{"id":227,"date":"2016-07-03T20:12:00","date_gmt":"2016-07-03T19:12:00","guid":{"rendered":"http:\/\/www.themap.org.uk\/?p=227"},"modified":"2016-07-08T09:23:32","modified_gmt":"2016-07-08T08:23:32","slug":"economic-briefing","status":"publish","type":"post","link":"https:\/\/www.themap.org.uk\/?p=227","title":{"rendered":"Economic Briefing"},"content":{"rendered":"

Work in progress, latest update 5\/7\/2016 –\u00a0comments welcomed….. to admin@themap.org.uk<\/em><\/p>\n

<\/b>This information is being prepared\u00a0for the Leader of the Opposition and\u00a0Shadow Chancellor as requested in face-to-face meetings during recent weeks.\u00a0 In the wake of the unexpected Brexit vote, which may give rise to a leadership challenge, and\/or a mid-term general election,\u00a0the urgency for\u00a0a credible economic alternative to be defined\u00a0has increased considerably. \u00a0<\/strong><\/p>\n

This paper, which is informed by work done by CCMJ – http:\/\/www.ccmj.org<\/a> – over several decades, in particular \u00a0the period since 1998, under the chairmanship of Rev Peter Challen. \u00a0It surveys the basic issues, giving references to organisations working on each, and suggests potential policy\u00a0initiatives that may have traction. \u00a0For continuity, readers are\u00a0reminded of the\u00a0House of Commons Debate:\u00a0“Money Creation and Society” that took place on Thursday 20 November 2014, which is recorded here: http:\/\/comer.org\/content\/UK_MoneyCreation.htm<\/a><\/strong><\/p>\n

 <\/p>\n

One reason for voting Brexit was a fear\u00a0of uncontrolled MIGRATION<\/b>. The EU\u2019s policy of free movement across borders, which, after the atrocities of the second world war, aimed to promote peaceful integration, appears to\u00a0have resulted in a net influx of people who are\u00a0perceived as either \u201ctaking our jobs away\u201d or having a free ride on our benefits system, but the underlying\u00a0reason was economic austerity. \u00a0However\u00a0immigration might be controlled, e.g. by making job offers mandatory and\/or by\u00a0limiting newcomers’ \u00a0access to benefits , whilst\u00a0ensuring provisions\u00a0for genuine refugees, we need to address the underlying issues, e.g. (a) improve the UK\u2019s skills\u00a0training, and (b) build infrastructure for\u00a0low-carbon\u00a0energy production,\u00a0e.g.\u00a0wind farms, and solar panels, in areas which have suffered industrial collapse, and (c) enforce the “living\u00a0wage” and ban\u00a0zero-hours contracts which prevent employees from engaging with other employers, (d) urgently\u00a0increase the stock of\u00a0social housing.<\/p>\n

The second type of reason given by Brexiters was TAKING CONTROL<\/strong>, which for most people was the\u00a0need\u00a0to re-establish sovereignty over our legal system. \u00a0Despite the fact that most\u00a0European legislation is generally considered to be beneficial to the UK, ensuring\u00a0common standards in relation to human rights, employment, farming subsidies, water management etc, the\u00a0decision to leave Europe will involve years of re-legislating not just these issues but also\u00a0renegotiating world-wide trading agreements, without necessarily improving on them.\u00a0The\u00a0perception that the EU is controlled by unelected officials and is a stepping stone to world government by the \u201cglobal elite\u201d is widespread. \u00a0When President Obama made his \u201cback of the queue\u201d statement, he was referring to the secretly in progress TTIP negotiations, which if agreed will enable international companies to sue national governments if their policies cause them to lose profits, and those taking this view are more than sanguine to see the UK omitted from these provisions. This ultimately leads to an examination of our\u00a0constitutional rules, and a number of different groups, \u00a0who were simultaneously considering different routes towards constitutional \u00a0reform,\u00a0have been brought\u00a0together by\u00a0Assemblies for Democracy https:\/\/assembliesfordemocracy.org<\/a>. \u00a0See also \u00a0http:\/\/www.constitutionalists.uk<\/a> and http:\/\/www.freecriticalthinking.org\/images\/Documents\/LeaptoSalvation\/NewModelCharter.pdf<\/a><\/p>\n

