The UK survived the hardships and demands of the last world war for many reasons, prominent amongst which must be the perceived need for everyone to act in the common good.
We endured shortages and strict rationing (rather than permitting a free-for-all grab, or the allocation of scarce resources to those best able to pay for them) because we believed, collectively and generally, that we were “all in this together”. We believed that we were a single community working towards a single common purpose. Indeed, we enacted emergency laws to prohibit what we called profiteering; this included charging more than was deemed appropriate for any commodity, including private rents.
We also took a very dim view of people like Dad’s Army’s Private Walker, i.e. the spivs and the wide boys, who sought to outwit the general consensus of putting the common good before individual ambitions and private gain.
‘All in it together’: WW2 and the post-war consensus
Immediately after the war, the people elected a Labour government whose policies were the most radical and life-changing of possibly any government this country has ever known. They took into public ownership all the utilities, transport and major industries like mining and steelmaking, and of course, they introduced major changes to our education system and the provision of health care. It is worth repeating the core “mission statement” which underpinned the NHS, because of its deeply significant political implications: health care was to be provided freely according to need, paid for out of general taxation which would be levied according to the ability to pay.
This general attitude of cooperative activity prevailed for some years after the war ended; it became known as the ‘post-war consensus’, and so similar were the economic policies of the two major parties, Labour and Conservative, that the word ‘Butskellism’ was coined from the two chancellors of the day, Rab Butler and Hugh Gaitskell. But inevitably, the young people who had fought the war and who had striven to see the nation through the hardships eventually became old, and in their retirement were replaced with new people and new ideas.
The consensus breaks: profit and the rise of the ‘individual’
Two names from the academic, economic, political right stand out: Milton Friedman and Friedrich von Hayek. With them came new philosophies which people struggled to comprehend, known as monetarism and neoliberalism. Alongside the theories, two major politicians joined forces in the early 1980s to put the ideas into practice, namely Ronald Reagan in the USA and Margaret Thatcher in the UK. Neoliberalism sounds as if everyone ought to welcome it; “new freedom” – who could disagree with that? The reality was rather different.
The 40-year post-war consensus still retained vestiges of the Lloyd George government’s attempts in 1917 to forestall similar changes in this country to those taking place in Russia. Following the report from the commons speaker, John Henry Whitley, the idea prevailed that rewards for the efforts of individuals should somehow reflect the value of that effort to the well-being of society at large. Neoliberalism rejected that and instead provided for individuals to take from the common pot whatever market forces permitted them to take, irrespective of worth or value. Thus, we can see, as an extreme example, the possibility that a few young men may now extract from society more reward for one week of kicking a ball into a net as an NHS general practitioner may earn in a lifetime of service.
Shrinking the ‘nanny state’ to make the rich richer
Thatcher herself is quoted as saying that “There is no such thing as society, there is only the individual and the family”. She said similar things in various speeches, but the original occurred in an interview for the Woman’s Own magazine.
Neoliberalism propounded the high-sounding ideals of individuality and self-sufficiency and argued that the state – the ‘nanny state’ – needed to be reduced in order to permit this individuality to flourish. Thus, we have seen four decades of the deliberate reduction of state provision (i.e. spending) in all our services and common activities, and we see every day the devastating consequences of this.
The net effect, then, of 40 years of market free-for-all has been that the income differential between the lowest and the highest paid has increased to levels not seen since the end of the Victorian era. Immediately after the war, the highest paid in our society earned about 30-40 times the lowest paid; we can now add a zero to each of those estimates. During the two crucial years of the recent Covid pandemic, an Oxfam report indicated that the UK acquired a new millionaire or billionaire about every 30 hours, at a time when most workers were fearful for their jobs or facing the reality of reduced incomes.
This free-for-all must end
This clearly unfair way of distributing the wealth of the nation cannot be allowed to continue in the current unregulated, unfettered way. We need to return to a situation in which effort and value are properly rewarded. Unless positive steps are taken to stop the income gap getting ever wider, there will be nothing to prevent our economy from approaching the sort of conditions that applied across Europe in the seventeenth and eighteenth centuries.
In this country, lavish fortunes were committed to the building of what we now regard as our ‘national heritage’, the stately homes, universally constructed by workers on near-starvation wages, while in France, roughly one-third of that country’s gross domestic product was committed to building and maintaining the palace of Versailles. The French solution to the discrepancy was rather more violent that we could contemplate now.
A solution: a new, simplified tax system
But a solution must be found, and the simplest mechanism is to use personal taxation. So, in the second part of this article, a proposal will be described to switch to a new and ostensibly fairer way of levying such taxation. It will seek to sweep away the vast multiplicity of loopholes and means of avoidance that now sustain entire legal and accountancy industries, and will offer instead a single scale for calculating tax liability based on an exponential calculation.
Under the new system, the chancellor will no longer need to balance the multiplicity of rates across the entire spectrum, but will be able, by the means of an annual minuscule tweak to the formula, to impose requirements according to any government’s agreed spending plans.
