Cut benefits? Yes, let’s start with our £85bn corporate welfare handout

Billions of pounds of British public money has gone to business, with Disney getting £170m. They really are taking the Mickey

• 
• • Aditya Chakrabortty
  • The Guardian, Monday 6 October 2014 20.30 BST

‘Politicians and pundits talk about welfare as if it’s solely cash given to people. Hardly ever discussed is corporate welfare.’ Illustration: Daniel Pudles

Last week, as the Tory faithful cheered on George Osborne’s new cuts in benefits for the working-age poor, a little story appeared that blew a big hole in the welfare debate. Tucked away in the Guardian last Wednesday, an article revealed that the British government had since 2007 handed Disney almost £170m to make films here. Last year alone the Californian giant took £50m in tax credits. By way of comparison, in April the government will scrap a £347m crisis fund that provides emergency cash for families on the verge of homelessness or starvation.

Benefits are what we grudgingly hand the poor; the rich are awarded tax breaks. Cut through the euphemisms and the Treasury accounting, however, and you’re left with two forms of welfare. Except that the hundreds given to people sleeping on the street has been deemed unaffordable. Those millions for $150bn Disney, on the other hand, that’s apparently money well spent –whoever coined the phrase “taking the Mickey” must have worked for HM Revenue.

Politicians and pundits talk about welfare as if it’s solely cash given to people. Hardly ever discussed is corporate welfare: the grants and subsidies, the contracts and cut-price loans that government hands over to business. Yet some of our biggest companies and industries operate a business model that depends on them extracting money from the British taxpayer. The operators of our supposedly privatised train services are kept afloat by billions in public money. Or take the firm created by billionaire Jeff Bezos: last year it emerged that Amazon had paid less in corporation tax to the UK than it had received in government grants.

The bill for corporate welfare is huge – and largely hidden. We know a lot about the people who claim social welfare: we know how much each benefit costs the public, the government sets strict rules for eligibility – and we even have detailed estimates for how much cheating goes on. Between them, Whitehall, academia and NGOs have churned out enough surveys on social welfare claimants to fill a wing of the Bodleian library. But corporate welfare? The government has itself acknowledged: “There is no definitive source of data about spending on subsidies to businesses in the UK.” The numbers are scattered across government publications and there is not even any agreement on what counts as a corporate handout.

Instead, what you get on the issue is silence. A very congenial silence for the CBI and other business lobby groups, who can urge ministers to cut benefits for the poor harder and faster, knowing their members are still getting their bungs. An agreeable silence for Osborne and David Cameron, who still argue that the primary problem in Britain is that the public sector “crowds out” private enterprise, without ever acknowledging how much the public subsidises business. Most of all, a silence at the very centre of our democracy.

Kevin Farnsworth, a senior lecturer in social policy at the University of York, has spent the best part of a decade studying corporate welfare – delving through Whitehall spreadsheets and others, and poring over Companies House filings. He’s just produced what is, as far as I know, the first ever comprehensive audit of the British corporate welfare state.

The figures, to be published in a forthcoming report, are astonishing. Farnsworth takes the financial year 2011-12 and tots up the subsidies and grants paid directly to businesses. They amount to over £14bn – that is, almost three times the £5bn paid out that year in income-based jobseeker’s allowance.

Add to that the corporate tax benefits, the value of the cheap credit made available to banks and other business, the insurance schemes run by the government to protect exporters, the marketing for British business laid on by Vince Cable’s ministry, the public procurement from the private sector … Farnsworth calculates that direct corporate welfare costs British taxpayers just shy of £85bn a year.

This, he admits, is a conservative estimate. I would throw in the public subsidy provided to too-big-to-fail banks, or the £25bn taxpayers shelled out that year in tax credits, housing and council tax benefits to people in work but not paid enough by their employers to live on. Nevertheless, Farnsworth has achieved something extraordinary: he has yanked into the open an £85bn subsidy that big business and the government would rather you didn’t know about.

Thinking over this giant corporate bung, two responses immediately suggest themselves. First, it shows up the stupidity of all those newspaper spreads and BBC discussions constantly demanding “What would you cut?”, like some middlebrow ransom note (“Choose now: or the lollipop lady gets it”). It’s a question you’ll be hearing more and more in the run-up to the election. Perhaps next time, as well as mentioning schools, fire services and benefits, some brave Radio 4 presenter will mention the business coaching and marketing and advocacy services provided by the Department for Business (annual cost: nearly £5bn).