A third type of reason for voting Brexit focused consciously\u00a0on the problems of INEQUALITY.<\/strong>\u00a0The evils of\u00a0banking cartel practices were\u00a0identified by CCMJ in the sixties\u00a0and an increasing number of well informed analysts and activists, and as the antics of the neoliberalism proceed unchecked, the division between rich and poor has escalated.\u00a0 Whatever our relationship to the\u00a0EU, the\u00a0sorry truth is that most of the progressive policies\u00a0introduced\u00a0by Clement Attlee’s\u00a0Government in the post-war years have been systematically dismantled,\u00a0with creeping privatisation of \u00a0the NHS, secondary schools being turned into independent academies,\u00a0sell-offs\u00a0of the garden cities, a planned demise of local authority and housing association affordable homes,\u00a0with\u00a0rents of the remaining properties set to rise to 80% of the market rate, and\u00a0many of the\u00a0properties\u00a0emerging as\u00a0buy-to-lets and\u00a0properties built on land that cash-strapped local authorities have been forced to sell to commercial developers are being sold off-plan\u00a0to foreign investors, and\u00a0left\u00a0empty for “land-banking”, whilst the problems of homelessness are on the increase.<\/p>\n

 <\/p>\n

MONETARY REFORM:<\/strong>\u00a0 With much of the\u00a0UK\u2019s income being derived, not from productive industry but from the City of London’s position as an\u00a0epicentre for financial services.\u00a0 Whether or not one views fiscal\u00a0gambling manouevres as immoral, the activity amounts to a bubble that could collapse any time that market forces turn against it, making the UK vulnerable, and with Brexit,\u00a0the risk is even higher than before. \u00a0Positive proposals are thus needed to inspire confidence in the electorate. The purpose of these notes is to identify key\u00a0issues and point to possible\u00a0remedies which can be included in election manifestos.<\/p>\n

In\u00a01963, the Christian Council for Monetary Justice<\/strong> (CCMJ) – http:\/\/www.ccmj.org<\/a> – (in particular see\u00a0http:\/\/www.ccmj.org\/proposals.htm<\/a>) – began its campaign for reform\u00a0of the banking system. Members of CCMJ \u00a0and another group campaigning under the name \u201cProsperity<\/strong>\u201d – http:\/\/prosperityuk.com<\/a> – honed their ideas at a series of residential conferences at Bromsgrove and have continued articulate their concerns to their own members and the public at large of the years. As the situation has worsened\u00a0over the years, other\u00a0organisations have provided similar\u00a0overall analyses and\/or joined them in campaigning\u00a0on particular issues:<\/p>\n

i.e. \u2022 Money being created as DEBT<\/b> by private institutions for their own profit rather than for the good of the people [Forum for Stable Currencies: http:\/\/www.forumforstablecurrencies.org.uk<\/a>\u00a0and Positive Money: http:\/\/positivemoney.org<\/a>] \u2022 USURY<\/b> as in instrument of injustice, and an\u00a0accelerator of economic growth, ultimately giving rise to over-use of the earth\u2019s resources, and global injustice:\u00a0\u00a0see Jubilee Debt Campaign: http:\/\/jubileedebt.org.uk<\/a>, Campaign for Interest-free Money: http:\/\/www.interestfreemoney.org<\/a>, currently being incorporated into the Campaign for Co-operative Socialism: http:\/\/www.co-operativesocialism.org<\/a>\u00a0\u2022 with LAND<\/b> as the key repository of wealth [Coalition for Economic Justice, representing a number of separate campaigns: http:\/\/www.c4ej.com<\/a>]; and \u2022 I<\/b>NEQUALITY<\/b> in ownership and earning power\u00a0 causing increasing social distress [\u201cThe Spirit Level\u201d and The Equality Trust: https:\/\/www.equalitytrust.org.uk\/resources\/the-spirit-level<\/a>]; \u2022 exacerbated by Tax <\/b>Avoidance on the part of\u00a0 some of our overwealthy citizens [Tax Research: http:\/\/www.taxresearch.org.uk\/Blog\/<\/a>] and [Tax Justice Network: http:\/\/www.taxjustice.net<\/a>]<\/p>\n

