Week 40 2014

 Tendring Topics…….on line

‘Though cowards flinch and traitors sneer, we’ll keep the red flag……

          …….tucked away safely out of sight’.   That seems to be the message of Ed Balls, Labour’s shadow chancellor, at the Labour Party Conference.  Mr Balls appears to be determined to demonstrate that he’ll behave ‘responsibly’ with public money if Labour wins next year’s General Election.  He proposes to do this by emulating the policies of George Osborne with just one or two differences.  He is just as obsessed with reducing ‘the deficit’ as Mr Osborne and just as determined ‘to reduce government expenditure to do so’. 

 No, the government expenditure he has in mind is not the £100 billion pounds ring-fenced for those totally useless and vastly expensive Trident submarines pointlessly patrolling the high seas.  He is going to freeze increases in children’s allowances and, to prove that he really is the friend of working people, he’s going to remove the entitlement to winter fuel allowance of the wealthiest pensioners, reinstate the tiny tax increase on the incomes of the very highest earners, and impose a ‘mansion tax’ on the owners of stately homes valued in excess of £2 million!  Oh yes – he’s also going to pursue those who avoid paying their due amount of income tax; but (while they’re out of office) they all say that don’t they?

 Both Labour, and the Greens (with whom I agree about most things), seem determined to tax the wealthy simply because that’s what they are.  The Green Party promises that in the unlikely event of their forming a government they’ll impose a special ‘wealth tax’ to relieve the wealthy of some of their fortune.  Everybody also seems to imagine that by raising the tax threshold of liability for income tax and taking increasing numbers of low-paid workers ‘out of the tax system altogether’, they are doing the poor a service. Raising that tax threshold helps all income taxpayers.  The only folk it doesn’t help are those whose income is so little that they are already outside the income tax system. Freeing more people from income tax liability reinforces the myth that there’s a large tax-free underclass supported by hard-working tax payers!  In fact every one of us pays taxes in VAT or customs duties virtually every time we buy goods or services, especially when we buy tobacco, alcohol, or petrol, and every time we buy lottery tickets. That’s one of the reasons why I have never bought a lottery ticket or scratch card!    People not liable to pay income tax, may pay a larger proportion of their income through these indirect taxes, than do some income tax payers.

 I believe that income tax should be regarded by every adult as his or her annual membership fee for the very considerable privilege of being a citizen of the United Kingdom. It should be paid by the very wealthiest and the very poorest.  What’s more, paying that subscription should impose exactly the same burden on each one of us.  This could be achieved by making it an equal percentage of every adult’s gross income (before any of it can be salted away in ‘charitable trusts’ or overseas investments).   I reckon that a tax (membership fee) of 20 percent of every adult’s gross income would probably meet virtually all the government’s financial needs.   The actual percentage could be calculated each year.

Obviously 20 percent of a billionaire’s income would be a considerable sum while 20 percent of the minimum wage or the job-seekers’ allowance would be very little.   That minimum wage or allowance would need to be raised, to enable even the poorest of us to pay the ‘membership subscription’ without being reduced to starvation or homelessness.  Then everyone, rich and poor alike, would have a stake in our country’s future and get rid of the myth that hard-working tax payers support an ‘idle poor’. ‘The rich man in his castle and the poor man at his gate’ would be making an equal sacrifice.

Basing taxation on a percentage of total income may seem revolutionary but there’s nothing really original about it.  The Church at one time demanded ‘a tithe’ (one tenth, or 10 percent) of everyone’s gross income. That was quite reasonable in an age when the Church provided many of the services (education, relief of the poor and so on) that are now considered the responsibility of the State. In the public services negotiated pay increases are always a percentage of the existing salary.  Thus, the Chief Executive and the junior clerk get the same percentage salary increase though, in pounds and pence, the former gets many times more than the latter!  