The other response you might make is that some business funding is inevitable, even desirable. Perhaps you consider keeping Kenneth Branagh employed in these islands to be a national priority – in which case, roll on those tax reliefs for Disney. I might argue that renewable energy deserves a subsidy. But voters are at least entitled to an informed debate. That is precisely what we’ve not been allowed, through the deliberate obscuring of these sums.

And if taxpayers are to fund corporations, why shouldn’t they demand that those businesses observe certain conditions of basic fairness? The publicly funded train operators should pay their staff living wages, provide decent pensions and sick pay. And all recipients of public money should be banned from using elaborate structures to avoid paying tax.

Our semi-secret system makes no such demands: of the 44 companies that received over £1m in government grants between 2005 and 2011, 13 didn’t pay any corporation tax at all; a further 17 didn’t pay any corporation tax either the year before or the year of receiving their public money. These aren’t two-bit firms, either: Farnsworth’s list includes Tesco Personal Finance, Dell and Plusnet.

And, of course, Amazon – which in 2011 alone took £7.7m from Holyrood for placing a distribution centre in Fife. The Welsh assembly promised it even more: £8.8m, as well as a £3m highway to connect its operations with other road networks. Just finished, it’s called the Ffordd Amazon road, for the avoidance of ambiguity about whose interests it’s meant to serve.

Farnsworth’s research should trigger a public debate about the size and uses of the corporate welfare state. Personally, I’ll believe we’re getting somewhere when Channel 4 puts on Corporate-Benefits Street – with White Dee replaced by Amazon founder and inveterate tax-dodger Jeff Bezos.

Our bullying corporations are the new enemy within

The demands of business dominate our politicians and embed inequality. It’s a full-blown assault on democracy

• 
• • George Monbiot
  • The Guardian, Tuesday 7 October 2014 20.13 BST

The chancellor of the exchequer, George Osborne. Photograph: AFP/Getty Images

The more power you possess, the more insecure you feel. The paranoia of power drives people towards absolutism. But it doesn’t work. Far from curing them of the conviction that they are threatened and beleaguered, greater control breeds greater paranoia.

On Friday, the chancellor of the exchequer, George Osborne, claimed that business is under political attack on a scale it has not faced since the fall of the Berlin Wall. He was speaking at the Institute of Directors, where he was introduced with the claim that “we are in a generational struggle to defend the principles of the free market against people who want to undermine it or strip it away”. A few days before, while introducing Osborne at the Conservative party conference, Digby Jones, former head of the Confederation of British Industry, warned that companies are at risk of being killed by “regulation from ‘big government’” and of drowning “in the mire of anti-business mood music encouraged by vote-seekers”. Where is that government and who are these vote-seekers? They are a figment of his imagination.

Where, with the exception of the Greens and Plaid Cymru – who have four MPs between them – are the political parties calling for greater restraints on corporate power? When David Cameron boasts that he is “rolling out the red carpet” for multinational corporations, “cutting their red tape, cutting their taxes”, promising always to set “the most competitive corporate taxes in the G20: lower than Germany, lower than Japan, lower than the United States”, all Labour can say is “us too”.

Its shadow business secretary, Chuka Umunna, once a fierce campaigner against tax avoidance, accepted a donation by a company which delivers “tailored tax solutions to individuals and organisations internationally”. The shadow chancellor, Ed Balls, cannot open his lips without clamping them around the big business boot. There’s no better illustration of the cross-party corporate consensus than the platform the Tories gave to Jones to voice his paranoia. Jones was ennobled by Tony Blair and appointed as a minister in the Labour government. Now he rolls up at the Conservative conference to applaud Osborne as the man who “did what was right for our country. A personal pat on the back for that.” A pat on the head would have been more appropriate – you can see which way power flows.

The corporate consensus is enforced not only by the lack of political choice, but by an assault on democracy itself. Steered by business lobbyists, the EU and the US are negotiating a Transatlantic Trade and Investment Partnership. This would suppress the ability of governments to put public interest ahead of profit. It could expose Britain to cases like El Salvador’s, where an Australian company is suing the government before a closed tribunal of corporate lawyers for $300m (nearly half the country’s annual budget) in potential profits foregone. Why? Because El Salvador refused permission for a gold mine that would poison people’s drinking water.

Last month the Commons public accounts committee found that the British government has inserted a remarkable clause into contracts with the companies to whom it is handing the probation service (one of the maddest privatisations of all). If a future government seeks to cancel these contracts (Labour has said it will) it would have to pay the companies the money they would otherwise have made over the next 10 years. Yes, 10 years. The penalty would amount to between £300m and £400m.

