Well, thank goodness that’s over.
In the unlikely event of my ever having dictatorial powers I would take the highly illiberal step of banning media outlets bearing the title of “News” (that is, NEW events that have actually happened) from filling their pages, airwaves or whatever with what might happen rather that what actually has happened.
Yet for the past three months – three months - we have been bombarded with speculation about what might be in the budget (a very overblown event in the UK’s political calendar, anyway,) every possibility put forward as a probability, and endless discussion of the likely consequences.
Well, now we know. There will be 48 hours or so of biased and opinionated pronouncements on who will gain a few coppers and who will pay a few bob more, and then we shall all forget about it.
How many of us remember the details of the last Tory, Jeremy Hunt, budget? (The Liz Truss one is an exception to prove the rule!)
In a previous post (see1st October) I reported my response to a Labour Party questionnaire as to what would be my top priorities. They were (and still are)
1.Remove the two child limit on Universal Credit
2. Amply fund Local Government
3. Set up a commission to devise a fairer taxation system, shifting the emphasis from “goods” to “bads.”
Well, 1 and 3 don’t get a mention, nor is there anything else remotely fundamental and long term.
Essentially all we have are some modest tweaks on existing taxes and spending, overall moving in the right direction -the Tax Take increased but still only around the OECD average, and more spending on such as the NHS, our crumbling schools and defence.
But not enough, and not much else.
Here are some “off the cuff” comments on some of the details.
Freezing of the income tax thresholds until 2028: bad, punishes the low paid and befits the already well-off most.
Capital Gains Tax increases: good, but still not up to the rates for earned income.
Inheritance tax threshold: should be replaced with a tax on recipients.
Evasion of IHT by buying farmland: reduced but should be made impossible.
Employers’ NI contributions increased by 1.2 %ge points: bad, this is a tax on employment, which is a “good.”
Fuel duty
freeze and 5p cut retained: bad. Labour cowardice, especially when compared with the increase on the bus-fare cap from £2 to £3 - ie 50%!
Canned beer taxes up, draught beer down: good, helps the hospitality industry.
HS2 funded to Euston. Really, I think we should stop digging in this hole. Would it make a picturesque canal?
Minimum wage up: good.
Pensions up 4.1%: good. It’s alleged to be tax free, but it isn’t. Those of us with additional pensions get them taxed more.
Carers’ allowances up: good, but not by enough.
£500m more for affordable housing: good, but peanuts for what is required.
Keir Starmer promised change, and we are getting it via a minor change of course.
What Britain needs is something transformational, and it is not in this Budget.
The only silver lining of the fiscal drag Queen's budget is that it confirms that this is gong to be a one-term government. With high taxes almost calculated to destroy the economy, an inability to stand up to the unions, and unless they put the kibosh on Ed Milliband's madcap schemes a very real possibility of electricity rationing in the second half of the Parliament, we're basically heading towards a 1979-style election in 2029, where — provided the Conservatives can put together a credible programme for real radical change by slimming down the state and cutting regulations — a tired and browbeaten electorate will throw those who have made them worse off out of office with great force.
ReplyDeleteAs of yet it's a faint silver lining, though, and I'm sure they will do a lot of damage before they can be stopped.
Set up a commission to devise a fairer taxation system, shifting the emphasis from “goods” to “bads.”
You keep writing this but I don't understand how it's supposed to work. Surely the point of taxing 'bads' is to try to discourage people from doing them. But if you succeed and discourage people form doing them, then you don't make any money off the tax. So then you have to tax 'goods' to make up the money you have lost because people stopped doing the 'bads' because they were taxed.
The actual aim of taxation isn't 'goods' or 'bads', it's simply (as the man said) the art of plucking the goose so as to extract the greatest amount of feathers with the least amount of hissing.
It must be nearing the season of goodwill: I agree with both your points, though not necessarily for all the reasons you state
ReplyDeleteLabour is in serious danger of being a “one term” government unless it can change its tone. We’ve heard enough of the dire situation the Tories left behind after 14 years of raping and pillaging the state. We need is more of “the vision thing” – the “good society” we can achieve when all are pulling together to create it.
You are right that taxing “bads” (pollution, unnecessary depletion of resources, exploitation of human weakness, etc) might eliminate them. What a wonderful world that would be. When it happens we must devise a method by which we all contribute “each according to his or her means.” Utopia.
We’ve heard enough of the dire situation the Tories left behind after 14 years of raping and pillaging the state. We need is more of “the vision thing” – the “good society” we can achieve when all are pulling together to create it.
DeleteThat won’t help. People are fed up of ‘just a couple of years of hard choices and then things will get better’ — they’ve been being told that since 2008. Labour don’t need to talk about the country getting better, they need to actually do it. However all their policies will make the country worse.
What they are discovering is that the Conservatives didn’t spend 14 years ‘raping and pillaging the state’. What the Conservatives did was spend 14 years not being honest with the electorate that the state can’t provide everything for you, and take care of you, and make your life good. And if it tries it will fail and drag the rest of the economy down with it.
But I think people might be just about ready to hear the truth: that we need a smaller state which does less; which provides a basic safety net for those who fall on hard times, rather than trying to give everyone a good life, and otherwise get out of peoples way so they can make their own way in life.
Which is why I think the 2029 election might be like 1979 — a Labour Party embodying an obviously-busted big-state consensus replaced by a Conservative Party that will trim the state, allow people to take responsibility for the successes and failures they make of their own life without blaming the state or expecting it to mollycoddle them; and as a result unleashing a dynamic and growing economy.
Let’s hope, anyway.
Your proposal, as spelled out in your third paragraph, has been tried for 14 years and has been a miserable failure.
ReplyDeleteYour proposal, as spelled out in your third paragraph, has been tried for 14 years
DeleteNo, it hasn’t. Precisely none of what I suggested has been tried for the last 14 years.