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Letters: Alternatives to the age of austerity

Jonathan Freedland (There was no Labour U-turn, but not many are listening, 21 January) argues Labour is forced to support the cuts because there will be no money to reverse them in 2015 after Osborne has wrecked the economy. He is wrong: there is money available now, and will be even more in 2015.

What has been left out of the equation in all the public debate about the cuts over the last 18 months is the enormous ballooning of wealth of the ultra-rich. The Sunday Times Rich List published last May found that the 1,000 richest persons in Britain got richer by £77.3bn in the year to 2010 and then by another £60.2bn in the year to 2011. Nor was this just a freak jackpot. In 1997 the richest 1,000 had assets of £99bn; by 2011 they had grown to £396bn. Capital gains tax at 28% on the increase in the value of these assets over this period would raise £83bn, enough to pay off two-thirds of the deficit.

Why is a wealth tax a taboo subject when it has never been more justified? Or a super-tax on excess gains, exactly as Labour rightly imposed a levy on the super-profits of the utilities in 1997? Either of these options would allow the VAT increase to be repealed, which would significantly ease pressure on the poorest households and begin to generate growth by raising demand, and there would still be enough increased revenues left over to fund the creation of half a million jobs in much-needed house-building, infrastructure improvement, and laying the foundations for the green economy.

Too many people have resignedly accepted austerity for years ahead because they believe there is no alternative. But actually there is.
Michael Meacher MP
Labour, Oldham West and Royton

• When Jonathan Freedland tells us that “Labour will have no money to splash around reversing cuts or lowering taxes”, we have, indeed, swallowed more coalition economics than is good for us. It is a fallacy to assert that a sovereign government, with its own currency and its own central bank, is ever short of money. How do we think major wars were financed? If a Labour government is returned in 2015 with a programme for restoring output and employment it will have no difficulty in finding the money. It will have not only the usual flow of saving by the public, but also the Bank of England with its infinite powers to create money through “quantitative easing”.

The U-turn, apparent or real, is a foolish ploy. Labour needs to stop pandering to public prejudice, and become the party of full employment.
Michael Kennedy
Former economic adviser at the Treasury and British embassy, Washington

• Placing Tristram Hunt’s article (Socialism belongs here, 21 January) alongside Jonathan Freedland’s made for fascinating reading. Surely if the Labour party leadership were willing to acknowledge that “socialism belongs here”, they would be listened to more sympathetically by would-be Labour supporters. For instance, the gap between the highest- and lowest-paid in the public sector is enormous, and had Ed Balls indicated that those on below-average wages would be exempt from the 1% pay freeze, his arguments might have had a better reception. However dated some aspects of Marxism may seem to be, the mantra “from each according to his ability to each according to his need” surely has particular resonance in the current economic climate.
Carol Anthony
Quarndon, Derbyshire

• Polly Toynbee (Comment, 20 January) claims Labour has “lost the Keynesian argument” and is therefore correct to support Tory cuts. The inconvenient truth remains that the Labour leadership never reached out and interacted with grassroots activists, trade unionists, students, the Occupy movement and other civic groups formulating an attractive alternative policy prescription to Tory (and now Labour) austerity. Unfortunately, they seem unable to escape the Westminster bubble and the cuts philosophy of its chattering classes. Moreover, Labour should know that what is morally wrong is never politically right.
Enrico Tortolano
Kingston upon Thames, Surrey

• Mulberry (expensive gear for the rich) booms; Peacocks (inexpensive gear for the less well-off) busts. Says it all really!
Chrys Henning
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