Windfalls like this are everywhere: think of the billion pounds the government threw into the air when it sold Royal Mail, or the massive state subsidies quietly being channelled to the private train companies. When Cameron told the Conservative party conference “there’s no reward without effort; no wealth without work; no success without sacrifice”, he was talking cobblers. Thanks to his policies, shareholders and corporate executives become stupendously rich by sitting in the current with their mouths open.

Ours is a toll-booth economy, unchallenged by any major party, in which companies which have captured essential public services – water, energy, trains – charge extraordinary fees we have no choice but to pay. If there is a “generational struggle to defend the principles of the free market”, it’s a struggle against the corporations, which have replaced the market with a state-endorsed oligarchy.

It’s because of the power of corporations that the minimum wage remains so low, while executives cream off millions. It’s because of this power that most people in poverty are in work, and the state must pay billions to supplement their appalling wages. It’s because of this power that, in the midst of a crisis so severe that the world has lost over 50% of its vertebrate wildlife in just 40 years, the government is organising a bonfire of environmental protection. It’s because of this power that instead of innovative taxation (such as a financial transactions tax and land value taxation) we have permanent austerity for the poor. It’s because of this power that billions are still pumped into tax havens. It’s because of this power that Britain is becoming a tax haven in its own right.

And still they want more. Through a lobbying industry and a political funding system, successive governments have failed to reform, corporations select and buy and bully the political class to prevent effective challenge to their hegemony. Any politician brave enough to stand up to them is relentlessly hounded by the corporate media. Corporations are the enemy within.

So it’s depressing to see charities falling over themselves to assure Osborne that they are not, as he alleged last week, putting the counter view to the “business argument”.“We don’t recognise the divide he draws between the concerns of businesses and charities,” says Oxfam. People “should be celebrating not denigrating the relationship between business and charities”, says the National Council for Voluntary Organisations. These are good groups, doing good work. But if, in the face of a full-spectrum assault by corporate power on everything they exist to defend, they cannot stand up and name the problem, you have to wonder what they are for.

There’s a generational struggle taking place all right: a struggle over what remains of our democracy. It’s time we joined it.

Never mind eternal youth - adulthood is a subversive ideal

Empirical evidence confirms what honest introspection suggests: most people are happier after reaching middle age

• 
• • Susan Neiman
  • The Guardian, Sunday 5 October 2014 16.45 BST

‘There is reason to suspect those who tell the young to savour the best years of their lives.’ Photograph: Liv Friis-Larsen /Alamy

Where did we get the idea that youth is the best time of your life? Having failed to create societies that our young want to grow into, we idealise the stages of youth. Growing up has come to be viewed as a matter of renouncing your hopes and dreams, accepting the limits of the reality you’ve been given, and resigning yourself to a life that will be more boring and less significant than you supposed when you began it. Increasingly, grownups appear not merely sad but pathetic.

Consider the difference between JM Barrie’s Peter Pan and Steven Spielberg’s reworking for the movie Hook. Barrie’s grownups are dull but menacing, occasionally wistful; Spielberg’s grownups are ridiculous, not only ill-equipped for the adventures of Neverland but barely fit to live at all. Given the lack of compelling role models of adults in western media, it’s no wonder that Peter Pan is seen as a figure of rebellion, or that a great writer’s fondest wish for his newborn is that the child may stay for ever young.

Outside of fairy tales, no one remains a child for ever. For this reason the time of life most often idealised is the decade between 18 and 28, when young men’s muscles and young women’s skin are at their most blooming. Yet few people who are in or past that decade would choose to repeat it. For most of us, it’s a time of doubt and fear – that every decision is irrevocably fateful, that everyone else is more confident and capable, and above all that we aren’t sufficiently enjoying what we’re told is the best time of our lives.

Empirical evidence confirms what honest introspection knows: most people are happier after reaching middle age. Though there are variations in the global low point – the Swiss reach it at 35, while Ukrainians don’t hit rock bottom until 62 – all report becoming steadily happier after that. Researchers controlled all of the obvious factors, such as income, employment and family status, and found they didn’t matter: from the US to Zimbabwe, the evidence that life is not a downhill path is constant.

What explains the consensus on something so clearly false? An answer can be found where we might least expect it, in the work of Immanuel Kant. His famous essay What is Enlightenment? describes humankind’s exit from its self-imposed immaturity. Growing up isn’t bad, but isn’t easy. Laziness and fear lead us to acquiesce: it’s much easier to let others think for us.

Growing up, like enlightenment, is as much a matter of courage as of knowledge. Kant’s call to have the courage to use your own reason is well known, but few have heeded the warning that comes after it: no government has an interest in cultivating adults. It is far simpler to care for distracted consumers than to satisfy the demands of self-confident citizens.

