“Where’s the money going to come from?” It’s a question a lot of people ask on the doorstep, when Labour campaigners come around and tell them we have the answers to the problems the Conservatives have created. Surprisingly often, the question wrong-foots the canvassers. It’s because it’s such an illogical question. How do you pay for a revenue generator? It’s like saying where do you find the energy to eat your dinner?
Here’s my answer:
How do we pay for renationalising the NHS? By rejecting deals with private companies that put hospitals expensively in debt, by refusing all corporate ‘services’ that are priced so high to pay for share-holders’ dividends and commercially minded managers’ salaries.
In short, we pay for renationalising the NHS by renationalising the NHS.
How do we pay for renationalising the railways? Pretty much as above, except that we don’t even have to get into arguments about ‘compensation’ for companies that were expecting to get rich out of our railways – we just take them back when their franchises end. We could also drop ticket and season ticket prices so that more people could afford to use the railways, if we re-invested the money currently going to foreign companies in profits.
In short, we pay for renationalising the railways by not paying for any more franchise deals.
How do we pay for all the local authority schools, childrens’ centres, libraries, museums and other education projects we’ve been losing in recent years? By ceasing to funnel vast amounts of government money into private and semi-private ‘academy’ companies.
In short, we pay for education and culture by renationalising education and culture.
How do we pay for running the tax collection system properly?
By adjusting taxes so that those who can afford to pay more – the millionaires, the billionaires and the corporations – do pay more. We can put a small proportion of the revenue generated that way into re-staffing and powering up the HMRC so that it has the capacity to administrate and collect all the tax that should be collected. The result will be a MUCH greater income, with less burden on those who DON’T have large amounts of money to pay taxes with.
How do we pay for setting up a national investment bank?
With the rest of the income generated by sorting out the tax system.
How do we pay for the council houses, the new schools, childrens’ centres and care services, and the green infrastructure we’re desperate for? With the money generated from the national investment bank, once it’s set up and funded by the money rolling in from the HRMC.
How do we get everyone who wants to work back into work so they can pay some taxes and keep things rolling? By employing them to get on with all the things listed above.
Any other questions?
Update added 20th May 2017: some other questions did come up – here are some answers to those, courtesy of We Own It …
15 responses to “The answers…”
We have to be very careful in relation to a national investment bank, fundamental to this would be the re-nationalisation of the Bank of England, Attlee excepted the advice of Maynard Keynes who pointed out we cannot rely on the machinations of a bank rate controlled by the private sector.
How do we make those who don’t want to work, but let others do their share,. Who expect the working taxpayer to pick up their “tab” and keep them fed, clothed and watered. Better still How will YOU do it?
Every man or woman sleeping rough is not a junky or sott , the country has lost compassion.
Useful material, but not sufficiently clear on the tax issue. Heavier taxing of the income of the richest will not generate anything like enough money to pay for the things we want. Are we advocating a land tax or a wealth tax?
Very concerned that companies such as Branson’s Virgin, sue the NHS for breaking their contracts. How do we stop them?
Brilliant, thank you!
All of this is correct as far as it goes. But it’s even less of a problem than all that.
The question highlights the back-to-front way most people perceive the economy. They think money is earned by the people and then some of it is siphoned off by the state in taxes to pay for goods and services. It’s actually the other way around.
Via its central bank, the state issues money around the population in the form of payments to businesses and individuals for works performed. The state then imposes taxes to create a demand for the money i.e. if people know they have to pay a certain proportion of pounds back to the Government each month, it encourages them to do all their business in pounds so that they have a supply to pay up with. Therefore they won’t use a different currency, or go back to bartering with sheep etc.
Strictly speaking, taxes brought in do NOT go into funding anything, not in a digital age economy. The monies brought in are simply cancelled out of existence. (If you went to the tax office and paid your income tax in banknotes, which of course no one bothers to do these days when money can be wired in seconds, the notes will probably be SHREDDED rather than retained; the payment amounts will be deducted from what you owe digitally, and the Bank of England will have no practical use for the notes after that, so best just to destroy them and reduce any inflation risk.)
The state therefore can decide for itself exactly what size it wants the money supply to be, and can issue any amount it deems appropriate to pay for services it wishes to supply to the population.
Easy answers – renationalise. That was a Labour Party policy back in the 50s, 60s and 70s – we ended up with the Unions running them, and they didn’t do too good a job, as I remember – always running at a big loss, to be funded by the state, somehow.
Let’s have the full costings, in detail. How much will the policies actually cost, and how much extra revenue will result, then we can see what the ‘gain’ or ‘loss’ is.
Unless these costings are published, in detail, I will remain unconvinced.
And, who will run these renationalised industries? Where will you pluck the leaders and good managers from with the competence and skills necessary to run a business, because it is not a co-op shop on the corner that we will entrust the £billions involved.
Also by diverting billlions spent in Trident!
Good article. We also need to point out that:
+ New housing will pay for itself over time with revenue from sales and rents.
+ Every new tax collector employed collects many times their cost in extra tax revenue.
+ The National Investment Bank can be funded with the £400 billion balances languishing in UK banks with no profitable outlet. It could be brought into the NIB through Bank of England Special Deposits at minimal interest.
Have you tried that on people. I can imagine what people round here would say to you.
What are the figures for all these points? They are alright in principle but you need to evidence st least £22billlion after penalties for the NHS alone. If it’s possible then the activists need the figures at their fingertips. This article doesn’t provide that whether it’s true or not and on the doorstep it’s just not credible without.
Sorry all – I completely forgot to come back and allow comments but – looks to me as the comments answer each other so not much for me to do. Thanks for all of them, anyway.
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