Sunday, 19 February 2012

The case for UK childcare reform


As an economic recovery strategy "austerity" is not working. Defenders of the "orthodox neoliberal" response to the ongoing economic crisis often demand to know what the alternatives are to their favoured cut-now think later strategies. In this series I'm going to explore what some of these economic alternatives could be.


Percentage of net family income spent on childcare in 2010.
The UK Labour party has been publicising plans for a Scandinavean inspired childcare system, where those that choose to work have an entitlement to free or affordable childcare. As it is UK childcare costs are absurdly high, the highest in Europe and in the English speaking world too. Labour like to boast about the fact that the Tax Credit system allows families to cover up to 80% of their childcare costs, however to my mind free childcare to working families would probably work out as a much lower burden given the redundancy of the vast redistributionist beurocracy needed to administer Tax Credits.

Anyone who has ever experienced the spectacularly overinflated cost of childcare in the UK should support progressive reform however I still expect to see plenty of people that are delighted to see their fellow citizen take a huge shafting, piling in to the debate to criticise any kind of progressive childcare reform. Not that I have much faith in this corporatised Labour party to deliver anything resembling a well considered, sustainable, economically viable or even sane "progressive childcare strategy.


Imagine the double boost to the economy if costs could just be brought down to match the (still well above average) costs in the United States. A reduction like this would create an average 14% boost in a significant number of UK family budgets helping to massively increase family spending and saving power, stimulating the economy through incresed consumption and deleveraging the financial sector through increased savings deposits.

Sadly it would never be allowed to happen though, with the financial sector, all the major political parties and the vast majority of the mainstream media riddled with self serving, "austerity loving" anarcho-capitalists, who would fight tooth and nail to prevent any measures that could improve the financial autonomy of ordinary working people.
UK childcare needs progressive reform and as pleasing as it is to hear Labour even considering it, the party still need to have more than one "big idea" if they want to win the next election.

Here are a few other "big ideas" for them. 
  • Housing policy reform, regulation of the virtually unregulated Buy-to-Let Housing benefits siphon. Buy-to-Let properties should meet the same standards as social housing, introduce some kind of empty property tax and draw up some ambitious housbuilding plans. Regulation of the housing sector is an absolute must since the origins of the ongoing meltdown of the neoliberal economic model can be clearly traced to over-leveraged property speculation.
  • Tax transparency, introduce a simplified tax system and register of tax transparent companies. Individuals and companies that continue to use loopholes to avoid paying taxation on their profits or executive renumeration to be excluded from bidding for government contracts, recieving government subsidies, financing lobbying activities, standing for election or donating to political parties in the form of contributions or through secondment of staff. Companies that remain tax transparent could be offered tax reimbursments and low interest loans (to encourage developmental reinvestment).
  • Reform of the Financial Sector, the financial sector would feel the effects of a housing market gradually deflating back to a sustainable level and a much tougher tax collection regime however the sector needs to be fundamentally reformed. The unregulated, untaxed shadow banking casino is destabilising the global market. The whims of the market are capable of bringing ruination to entire nations. That London is the very epicentre of a global derivitives market that vastly dwarfs the GDP of the entire World in size is absolutely nothing to be proud of.
  • An alternative to neoliberalism, I have serious doubts that there is anyone near the top of the Labour party capable of devising an alternative strategy, so they need to go back to the previous functional model, the Post War Consensus mixed economy, I mean it wasn't called "the golden age of capitalism" for nothing. They should also at least attempt to educate themselves in the basics of economics (monopolies, oilgopolies, cartels, subsidy handouts, tax avoidance schemes, prohibition inflated black markets, information assymetry and price fixing are never good). next they should seek out economic advisors amongst those that were at least on the ball enough to forsee the neoliberal economic crisis and brave enough to endure the hailstorm of criticism for publicising their ideas (while the majority of their peers were happy getting fat on the biggest speculative bubble in history).
Of course there would be plenty of Buy-to-Let slumlords, tax avoiders, corporate fatcats, professional lobbyists, owners of overinflated property portfolios, bankers, traders, PFI spivs, property speculators, exiled oligarchs and media organisations to campaign vigerously against any ideas that go against the neoliberal "greed-is-good" ideology. However the biggest obstacle to a progressive economic policy for the Labour party to champion is the fact that throughout the Neo-Labour years the party has become riddled with neoliberal corporatists. A hoard of self serving, wealth workshiping, expense fiddling gits, who only ever went into politics for their own self interest. People that show more loyalty to the corporatists promising campaing donations, seconded staff, expensive junkets and a very well paid seat on the board/"advisory role" than they do to either to the electorate that pay their wages or the Trade Unions that still provide the majority of Labour Party funds. As long as these impossibly comprimised individuals are embedded in the upper echelons of the party, Labour will never even consider offering a viable alternative to ideologically driven neoliberal corporatisation of the entire economy.
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