So most of us spend our working lives making or marketing products developed to divert us. The things that capture our attention are never depicted as toys but as tools that are crucial for being adult. Bewildered by the choice when purchasing a smartphone, we easily forget how many decisions are out of our hands. Or did you choose to live in a world where oil companies can wreck the planet, governments spend more on weapons than on education, and children starve every minute for want of food others throw away?

Grownups take on questions that determine real lives, knowing they will never succeed entirely but refusing to succumb to dogma or despair. Both are surely tempting, and successfully resisting them is key to growing up. Not permanent youth but genuine adulthood is a subversive ideal.

There is reason to suspect those who tell the young to savour the best years of their lives. The tone is cheery, but the message is ominous: everything else will get worse. Thus young people are prepared to expect – and to demand – very little.

No conspiracy theories are necessary: we often collude in our own infantilisation, as we often join in with the curious derision that greets the news that an ageing rock star has reached a round-numbered birthday or opened a concert or gone on tour. Isn’t it time these people accepted their obsolescence and left the stage to others?

This sort of disdain and mockery is all the more puzzling since the recent concerts of Bob Dylan, Bruce Springsteen and Leonard Cohen were anything but laughable. Among others, these artists have shown how far and for how long human and creative development can continue, surviving flops and falls and excess and error – thus providing some models of growing up for which we can be grateful.

Cricket - Playing spin well is a state of mind

A batsman should look to dominate, and importantly, not fear the turning delivery

Ian Chappell

October 5, 2014

VVS Laxman was an artist at hitting the legspinner wide of mid-on, against the spin © AFP

I was bemused by Justin Langer's mystifying recent explanation of how Australian batsmen struggle with spin bowling on the subcontinent. "It's almost like Indians have chillies from a very early age, therefore if you eat chilli it doesn't really bother you," Langer said. "But if we eat chilli, it burns our mouth, which is the same while playing spin."

I acquired a taste for spicy food at 19 but learned to play spin bowling from about eight. I retain my enjoyment of spicy food to this day and those lessons I was taught as a youngster stood me in good stead as my career progressed, culminating in a few months at finishing school - a tour of India.

To me, it is at a young age that the real problem lies with modern Australian batsmen, and it is here that the roots of their disconnect with playing good spin bowling lie: the coaches overlook the correct footwork fundamentals.

The first things I was told about playing spin bowling were among the most important:

1) Don't worry about the wicketkeeper when you leave your crease, because if you do it means you are thinking about missing the ball.

2) You might as well be stumped by three yards rather than three inches.

To make a real difference to a spin bowler's length you have to advance a decent distance, whilst coming out of your crease only a little generally improves the delivery.

I remember asking Shane Warne after Australia's 2001 tour of India, where VVS Laxman tamed the legspinner: "How do you think you bowled?"

"I don't think I bowled that badly," was his response.

"You didn't," I assured him, "it's just that when Laxman advances three metres and hits you through mid-on and then the next delivery is a little higher and shorter and he's quickly on the back foot and pulls the ball, it's excellent footwork, not bad bowling."

	If you can walk and chew gum at the same time, then you can eat spicy food and also play spin bowling. The trick is to acquire a taste for the former and be taught the latter correctly at a young age

During that series, Laxman used his feet better than anyone I have seen to hit the ball against the spin through wide mid-on; it was exhilarating stuff.

However, you don't have to leave the crease to be successful at playing good spin bowling. Two of the best batsmen I've seen, Garfield Sobers and Graeme Pollock, both played mostly from the crease, but importantly their footwork was decisive and they weren't fooled in judging length.

Australian batsmen haven't always struggled against good spin bowling. Neil Harvey was acknowledged as a twinkle-toed batsman who was never out stumped in his Test career, and the dashing Doug Walters is the best player of offspin bowling I have seen. There were many others in that period who were extremely efficient when it came to playing good spin.

Playing spin bowling well is a state of mind. To succeed, a batsman has to be decisive, look to dominate, have a plan and not fear the turning delivery. Once I learned on the 1969 tour of India that because of the slower nature of the pitches you had a fraction more time than you first thought, and that when the ball turned a long way it provided opportunities for the batsman as well as the bowler, I never again worried about prodigious spin. I was often dismissed but I never again feared the turning ball; I looked upon it as a challenge to be enjoyed.

If you can walk and chew gum at the same time, then you can eat spicy food and also play spin bowling. The trick is to acquire a taste for the former and be taught the latter correctly at a young age.