These rough notes were prepared by me for an informal address to a gathering of British and German trade union leaders, hosted by the TUC and by the German Social Democrat think-tank, the Friederich Ebert Stiftung. The address took place just as Britain’s General Election of 2019 was launched.
There have been three big issues in the news here in the UK lately:
The first is Labour’s proposal for nationalising part of BT and making broadband free at the point of use.
Having been a world leader in fibre optics, in 1990 Thatcher decided that BT’s roll-out of fibre networks was ‘anti-competitive.’ Factories were closed down and contracts awarded instead to American companies to build copper cables (which will now be dug up) instead.
As many pointed out at the time, digital infrastructure is a natural monopoly that depends on economies of scale. Delivering it through competing providers makes absolutely no sense. The cost of the government’s free market fundamentalism has been high – the UK has the fourth worst coverage in Europe with only 8% full-fibre compared with (for example) 75% in Spain. In that time, BT has paid out £54bn in dividends to shareholders, which would cover the capital costs for a nationwide fibre network twice over
The second is Data mining and monetising
Rana Foroohar, Financial Times, 17 November, 2019: Our personal data needs protecting from Big Tech “Data mining and monetising has long been the core business model for platform technology companies; it is the reason that, according to McKinsey Global Institute, roughly 80 per cent of the world’s corporate wealth now resides in just 10 per cent of companies, many of them in Silicon Valley. But surveillance capitalism is increasingly the business model for every firm, in every industry.
Should we be allowing companies of any sort to collect and monetise data in sensitive areas such as health, financial information, employment and so on? Given the monopoly power, privacy breaches and threats to our political system that have resulted from mass data collection, it is a question worth asking.
Brazil, Russia, India, China and South Africa are home to 3.2 billion people, 42% of the world’s population. In effect, these countries hold 42% of one of the most valuable resources on the planet: personal data.
Over recent years, digital colonizers launched a true scramble for data, rushing to offer “free” services, designed to be as addictive as possible, to drill as much data as they can out of entire populations that are increasingly seen as potential data wells.
The research my colleagues and I have been conducting at the CyberBRICS Project shows that BRICS countries are increasingly considering data privacy regulations and other digital policies as a tool to curb the power of foreign technology companies and reassert their sovereignty.
The third is Corporation Tax.
The UK has the lowest corporate income tax rate with the exception of two outliers: Ireland and Hungary which are quite a few percentage points below every other country.
By comparison, Britain has rate of 20 per cent, which is set to fall to 17 per cent by 2020.
The UK’s company tax has been steadily chopped from 28 per cent in 2010 under former Chancellor George Osborne.
Belgium, France and Italy have among the highest tax rates at 33.99, 33.3 and 31.4 per cent respectively.
Germany’s corporation tax rate is set at 29.72 per cent, while Spain and Portugal levy it at 25 and 21 per cent respectively. Eastern European countries typically have lower rates, varying from between 10 and 22 per cent.
In conclusion some words on the need for economic policy-making to be subject to democratic accountability – . to quote John Maynard Keynes: .”…. whilst we intend to prevent inflation at home, we will not accept deflation at the dictate of influences from outside. In other words, we abjure the instruments of Bank rate and credit contraction operating through the increase of unemployment as a means of forcing our domestic economy into line with external factors …(23 May 1944, CW XXVI, p.16)