Monday, July 01, 2013

One rule for the rich, another for the poor

George Monbiot writes “ Last week the chancellor stood up in parliament to announce that benefits for the very poor would be cut yet again. On the same day, in Luxembourg, the British government battled to maintain benefits for the very rich. It won. As a result, some of the richest people in the country will each continue to receive millions of pounds in income support” The more land you own or rent, the more money you receive, is the basis of the EU farm subsidy system. The minister responsible for cutting income support for the poor, Iain Duncan Smith, lives on an estate owned by his wife's family. During the last 10 years it has received €1.5m in income support

 There were two proposals on farm subsidies for limiting handouts to the super-rich, known as capping and degressivity. Capping means that no one should receive more than a certain amount: the proposed limit was €300,000 (£250,000) a year. Degressivity means that beyond a certain point the rate received per hectare begins to fall. This was supposed to have kicked in at €150,000. The UK's environment secretary, at the EU  knocked both proposals down.

When the government says "we must help the farmers", it means "we must help the 0.1%". Most of the land here is owned by exceedingly wealthy people. Some of them are millionaires from elsewhere: sheikhs, oligarchs and mining magnates who own vast estates in this country. Although they might pay no taxes in the UK, they receive millions in farm subsidies. They are the world's most successful benefit tourists. Yet, amid the manufactured terror of immigrants living off British welfare payments, we scarcely hear a word said against them.

Thanks in large part to subsidies, the value of farmland in the UK has tripled in 10 years: it has risen faster than almost any other speculative asset. Farmers are exempted from inheritance tax and capital gains tax. They can build, without planning permission, structures which lesser mortals would be forbidden to erect, boosting both their capital and income. And they have a guaranteed income from the state. Yet all we hear from their leaders in the the National Farmers' Union  is one long whinge. The NFU, dominated by the biggest landowners, has a peculiar genius for bringing out the violins. It pushes forward small, struggling hill farmers. The real beneficiaries of its policies are the arable barons hiding behind them. An uncapped subsidy system damages the interests of small farmers. It reinforces the economies of scale enjoyed by the biggest landlords, helping them to drive the small producers out of business. A fair cap (say of €30,000) would help small farmers compete with the big ones.

Monbiot concludes "The current structure of farm subsidies epitomises the British government's defining project: capitalism for the poor and socialism for the rich." [Of course, it should read  "socialism" but SOYMB gets the gist]

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