Tendring Topics.......on Line
Standing back…….and starting again!
Everyone,
I feel sure, is familiar with the story of the London police officer who, asked the best way
to get to a destination on the other side of the capital, replied, ‘Well, if I wanted to get there I wouldn’t
start from here!’ I think that
neither the government, nor the main opposition, know how best to reach the
country’s destination (a growing economy and a major reduction of the gap
between national income and national expenditure) because their policies are
based on false assumptions. They need to
stop tweaking at this or that detail, stop drawing attention to their
opponents’ mistakes, and take a fresh look at the problem.
What,
for instance, is the point in the Queen’s speech to Parliament about supporting
hard working families, when we know perfectly well that thousands of people,
particularly young people, would desperately like to be hard at work. Thanks
largely to the government’s policies, they are jobless and unable to find work
to do? What is the point of
congratulating oneself on having taken thousands of people ‘out of income tax liability altogether’ when there are thousands
of others who would love to have incomes large enough to be liable for income
tax? What is the point of assuring us
that ‘we’re all in this together’ when
we know perfectly well that the government’s policies are impoverishing most of
the population while permitting a very wealthy minority to get even wealthier?
You
may feel that our economy presents problems of such complexity that their
solution is beyond the capacity of us ordinary mortals and is best left for the
country’s most brilliant financial brains to solve. Perhaps, but it was the best financial brains in the country that
got us into this mess – and it could be that it is common sense and natural justice that will get us out of it*.
It doesn’t take a financial wizard to realize that there are two possible ways
of reducing the gap between national income and expenditure; by cutting back on
national expenditure or by increasing national income by means of taxation – or
perhaps by a judicious mixture of both.
At the same time there is a desperate need to encourage the growth of
the economy; to get the builders, the manufacturers and the retailers busy and
productive again. We need to reduce the
number of unemployed, get people working again, off benefit (not by penalising
them but by removing their need) and paying taxes again.
The Government seems to believe that cutting
back on national expenditure, cutting public services rather than increased
taxation, is the answer. Expansion of
the private sector will, they think, compensate for inevitable job losses in
the public sector. No-one will miss all
those bureaucrats who will lose their ‘well-paid
jobs and gold-plated pensions’. But
‘bureaucrats’ are only a small minority of public service employees. These include doctors, nurses, other health
workers, police officers, fire fighters, prison staff, teachers, university
professors and scientists.
Nor
was it ever likely that the ‘private sector’ would provide work for those
losing their jobs in the public service.
A substantial section of the ‘private sector’ depends for its livelihood
on public service contracts. Cutting
public service expenditure means cutting back on those contracts too. Building contractors, building and maintaining
schools, hospitals and other public buildings are particularly hard hit.
Public
service cuts increase the number of unemployed who no longer contribute to the
Treasury through taxation, and who become eligible for job seekers’ allowance
and other state benefits. Their poverty means that they reduce their
expenditure, hitting the retail businesses that had relied on their custom. Their
lack of work adds to rather than reduces the gap between national expenditure
and national income! Meanwhile
reduction of public services mean badly maintained highways, badly policed
localities, an increase in crime rates, in vandalism and other antisocial
behaviour, the evolution of what once were well-run council housing estates
into unredeemable slums, and the gradual deterioration of the civilised environment
in which the private sector is able to flourish.
Where the government has increased taxes to help to narrow the deficit they have
concentrated on indirect taxation –
increased VAT and increased duty on petrol, alcohol and tobacco. These penalise the less-well-off
disproportionately and deal yet another blow to hard-pressed retailers!
I
think that we need to stand back, survey the situation – and then start again.
To get the economy going I would suggest cutting the rate of VAT and cutting
the duty on petrol and diesel oil. I no longer drive but the price of fuel oil,
used for both long and short haul transport, affects the price of everything in
the shops and of virtually every human activity. VAT is similar. It is much more to the point to raise the
income of poor and middle-class folk than to benefit the very wealthy. We won’t use any increase in disposable
income to buy a yacht, or a Premier League football club, or a palatial home on
the shores of the Mediterranean . We’ll use it to for shopping expeditions into
the High Street, for maintenance to keep the family car on the road, or for
giving our homes a fresh coat of paint.
Thus will the wheels of industry and commerce again begin to turn.
I
think too that taxation should play a much bigger part in reducing that deficit
– but it should be fair taxation, based on no other factor than
ability to pay. I don’t believe it was a
great achievement for the recent budget to have raised the lower limit of
income tax liability to ‘take thousands
of people out of the system altogether’
I
believe, on the contrary, that everyone with an income however small should
repay a proportion of that income in tax.
