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10 March 2016

Why George Osborne’s climbdown from pensions reform was predictable – and poor

Plus Daily Mail euphemisms, ignoring Bernie Sanders’s success, and a councillor’s righteous rage.

By Peter Wilby

George Osborne has learned once more why it is so hard to reform Britain’s unfair and complex tax system: whatever changes you make, the losers’ protests will create far more noise than the winners’ applause. That is particularly so when the losers include national newspaper editors, top broadcasting presenters, most Tory MPs and nearly everyone in the City of London.

Tax relief on pension savings costs the ­Exchequer £35bn a year, of which two-thirds goes to the top 10 per cent of earners. Almost nothing goes to those on below-average incomes because even if they can afford to save they don’t pay enough tax to qualify for significant relief. Osborne proposed to tackle this in his forthcoming Budget. Although the details weren’t decided, the simplest practicable idea was to add a flat rate of, say, 30 per cent to whatever savers put into their pensions (up to a maximum annual sum), regardless of how much tax they had paid. This would be a clear gain for lower earners and a clear loss for the rich.

Confronted by the wholly predictable
clamour of the latter, Osborne backed down. All he achieved was to cost the Treasury £1.5bn – tax relief on what high earners put into their pension pots over the past year to beat the expected change – and to allow the Daily Mail, which inevitably launched a “save our pensions” campaign, to claim a mighty victory. A poor show for the supposedly reforming Chancellor.

Trumped by Bernie

In all the excitement over Donald Trump, hardly anybody has noticed Bernie Sanders’s success in appealing to the wider American electorate. According to a recent poll for CNN, if Sanders were adopted as the Democratic candidate, he would beat Trump more comfortably than Hillary Clinton would. He would also win easily against Trump’s main rivals, Ted Cruz and Marco Rubio, whereas Clinton would struggle against them.

Paradoxically, Sanders is beaten consistently by both Trump and Clinton when voters are asked which candidates they trust most to handle the economy, terrorism, ­immigration, health care, race relations, foreign policy and gun control. The pollsters didn’t think – or, more likely, didn’t want – to ask about inequality and low wages, issues that may be near the top of Americans’ current priorities. It is a measure of the success of neoliberal ideology that voters are now not even asked about such matters.

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Pot plant conspiracy

Commenting on the presidential candidates, the Daily Mail’s Richard Littlejohn writes, “They all sup from the same pot.” I detect the Mail’s quaint suburban gentility at work here. What Littlejohn would have liked to write (and perhaps did write), I suspect, was: “They all piss in the same pot.” It’s an old northern English metaphor that better conveys the conspiratorial intimacy and commonality of interests of which Littlejohn was accusing the candidates, particularly Trump and Clinton. It derives from the Lancashire mills, where workers all relieved themselves in a single pot so that their urine could be used to scour the cloth.

Jeb Bush half-jokingly suggested that Trump was a Clinton plant in the Republican primaries, a proposition that Americans, who love conspiracies, have debated eagerly. The attraction of Sanders is that he cannot be accused of going anywhere near the other candidates’ pots, whatever they use them for.

 

Football cartel

The richest English football clubs – Arsenal, Chelsea, Liverpool and the two Manchesters – are reportedly so alarmed by the unexpected success of my home-town team, Leicester City, that they seem to want, in future, automatic entry for themselves into a “European super league”. This is a perfect example of how capitalism tends towards monopolies and cartels. Before the commercial demands of the TV moguls coincided with those of elite football clubs, teams such as Ipswich, Burnley, Blackburn, Derby and Nottingham Forest could emerge as English champions. Now it is rare for any team outside the big five to make the top four places in the Premier League that determine European qualification.

That is how sport works under pure capitalism. American football’s “draft” system, giving the least successful clubs of the previous season first choice of college graduates, is sometimes hailed as socialist-style egalitarianism. It is nothing of the sort: it simply ensures that a cartel of established franchises (with no promotion or relegation) has enough competitive matches to sustain interest.

 

Thinking local

To a local council planning committee meeting, where my wife and I object to architects building an office extension in view of our back windows. We sit through 11 planning applications preceding ours.

The highlight concerns a proposal for several council-owned garages, rented by local people, to be demolished in favour of affordable homes. A young woman speaks eloquently about shift work, the double yellow line outside her home and other reasons why she needs her rented garage space. A councillor, in a magnificently furious speech, asks why affordable homes – presumably, he says, for people with little money – need two parking spaces each.

Encouraged by MPs and business leaders, we mock and denigrate local government, complaining about “red tape” and pompous, jumped-up councillors and bureaucrats. But in meetings such as this, you see politics in its most basic form: clashes, which must somehow be resolved, between one person’s need for somewhere to park and another’s need for a home, between my wish to see gardens from my window and a business’s wish to expand (in case you’re interested, the latter won). The decisions will matter far more to many people than anything discussed at Westminster. If we allow local government to wither, we do so at our peril. 

This article appears in the 09 Mar 2016 issue of the New Statesman, American Psycho