These issues are closely intertwined, and although each campaigns gives primacy to its own particular concerns, our view is that a set of economic reform proposals needs to draw from all these areas of analysis. \u00a0Policies must cover\u00a0areas which have been identified as key, to be in any way credible, such as Housing, and provision of Health, Education and Employment, and go into sufficient\u00a0detail of how change can be effected in each of these areas. However, the central question is\u00a0what to do about the MONETARY SYSTEM<\/strong> itself, beginning with\u00a0Money Creation as Debt and the problem us Usury, i.e.\u00a0charging of interest.<\/p>\n

Money Creation as Debt:<\/strong> Long done are the days when the crown issued coin as fiat currency, based on gold robbed from ancient colonies, or simply printed and distributed as paper\u00a0notes, recalling the chaos of the hyper-inflation experienced by the Weimar Republic. \u00a0Nevertheless several secular groups advocate such a system, recalling the fact that in wartime, government has in fact issued currency direct: \u00a0e.g. UK Column:\u00a0https:\/\/www.ukcolumn.org\/article\/case-greenback-pound<\/a>, the British Constitution Group:\u00a0http:\/\/www.britishconstitutiongroup.com\/campaign\/bring-back-the-bradbury<\/a>\u00a0and the Reset Group:\u00a0http:\/\/www.thereset.org\/proposals\/bradbury-pound<\/a>. \u00a0A programme of quantitative easing\u00a0following the 2008 collapse, when\u00a0the Treasury authorised money-creation to re-fund the banking sector, but the beneficiaries were the banking fraternity, who had collectively mis-managed the monetary\u00a0system by such manoeuvres as\u00a0funding mortgages to people who could not afford to repay, then floating the debts on the stock-market as \u00a0“collateralized debt obligations”. \u00a0It is not clear\u00a0why the government having saved the banks from collapse, allowed\u00a0everything continued as before, with the culprits continuing\u00a0to receive bonuses of millions – the Cooperative Bank was not immune and suffered its own scandalous collapse some years later in 2013 – https:\/\/next.ft.com\/content\/b8fffd52-f7d1-11e5-803c-d27c7117d132<\/a>.<\/p>\n

The Brexit vote was in some cases, an inarticulate vote of protest against this type of corruption which continues to be endorsed by the government, the only type of reform that seems to have been carried out is a small tightening of regulations concerning banking reserves. With the knowledge that this kind of mechanism has been employed, there has been some talk of “helicopter money” \u00a0but this seems to be an idea for crisis management, and the method of creating money as debt appears to be\u00a0well-entrenched technically as the way to do it. However, \u00a0Positive Money<\/strong>\u00a0– campaigns to remove the power to create money as debt by the bankers and to bring it under the control of a public organisation – see details on\u00a0http:\/\/www.positivemoney.org<\/a>.<\/p>\n

The problem of Usury:<\/strong> \u00a0The work of Margrit Kennedy is a key resource: http:\/\/www.margritkennedy.de<\/a>. \u00a0\u00a0Islamic Finance:<\/strong>\u00a0 sets out to avoid usury by a different model of stake-holder finance:\u00a0http:\/\/www.islamic-finance.com<\/a>]\u00a0and some of its ideas have been incorporated into\u00a0Binary Economics<\/strong> – see http:\/\/www.binaryeconomics.net<\/a>\u00a0 \u2022\u00a0http:\/\/www.globaljusticemovement.net\/home\/binary.htm<\/a> \u00a0\u2022\u00a0http:\/\/www.cesj.org\/learn\/binary-economics\/binary-economics-in-a-nutshell<\/a>. \u00a0Some of these ideas have been picked \u00a0up in proposing stake-holder finance for housing (see below).<\/p>\n

Another model, State-Owned Banking<\/strong>, which is in practice in the state of North Dakota, USA has been endorsed by well-respected economist\u00a0Ellen Brown, who recently presented it at a meeting hosted by the RSA – see \u00a0https:\/\/www.thersa.org\/events\/2016\/02\/why-we-should-own-the-banks<\/a>\u00a0\u2022\u00a0https:\/\/ellenbrown.com\/fixing-the-economy-with-state-owned-banks\/<\/a>\u00a0– in the example she described,\u00a0existing infrastructures\u00a0of smaller banks\u00a0are used as outlets, and the challenge would be how to adapt the model\u00a0to the UK situation, something that it can be argued may be more possible than before, given the Brexit vote. \u00a0In the UK we do have a network of Credit Unions, <\/strong>which are community-owned savings and lending institutions –\u00a0http:\/\/www.abcul.org\/credit-unions\/setting-up-a-credit-union<\/a> \u2022\u00a0http:\/\/www.brighterfuturestogether.co.uk\/brighter-futures-together-toolkit\/create-a-credit-union-for-your-community<\/a>\/ – and there is scope both for supporting them, and enlisting them as outlets for such a proposal. \u00a0In the meantime. \u00a0In the meantime, the nearest model we have to an ethical bank is Triodos: https:\/\/www.triodos.co.uk<\/a>.\u00a0One glimmer of hope for future planning is that the taxpayer owns 70% of share of the Royal Bank of Scotland.<\/p>\n