Then everyone in the country would be able to claim a stake in the
country’s common wealth. Everyone, from the lowest to the very highest,
should be required to pay that same proportion
of his or her income. The proportion
would vary from year to year, according to the country’s needs. For the very poor that proportion would be a
very small sum indeed, for the very wealthy it would be a large sum – but for
no-one would it be a sum beyond his or
her ability to pay.
There
should be no loopholes for tax
avoidance or tax evasion. That
proportionate income tax would be the first call on everyone’s income. Paying it should be a matter of duty and a
matter of pride. What the taxpayer did
with the remainder of his or her income would be up to them – give some of it
to charity, put it in an offshore account, buy a football club – it would all
be nothing to do with the rest of us.
But we all, multi-millionaire, farm labourer, refuse-collector would be
able to claim. ‘This is my country – and every
year I renew my claim on its ownership when I pay my income tax!’
It won’t
happen. Human selfishness and human
greed, from which few of us can claim to be wholly free, will make sure of
that. Still – a very old man can surely
be allowed to dream!
*I have just heard on the news
(11.5.2012) that the financial experts employed by one of the USA
The Enormity of the Problem!
A
week or two ago I mentioned in this blog that The Times ‘Rich List’, then just published, made it clear that
while most of us have become poorer in the past year, the seriously wealthy
have become even wealthier. I mentioned
it again above – but I hadn’t really appreciated the scale of the problem until
I was referred to a blog of Michael Meacher MP that I wholeheartedly commend to
readers. You can find it as I did by
means of a somewhat complex link: http://www.michaelmeacher.info/weblog/2012/04/britains-1000-richest-persons-made-gains-of-155bn-in-last-3-years/ or you can type ‘Michael Meacher MP’ into
Google and you’ll quickly find it there.
However
It definitely comes into the category of ‘things I wish I had written’ and I am
sure that Mr Meacher won’t mind my quoting this particular blog in its entirety
below:
Times Rich List,
published today and compulsory reading for anybody who wants to understand
Britain UK have increased their wealth by so much in the
last 3 years – £155bn – that they themselves alone could pay off the entire UK
The third is that
despite the biggest slump for nearly a century, the slowest and most anaemic
recovery, and prolonged austerity stretching to a decade or more, this
ultra-rich clique are now sitting on wealth even greater than what they had
amassed at the height of the boom just before the crash. Their
combined wealth is now estimated at more than £414bn, equivalent to more than a
third of Britain
Despite these massive
repositories of wealth, these are some of the very people to whom Osborne
gifted £3bn in his recent budget by cutting the 50p tax rate. That
measure alone gave 40,000 UK millionaires an extra average £14,000 a week, at
the same time as those on very low incomes in receipt of working tax credits
who couldn’t find an employer to increase their hours of work from 16 to 24
a week were being deprived in the same budget of £77 a week, around a third of
their income, through their tax credits being withdrawn.
In 1997 the wealth of
the richest 1,000 amounted to £99bn. The increase in their wealth
over the last 15 years has therefore been £315bn. If this increase
in wealth were subject to capital gains tax at the current 28% rate, it would
yield £88bn, and that alone would pay off more than 70% of the total budget
deficit. However Osborne seems to share the notorious view of the New York
Thanks Mr Meacher. There’s really nothing I could possibly add
to that.
‘With LOL (lots of love) from…….
Somehow that doesn’t seem quite
the way in which we expect our Prime Minister to end text messages to the head
in the UK
of an international media organisation with its headquarters in a foreign
country, even if that head is a highly intelligent, very astute and very
personable business woman.
Nor do we
really expect present and past prime
ministers and other leading politicians to bid fond and regretful farewells to
that same lady when, as a result of a phone hacking scandal, she gives up her
job.
Everything
that we are hearing at the Leveson Enquiry confirms my recently expressed
opinion that Rupert Murdoch and his entourage have never bothered to seek
favours from our top politicians. They
just sat back and waited for our politicians to come seeking their favour. And when they lose that favour, as Prime
Minister Gordon Brown did, how very cross and petulant (according to Rebekah
Brooks) they become!
How
demeaning! How shaming! We’re told in the Scriptures that it profits a man nothing to gain the whole world if, in doing so, he loses his
soul. But to lose it for the sake of a
few favourable headlines in The Sun - really!
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