Contrast two stories in today’s papers: the European Commission telling Ireland that it should recover all of £11 billion from the Apple corporation for unpaid taxes and a heartening piece by Aditya Chakrabortty in the Guardian about a food bank in run-down Birkenhead which has proved an inspiration for the local community.
Do we all inhabit the same world? You could argue that a small portion of the taxes forced out of arrogant companies who regard their shareholders as their first obligation might just trickle down to the frequenters of food banks, but they’d only be crumbs from the rich man’s table.
The belief of those who have a large wad that they both deserve it and should keep it is epitomised by the egregious chancellor in Lady Thatcher’s Wink:
Warbytton caught Lambert Probus, the chancellor of the exchequer, as they left a crisis campaign meeting. The word ‘passion’ still rang in his ears with the sonority of the Lutine bell marking the loss of a ship at sea.
‘A couple of minutes, Bertie, if you can spare them,’ he said. ‘I’m a little perplexed about money matters.’
‘Aren’t we all, Sturge? We have to pretend not to be. How can I help?’
‘It’s the rather hefty divide between the people at the top and those at the bottom. I’d like to be able to give a sensible answer to that.’
‘Got a difficult constituent, have you? It’s hard to fob them off sometimes.’
‘She is pretty unshakeable. The pay gap and all that.’
‘The first thing to note, Sturge, is that we don’t say “pay gap” any more. That’s a bit charged, don’t you think? I mean, with a bit of imagination you can almost see the thing. We changed that some while ago to “achievement differentials”, until people began to realise it meant the same thing. Now we say “accruement variables”. I’ll let you know when it becomes something else.’
‘But high pay, low taxes . . .’
‘Right, a quick lesson, Sturge. Just put yourself in the position of a director on the board of some financial institution who has the fate of all sorts of investors in his hands. In fact he’s probably on several boards at once, so you can imagine that he’s a vital cog in the national economy.’
‘Although he doesn’t make anything.’
‘He makes profits, Sturge, don’t you see. And now imagine that we came along and said we were going to put a cap on his pay and bonuses or increase his taxes. What would he do then?’
‘Work a bit harder so that he could keep up his standard of living?’
‘The very opposite. It’s human nature. Incentives! If we make life harder for him he’ll simply not think it worth his while to sweat on the company’s behalf. He may even catch the next flight out to New York or Hong Kong. That’s why we’ve put everyone on a single band of tax.’
‘I see. And those at the bottom? The workers rather than the shirkers, I mean. Don’t they want more money, too?’
‘Of course they do, but that would be a disaster. Just put yourself in the position of someone who stacks shelves or fusses over old people in a care home. What would happen if you gave her a pay rise or cut her taxes?’
‘She’d be inspired to work even harder?’
‘Come, come Sturge. It’s human nature. All she really wants to do is sit on the sofa watching TV while nibbling something horribly fattening. Incentives! Give her too much and she’ll decide she doesn’t need to lift a finger. Keep her pay low and she has to sweat all hours to get what she needs. The precious dignity of labour! That’s how the economy thrives.’
‘So everyone’s happy.’
‘The people who matter are happy.’