It’s what you get when the magic money-tree suffers a crop failure. I don’t know whether our old MP Amber Rudd was the first one to claim “there is no magic money tree”, but she was most definitely one of those stashing their income in tax havens whilst telling us there was no magic solution to a shortage of government income.

We, the Labour Party who opposed her, used to take that ‘magic money tree’ out campaigning and invite people to sit in it and tell us about the local services and facilities they’d missed since they closed, and new ones they’d like to see instigated. Then we’d discuss how a council that could afford to employ people to do those things would actually solve the financial crisis.

People didn’t reject that Labour Party regeneration policy, the one in the manifesto called For the Many. What they rejected was an imagined antisemitism crisis and all the lies they were told over Brexit.

I’m not just guessing — I was out on the streets with my red rosette on right up until the day of the 2019 election, and that’s what they told me. How did we all get thrown so badly off course…?

That word ‘fiscal’

It took me ages to get around to checking this out. ‘Fiscal’ is one of those words you have to look up every time you need to understand a sentence from the news, they’re so eminently forgettable.

Don’t worry if you didn’t get around it it. I checked (again)…

Well, it’s not £22 billion missing from some hypothetical government piggy bank. We know the former government threw away far more than that. To just take one example, the government spent between £300 and £400 billion on dealing (incredibly badly) with COVID. A fair proportion of that went to waste – for example the test-and-trace program cost £37 billion, of which £35 million went on that notorious app, and as for dodgy PPE, Michelle Mone alone went off with nearly £30 million.

No, if our  current government was being obstructed by a big lump of money missing from their piggy bank, they’d be chasing the COVID profiteers (and all the other Tory grifters) to get it back, wouldn’t they?

But they aren’t.

A fiscal shortfall is a lack of money coming in – a lack of revenue. Revenue is the government’s annual income, and they get it by collecting taxes, so when Rachel Reeves took up the post of chancellor, threw her hands in the air and declared a £22 billion blackhole, it simply meant she hadn’t looked at the figures on tax-income before entering office, and there wasn’t as much there as she’d hoped.

Tax the rich

When people say “tax the rich”, it might be just a desire to get back what’s been stolen but it’s also simple logic. If you close the tax havens and the tax loop-holes that billionaires and corporations have created, you can tax people who have lots of money. You get more revenue that way than you ever will from trying to squeeze people who haven’t got any.

Money-go-round

In short, government money isn’t a piggy bank, it’s a merry-go-round. Governments aren’t supposed to hoard money, they’re supposed to manage the flow of money. Money is the language we use to describe the flow of the economy, the power that makes the machine go round. The task of government is to keep it moving. Conservatives are right when they say you can’t solve everything by “just printing money” or “just borrowing”. It’s what you do with government money that counts. The task of government, what they need revenue for – is to service the education, training, care and employment of the people and the maintenance of their environment (housing, climate crisis etc) so they can work (produce stuff) and spend (consume stuff) and keep the country alive.

The government funds the producing and taxes the consuming so it can regulate the system and keep everything running right. It must also challenge damaging blocks on the flow, such as tax havens and extreme money-hoarders.

If that’s fiscal economics, then it’s nearly 50 years now since we had a government that did its job. That work stopped dead when Thatcher came along with her ‘kitchen sink economics’.

“Stop everything,” she said, “we can’t afford it.”

We’ve felt the loses every step of the way but it’s taken around 50 years to grind right down to the crisis we’re in now.

Get the economy going again

There is absolutely no reason to believe that stealing a few pounds from people’s PIP (personal independence allowance) will get the economy going. In fact, it will stop a few more people from working and spending. We need to put back the elements of the merry-go-round that 50 years of austerity governments have taken away.

That is, we need a government that can find, train and pay the nurses, the doctors, the teachers, the librarians, the train crews, the dinner ladies, the civil servants, the carpark attendants, the cleaners, the firefighters, the high street traders, the social workers… well, there’s no point in me re-writing the whole of the former Labour Party’s manifesto – you get the picture. Why did Starmer’s Labour turn their backs on all that?

Wait, the question is bigger than that…

Why did 50-yearsworth of governments not understand this?

Because we’ve suffered a progressive takeover of government by MPs funded by tax-dodging corporations who teach them to use lots of words like ‘fiscal’ to confuse people, including themselves, and keep the con going while they drain the life of this country to feed insatiable billionaire-run corporations, that’s why.

It really works, bunging in obfuscating words like that – everyone goes down the pub and chats about ‘the fiscal black hole’ and what the government should do about it, and where they think money’s being wasted, and the conversations never get anywhere because no-one’s entirely sure what ‘fiscal’ means, so they still believe that  £22 billion has gone missing from the government’s hypothetical piggy bank, and people like Rachel Reeves must know something they don’t.

Take a look across the Atlantic, where the USA is now being run by Elon Musk. That’s where the road will lead us, if we don’t put a stop to this obfuscation.

Helena Dollimore

As soon as our current MP, Helena Dollimore, opened her mouth at the hustings in 2024, we looked at each other and said, Amber Rudd’s back. And now, here’s Dollimore’s name on that letter from the 30 right-wing MPs who wrote to Liz Kendall urging her to get on and reform (meaning cut) welfare payments.

Just in case anyone can’t see what’s wrong with this, here’s Frankie Boyle explaining the problem…

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