Percentage taxation isn’t going to happen overnight or even in my lifetime; probably not in my sons’ or my grandchildren’s lifetimes either.  There’s one obvious measure that could be introduced here and now to reduce that deficit without causing hardship to anyone. It would also, at a stroke, reduce the anomaly of the wealthy receiving benefits that they don’t need, without the need to submit claimants to always-hated ‘means testing’. 

This would be to make all state ‘benefits’ taxable.  Our state retirement pension is added to any other income we may have and is subject to income tax.  Why on earth should other benefits be tax-free?  Other benefits that could be made taxable include winter fuel allowance, free tv licences, social security payments, attendance allowance  (I receive that because of my poor and deteriorating mobility), children’s allowances and so on.

Even with our present income tax system it would be much fairer to both poor and wealthy than at present.  Those whose total income, even with the benefit, came to less than the threshold of the lower tax rate would continue to pay no income tax.  They would be unaffected by benefit becoming taxable.  Those of us who are better off would pay according to our income but no one would have to pay more than the appropriate rate on their taxable income.  Income tax never resulted, nor ever can result, in either starvation or homelessness – no-one has to pay more than he or she can afford to pay. Of course, it would be much fairer if the threshold for the highest rate of income tax were to be lowered or if, as I have suggested, everyone paid income tax as a percentage of their gross income.

But that, at present, no political party is prepared to endorse.

‘The tongue is an unruly member’

Says St James in his New Testament Epistle.  I certainly agree with that. It has been my over-active tongue that has got me into trouble in the past.  There was the time when I was Tendring Council’s public relations officer and I told the Chairman of the Council that……………..  No I won’t reveal the extent of my idiocy, and it was a long time ago!  Their tongues have brought embarrassment to people much more important than me.   Only last week they did so to both the Prime Minister and the leader of the opposition. I think that the Prime Minister really should have known better.  

On the occasion of a meeting of business men and women in New York, he was overheard remarking to a former mayor of that city that H.M. the Queen had ‘purred’ when he had phoned her with the result of the Scottish referendum, and that she had shown great relief at the fact that Scotland would not separate from the remainder of the UK.  One of the reasons why the British monarchy has survived among a sea of republics is that the Sovereign, as head of state, never expresses a political opinion.  She is the confidante of Prime Ministers and can advise them in the light of her much greater experience of the national scene – but the content of any conversation with her Prime Minister, of whatever political persuasion, is never revealed by her and should never be revealed by the Prime Minister.

It is true that the Prime Minister’s gaffe was part of a private conversation and never intended to become known by the general public. However, its content should never have been revealed to anyone, certainly not to a foreign politician.

Ed Miliband’s tongue’s failure was one of omission rather than commission. He gave a stirring ‘leader’s speech’ to the faithful gathered together at the Labour Party’s annual conference – the last such conference there’ll be before next year’s general election.  It was a speech all the more effective for the fact that he made it without notes. 

Now I’ve done quite a lot of public speaking (on much less important issues and to far smaller audiences) in my time and I have always tried to speak without notes.  There’s no doubt at all that it is the very best way to connect to, and hold, one’s audience.  Sadly, on my way home I’d often think ‘that went down well but – oh dear, I forgot to make this, that or the other point that was of particular importance’

I reckon that Ed Miliband must have been having very similar thoughts – possibly even before the applause had died away.   If there’s one thing that the public feel the Conservatives do better than their Labour opponents it’s managing the economy, in particular reducing that deficit – the gap between government expenditure and government income.  If there’s one issue that accounts for UKIP’s meteoric rise in public popularity it’s their strong opposition to overseas immigrants ‘pouring into this country, taking our jobs and bankrupting our public services’.   I think it likely that the Labour Party has policies on both these issues – but sadly Ed Miliband, perhaps carried away by his own rhetoric – had temporarily forgotten all about them.  They didn’t get a mention!

Ed Miliband’s error was surely much less culpable than that of David Cameron – but I think it likely that it will do him and his party more long-term harm.