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Opinion

This is a government by the rich, for the rich – and its wealth won’t be trickling over to Wales

23 Sep 2022 4 minute read
Prime Minister Liz Truss. Picture by Stefan Rousseau / PA Wire

Ifan Morgan Jones

There is a saying in Welsh, ‘i’r pant y rhed y dŵr’ – the water flows into the dell.

Essentially this means ‘the rich get richer’.

Whoever came up with this saying understood the reality of so-called ‘trickle down’ economics.

In reality, money doesn’t trickle down, it trickles up. It’s the rich who have the gravitational mass and that’s why it’s up to the state to reverse the laws of capitalist physics and pump some of that money back down to the poorest.

Chancellor Kwasi Kwarteng’s ‘fiscal event’ today is a budget for the rich, by the rich.

The higher rate of income tax for the very richest earning £150,000+ has been abolished. So too has a cap on bankers’ bonuses, while a rise in corporation tax has been axed.

Meanwhile, the Chancellor has announced new restrictions on welfare for those working part-time, and a clamp down on the rights of trade unions to strike for better pay.

The UK is already one of the most unequal nation-states in the world and this budget seems clearly designed to entrench that inequality deeper still.

But we also have to remember that financial inequality in the UK is also regional inequality within the UK.

The UK includes the richest part of western Europe – London – and also its poorest – the west of Wales and the valleys.

Only 0.3% of people in Wales will benefit from abolishing the additional highest rate of tax. That’s 4,300 people out of a population of 3.2 million.

Meanwhile, the other 3.195 million will now have to contend with another bout of austerity as the UK Government will have less to spend on public services.

The cut in stamp duty will also artificially inflate house prices yet further, making it harder for the poorest to live in their own communities. All this in the middle of a cost-of-living crisis.

Rebuke

In July of just last year the previous Prime Minister, Boris Johnson, made a speech saying that “for too many people, geography turns out to be destiny”.

He said that GDP in Wales was lower than in the former East Germany, which only reunited with the rest of Germany in 1990.

This was a result of former leaders investing too heavily in London and the South East to the detriment of other parts of the country, he admitted.

Of course, Boris Johnson never actually did anything about this. Levelling up as a slogan ultimately achieved nothing but provide cover for a plan to recentralise funding power from the devolved governments to Whitehall under the guise of the ‘Levelling Up Fund’.

But at least there was a quasi-recognition that there was a problem there that needed to be tackled.

That has gone now. Prime Minister Liz Truss simply does not recognise inequality as an issue as Boris Johnson did in that speech.

Speaking to the BBC, she said: “To look at everything through the lens of redistribution, I believe, is wrong. Because what I am about is growing the economy, and growing the economy benefits everybody.

“This is a really important point. The economic debate for the past 20 years has been dominated by discussions about redistribution. And what has happened is, we have had relatively low growth, and that has been holding our country back.”

But this is simply incorrect. To begin with, there is no correlation between nations having more redistributive policies and a lack of growth. None at all.

Secondly, if you cut taxes for the mega-rich while cutting welfare for the poorest, you’re not benefitting everybody. You’re making the rich richer and the poor poorer.

The UK’s own inequality is a rebuke to the very idea that a rising tide lifts all boats. In Wales’ case, a geyser of wealth from the SE of England has left us battered and forgotten on the rocks.

As John Burn-Murdoch of the Financial Times described the UK: “Essentially, [we] are poor societies with some very rich people.”

Liz Truss may well eke out some growth out of her new policies. But whose growth?

It won’t be trickling down to the people of Wales. I’r pant y rhed y dŵr.


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Frank
Frank
7 days ago

“pant” nid “plant”

Frank
Frank
6 days ago
Reply to  Frank

The error has now been corrected by the author.

Mab Meirion
Mab Meirion
7 days ago

The wide open mouth reminds me that first she pumped sewage into our waterways and seas and now she pollutes every other part of our lives…

Benjiman Angwin
Benjiman Angwin
7 days ago

This anti-market, anti-aspiration budget does naught for small to medium business owners, start-ups and workers with side-hustles trying to break free of having to work a day job.

Steve Duggan
Steve Duggan
7 days ago

This budget proves that the poverty in Cymru will remain and get worse if we stay in the Union. Independence won’t be easy but we can’t go on like this. Within the UK only deeper poverty awaits our chlldren.

Last edited 7 days ago by Steve Duggan
I Humphrys
I Humphrys
7 days ago
Reply to  Steve Duggan

Agree, brand loyalty in our case means to our Welsh Gov. The people of Cymru demand “Market Insistence”, meaning they have seen Mark Drakeford and our Gov. do what’s best for Cymru, and want more. That means the Gov. must now deliver Independence.

Windy
Windy
7 days ago

Come the revolution

Kerry Davies
Kerry Davies
7 days ago
Reply to  Windy

The first thing fascists usually do is get the police onside. These income tax cuts do not benefit even Chief Constables. Don’t joke about revolution on the day all imported food became 5% more expensive.

Glen
Glen
7 days ago

So the way out of the cost of living crisis is to make the super rich even wealthier?
All those working class and middle income idiots that voted for Boris ‘to get Brexit done’ must be feeling pleased with themselves today.

Y Cymro
Y Cymro
7 days ago

This budget is an English one. Anything trickling will the the bilious contempt shown towards Wales and Welsh devolution.

David Smith
David Smith
7 days ago

If I had no ties here I’d move to a more evenly distributed country like Denmark or Germany and leave this turd of a state behind. They seem to be far better by any metric you can care to name.

Crwtyddol
Crwtyddol
7 days ago

For Wales now, read Irish Republic pre 1917
and look at them now

Crwtyddol
Crwtyddol
7 days ago

I like to think this is the start of the demise of the Tory Party as it is now, and it will have to reinvent itself over a period of time.

John
6 days ago

I seriously can’t believe that anyone still believes in trickle down economics. Say it again ” the rich get richer”. They know how to look after themselves.

Frank
Frank
5 days ago

Please sir, can I have some more? MORE, MORE!!

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