 <\/p>\n

The huge rise in precarious employment has in recent months caused a number of organisations to coalesce around a campaigns for CITIZENS’ INCOME, now usually referred to as UNIVERSAL BASIC INCOME<\/b> (UBI).\u00a0 Although it\u00a0may at first appear to be unrealistic\u00a0to give everyone \u201csomething for nothing\u201d, on closer examination there are a number of cogent arguments in its favour, ie, (a) predictions of fewer jobs being available due to increasing automation, (b) the current benefits system dis-incentivising people from seeking work, and (c), an abusive (privatised) system of assessment enabling petty bureaucrats to impose arbitrary sanctions, leaving job-seekers without income for weeks at a time, sometimes directly causing homelessness, (d) the positive idea of providing basic security so that they can volunteer in many available schemes for doing good in the community, and mothers who so wish can stay home looking after their children, free of financial pressure.\u00a0Campaign Groups include: Citizens Income Trust:\u00a0http:\/\/citizensincome.org<\/a>\u00a0and Basic Income UK:\u00a0http:\/\/basicincome.org.uk.<\/a><\/p>\n

The left-leaning think-tank, Compass,<\/strong> has commissioned research on UBI and their report costs out several models of UBI: http:\/\/www.compassonline.org.uk\/publications\/universal-basic-income-an-idea-whose-time-has-come\/<\/a>.\u00a0 The general idea is to have continuity from a much-increased child benefit, continuing\u00a0during study and training, right through adulthood and connecting up to old age pensions.\u00a0 The level of income, which would replace the tax-allowance for all workers, is of course crucial, whether\u00a0it’s equivalent to unemployment\u00a0benefit, or amounts \u00a0to a decent \u201cliving wage\u201d. \u00a0UBI would not alter the need for additional disability support, and\/or housing benefit.\u00a0 Being universal, the system would be much cheaper to run than assessed benefits, and although \u201cland reformers\u201d suggest\u00a0supporting it\u00a0by \u00a0“land taxes”, Compass\u2019s figures indicate\u00a0that it could be supported by modest increases in overall taxation, which would of course apply to all employees, with the UBI forming the basis of their income.\u00a0 This proposal is therefore definitely worth considering as a proposal that if properly presented, could gain wide support amongst the electorate.<\/p>\n

 <\/p>\n

H<\/b>OUSING<\/b>: Organisations such as Housing Justice: http:\/\/www.housingjustice.org.uk <\/a>and Shelter: http:\/\/www.shelter.org.uk<\/a> provide emergency help with the enormous upsurge of homelessness. \u00a0However, with\u00a0mortgage-debt accounting for around 80% of money-creation in the UK, housing is a key factor in our economic system, embodying\u00a0the four basic issues identified by CCMJ so long ago, i.e. Debt, Usury, Land and Inequality, and is considered by most people to be the most important challenge for improvement by any government.\u00a0With key workers who cannot afford to live in the centre being forced into the suburbs, putting even more pressure on our transport system; with cash-strapped local authorities being forced to sell off land for development by commercial companies and many of the flats sold off-plan to overseas investors who have no intention of even renting them, just keeping them as an investment to sell on; many\u00a0of the younger generation, even those\u00a0with good jobs, are living in over-crowded shared accommodation or continuing to live in the parental home into their thirties because they\u00a0cannot afford to\u00a0get on the housing ladder. Lack of available housing is also one of the reasons for the rise of xenophobia. Even without\u00a0attempting to alter the basic mechanisms of the economic system, there is considerable scope for practical intervention, for example:
\n(a) If possible, to reverse recent legislation forcing Housing Associations<\/strong> to sell off their properties\u00a0as a discount.
\n(b) Controlled Rents<\/strong>\u00a0should be re-established to cover both public and private sector rentals to ease the pressure on those renting properties.
\n(c) A modest form of Land Value Tax<\/strong> could also be considered, i.e. varying council tax according to the property size, which would incentivise owners\u00a0of under-occuped to take in lodgers.\u00a0Punitive\u00a0rates\u00a0can be imposed on landlords who practice \u201cland-banking\u201d by keeping properties empty, and if necessary, legislation should be enacted to enable local authorities to do this.
\n(d) Legislation can be framed, and generous finance provided, to enable brownfield or fringe agricultural land to be purchased to enable new\u00a0large-scale housing to be provided\u00a0in suitable locations, either Local Authority-owned or via Community Land Trusts<\/strong> and other models of\u00a0<\/strong>Co-Ownership should be encouraged.<\/p>\n

