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Diary of a (Maybe) Retired Pastor

Tag: UK Economy

  • Ancient Economics For Modern Times

    mayberetiredpastor

    Ancient Economics For Modern Times

    6 This is what the Lord commands concerning the daughters of Zelophehad, “Let them marry whom they think best; only it must be into a clan of their father’s tribe that they are married, 7 so that no inheritance of the Israelites shall be transferred from one tribe to another; for all Israelites shall retain the inheritance of their ancestral tribes.

    Numbers 36:6, The Bible, Old Testament

    So, at last, we have a half-way sensible budget! Last week, the UK Chancellor delivered her first budget. Thankfully, the neo-liberal rhetoric of the general election was just that – rhetoric. What was actually served on budget day was a clear expression of traditional Labour values. Half-way sensible because General Election promises has meant the Chancellor resorting to raising employer national insurance contributions – a maybe dubious move. But, at least there was a return to common-sense economics – you get what you pay for! Someone has to pay in order to restore public services to good health and for investment in the economy. The new government has decided that it should be businesses.

    What the Chancellor’s first budget demonstrates is that the economy of a society is determined by the ethical framework that is applied. The social ethics of the Bible as expressed in the law of the Jubilee (1) are usually considered irrelevant and unworkable in a modern capitalist society but the underlying principles are, in fact, directly applicable. As encapsulated in the biblical quotation above the gift of the Promised Land is for the people of Israel – not just a ruling elite. It insists that every family possesses an inalienable right to their own parcel of land.

    What we see here is the delineation of society’s stakeholders as the people. The social ethics of the Bible lay down the principle that each and every stakeholder in society should have the same inalienable right to the economic resources necessary to support themselves and to flourish. In modern economies land is not the basic resource we use to measure and allocate economic resource that role is taken by money. Applying this fundamental biblical principle thus means that every individual should possess appropriate financial resources to support themselves and to build their lives. The idea of a universal basic income/universal basic wage sometimes discussed amongst economists is thus not so far-fetched if you are keen on seeing biblical principles applied in modern society. This is the idea that every adult receives out of general taxation, as a right, an income that would enable them to live at a minimum standard.

    Many Christians when first encountering this notion feel that this is something for nothing and a recipe for laziness. But this is exactly what it was in the Bible – inalienable land by right for nothing! But they still had to work their land wisely. In the same way, people receiving a universal basic income could choose to do nothing, but to prosper and be fruitful they have to work and use their basic income wisely. For the state, the advantages seem numerous: welfare support, welfare benefits, state pensions etc. all  become unnecessary. Administration of a universal benefit is simple and inexpensive (no need to means test or assess eligibility). Taxation becomes simple as all earned income  can be taxed directly at some appropriate level without the exemptions and allowances that bedevil most taxation systems and which create cliff-edges when benefits/exemptions are removed/reduced as earned income increases.  People would still be able to prosper and, for some, become rich, but inheritance tax (the year of the Jubilee) will ensure that excessive wealth accumulated by individuals is returned to the wider economy and thus to every stakeholder.

    The law of the Jubilee and its underlying ethical principles might have been originally decreed for an ancient agrarian society, but they can be applied directly to great benefit to modern society. For Christians this must surely be a good thing.

    1. The Most Hated Tax, Diary of a Maybe Retired Pastor, 25.10.2024

  • I Don’t Do Gift Aid Anymore

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    I Don’t Do Gift Aid Anymore

     This is also why you pay taxes, for the authorities are God’s servants, who give their full time to governing. 7 Give to everyone what you owe them: If you owe taxes, pay taxes; if revenue, then revenue; if respect, then respect; if honour, then honour.

    Romans 13:6-7

    We are in the fortunate position of being able to make donations to various charities. Of course, we give to our church and have always Gift Aided it, but we also try to support other causes. Lately, I have ceased ticking the Gift Aid box on the donation forms. Gift Aid is an option to include the tax that you would have paid on the donation so that instead of going to the government it goes to the charity. It occurred to me that the more we Gift Aided, the less of our taxes would be retained by the government and, hence, less would be available to fund public services. At a time when all our public services are financially compromised the government needs all the taxes it can get to keep them going! So, I have stopped adding Gift Aid to our donations.

    We need a different national conversation around tax. Our major political parties are locked into a “reduce taxes at all costs” paradigm. As a result, we see our public services crumbling and the government constantly finding new ways to increase tax revenue without appearing to do so. Consequently, our tax system is unfair, unbalanced, and inadequate. And it is opaque in the extreme! Certain sections of the media will stridently trumpet the historically high rates of taxation we are experiencing but (with the exception of one or two bodies) fail to point out that our taxation is no heavier than the average of similar European countries even at these historically high rates. The only winners of our tax system are the extremely wealthy.

    Our politicians treat us as children believing that we cannot hold an intelligent and mature conversation about the cost of public services and the amount of tax that needs to be raised in order to have good public services. They believe that we can be fobbed-off with constant reductions in general taxation and not make the connection with failing public services. Taxes have to rise and the extremely wealthy have to pay more in taxes.  This has to be done openly and transparently (i.e. income tax) and not through Faustian mechanisms designed to obfuscate and deceive. Of course, restoring public services and improving public services after years of deliberate financial starvation in order to fund tax-cuts cannot be done overnight. The Junior Doctors’ dispute is testament to that – restoring a 35% cumulative loss in pay is not feasible overnight but the present government, dogmatically wedded to reducing taxes, cannot provide a long term path to restoration that  might resolve the dispute.  But will the Labour Party, Keir Starmer and Rachel Reeves in particular, be bold enough to grasp the nettle and start to talk honestly about taxation and the cost of restoring public services? So far, the signs are not encouraging.

  • Government in Waiting

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    Government in Waiting

    So is the Labour Party a true government-in-waiting? Does the Labour Party have the answers to revive public services and restore the economy?  A couple of weeks ago I watched Rachel Reeves (the Shadow Chancellor) give the latest party political broadcast for the Labour Party. I don’t usually watch party political broadcasts but I was hoping to hear a radical new approach to public finances that would establish a sustainable framework for restoring and improving public services and provide a basis for a growing economy; so, I watched hers.

    Over the years, Keir Starmer, the leader, has not given any great indication of a fresh approach to the economy. But, perhaps, that’s because he’s more concerned with the politics and hasn’t wanted to give too much of the game plan away. But, surely, Rachel Reeves, as the Shadow Chancellor, in a general election year, would want to set down some very clear markers indicating how she would be transforming the economy. But as I listened, my rather low expectations became even lower.

    What did she talk about? She essentially talked about two things: She talked about Tory tax rises – clearly implying that tax rises were bad;  and she talked a lot about “growing the economy”. Oh, and she also talked about an “iron discipline” in regard to public finances – which is probably code for cuts in government spending! It all sounds depressingly familiar. It appears that Rachel Reeves’ and the Labour Party’s approach to the economy is no different from the Conservative Party’s approach. Rather than a government-in-waiting it seems that we should more accurately speak of the Labour Party as the Conservative Party-in-waiting!