Is the Autumn Statement “just”? A Theonomic perspective
Added about 9 years ago by Peter Sills
A guest blog post by Peter Sills, editor of Theonomics.
The Chancellor of the Exchequer, George Osborne, delivered his Autumn Statement yesterday. Peter Sills asks whether the measures announced promote justice and solidarity, two of the key messages in Theonomics: Reconnecting Economics with Virtue and Integrity.
The changes to stamp duty were designed to hit the headlines, and they did! Coupled with the previous announcements of major infrastructure projects, this bit of news contrived to provide something of a feel-good factor in dire economic times, and to mask the news that government borrowing has increased, not decreased, and that we face many more years of austerity. Overall, is the Chancellor’s Autumn Statement something that we can feel good about?
It all depends on the criteria used to make a judgement. A recent book, Theonomics, which I co-edited, offers a basic framework for economic activity drawn from Christian social teaching. One part of our framework is justice, another is solidarity. Judged according to these tests there is not much to feel good about.
The justice of an economic system, from a Christian perspective, depends on the position of the poorest and not on the general level of prosperity. The rather arbitrary charging bands of the old stamp duty system bore unfairly on those of modest means, and replacing them with a more graduated system is clearly more just. But shrinking the state to pre-1939 levels of provision (which is what the projected cuts will do) will lead to levels of hardship and social strife that are profoundly unjust and vicious.
Solidarity means that we are all in it together. The Bible has no doctrine of strict social equality, but it does insist that wealth, even relative wealth, brings with it an obligation to be generous towards the poor – an obligation that goes well beyond charitable giving. There is already speculation that the next government, whatever its hue, will have to raise taxes if the hardship inevitable in reducing the public sector is to be avoided. VAT, we are told, will rise. But VAT, as a percentage of income, affects rich and poor unequally; the only fair tax is income tax. Its about time we had a sensible debate about tax.
The proposals to take a fair measure of tax from the banks and from multinationals who export their profits are steps in the right direction. Justice and solidarity require that corporate earnings are taxed where they are earned, but it remains to be seen whether the new levy will actually achieve this. Alongside this justice and solidarity require effective action to reduce gross differentials in pay, and outlaw unfair work practices like zero-hours contracts. Paying people decently and giving them job security, increases their sense of belonging (we are all in this together), and also increases the tax yield – thus helping to reduce the deficit.
Reducing the deficit is important, but so are justice and solidarity. They are not served by partial measures that catch the headlines but which don’t tell the whole story. As one commentator said, alongside the financial deficit, we also have a candour deficit.
Theonomics: Reconnecting Economics with Virtue and Integrity, edited by Andrew Lightbown and Peter Sills, is available from Sacristy Press.
Please note: Sacristy Press does not necessarily share or endorse the views of the guest contributors to this blog.