Co-Ownerships<\/strong> can\u00a0exist informally when two or more individuals or couples share accommodation, commune-style, whilst they save up deposits for housing, but in current conditions, even with this arrangement, they may never be able to raise the funds required. \u00a0The idea is that by forming legally watertight partnerships, a group of private investors can come together to fund housing projects either for themselves and\/or for others. \u00a0The current situation is that housing co-operatives,\u00a0having amalgamated into larger commercial organisations, will be\u00a0forced by\u00a0the latest legislation into providing yet another tranche of\u00a0right to buy properties. \u00a0Co-ownerships are envisaged as operating\u00a0on a much smaller\u00a0scale, as stake-holding\u00a0investments rather than an anonymous co-operatives. \u00a0The\u00a0basic\u00a0concept is that two\u00a0groups are in partnership, the investors and the occupiers, and these groups may overlap. \u00a0A key part of the proposal is flexibility, so that occupiers who become able\u00a0to put more funds into the pot than the basic rent can gain a proportional share in the whole project and that should they wish to relocate, their shares can be\u00a0sold on to new partners coming in. \u00a0Such projects can thus\u00a0serve as starter-projects for aspiring home-owners.\u00a0The theory of this area of housing is set out in Open Capital:\u00a0http:\/\/www.opencapital.net<\/a>\u00a0and currently\u00a0http:\/\/co-ownership.org.uk<\/a> points to a page on this website (which may need updating).<\/p>\n

 <\/p>\n

TAX REFORM<\/b> should be used\u00a0to\u00a0raise finance by more progressive taxation of international companies, and abolishing tax havens, to re-establish more funding for the above and for the voluntary sector, including better support of Neighbourhood Planning Forums, Community Centres and Voluntary Organisations, which will be even more important to provide opportunities for the elderly and the unemployed. \u00a0More follows…..<\/p>\n

This paper is being drafted on\u00a0The Map of Economic Reform:\u00a0 https:\/\/www.themap.org.uk<\/a>\u00a0– see\u00a0https:\/\/www.themap.org.uk\/?p=227<\/a><\/b><\/p>\n","protected":false},"excerpt":{"rendered":"

Work in progress, latest update 5\/7\/2016 –\u00a0comments welcomed….. to admin@themap.org.uk This information is being prepared\u00a0for the Leader of the Opposition and\u00a0Shadow Chancellor as requested in face-to-face meetings during recent weeks.\u00a0 In the wake of the unexpected Brexit vote, which may give rise to a leadership challenge, and\/or a mid-term general election,\u00a0the urgency for\u00a0a credible economic […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-227","post","type-post","status-publish","format-standard","hentry","category-background"],"_links":{"self":[{"href":"https:\/\/www.themap.org.uk\/index.php?rest_route=\/wp\/v2\/posts\/227","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.themap.org.uk\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.themap.org.uk\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.themap.org.uk\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.themap.org.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=227"}],"version-history":[{"count":16,"href":"https:\/\/www.themap.org.uk\/index.php?rest_route=\/wp\/v2\/posts\/227\/revisions"}],"predecessor-version":[{"id":251,"href":"https:\/\/www.themap.org.uk\/index.php?rest_route=\/wp\/v2\/posts\/227\/revisions\/251"}],"wp:attachment":[{"href":"https:\/\/www.themap.org.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=227"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.themap.org.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=227"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.themap.org.uk\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=227"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}