ granted as a lump sum granted to all citizens on reaching the age of 18. To be funded by a substantial increase in inheritance tax. This would, for the first time, make the idea of equality of opportunity genuinely meaningful.
6. Large Scale Programme of Domestic Insulation
A programme designed to tackle both the high energy prices currently faced by households and the amount of carbon emissions produced by domestic heating in poorly insulated homes. Such a programme could also function as a Keynesian economic stimulus. The programme could be partly funded by a one-off tax on energy companies.
7. Crackdown on Tax Havens
It is estimated that at least 1/3 of the world’s wealth is held ‘offshore’; in small countries in which tax rates are low or non-existent, and where global corporations and individuals base themselves to minimise their taxes. The explosion of tax havens is major contributor to the negative balance sheets of so many ‘onshore’ countries. Britain is at the heart of the tax haven system, having some form of jurisdiction over Jersey, Guernsey, Sark, The Cayman Islands, Bermuda and other small islands. It would take a massive legal fight, but parliament has the power to force these Crown Dependencies and Overseas Territories to adopt tax laws that are approximately in line with mainland Britain’s.
8. Increase Bank Reserves Ratio
The relatively small amounts of capital held by banks in relation to the money they had lent was a major cause of the economic crisis, and of the state bailout of banks. Moves are already in place to increase the size of this capital, in the ‘Basel III’ reforms and the UK’s ‘Vicker’s report, with the latter advocating capital of 10%. These plans may not, however go far enough to prevent further crashes and bailouts, and the financial industry is lobbying for the least stringent measures it can get away with. Government needs to impose tough regulations on this front, to force a much higher level of stability on to the banking system.
9. Major Expansion of Support for Community Ownership
The government has paid lip service to community ownership, the idea that communities can buy or take over land or building when being sold by the government, but has given then no preferred status or discounted rate. A system could be created whereby a credible community not for profit group has preferential status in purchasing assets such as sites for housing (community land trusts), libraries, schools and pubs if they are otherwise being sold off, and can buy them at a reduced rate (perhaps with generous loan scheme from a state investment bank).
10. Democratise the City of London
The City is at the centre of Britain’s financial system, yet its system of governance is positively feudal. Its lack of democracy allows the secretive and corrupt practices of the city to continue. It needs a local council like all others, one member one vote, and to be fully under the control of Parliament. Ownership of the substantial assets it controls needs to be transferred to government.