Tuesday, 27 March 2012
And So I'm Back, From Outer Space...
I've been away in deepest darkest Scotland for a couple of weeks and have had to watch budgetary developments et al from afar. I was hoping to be able to blog whilst up there but my wi-fi hopes were somewhat dashed when I produced a new fangled 'credit card' to pay for drinks in a pub and received a look as if I had try to pay with babies' limbs and fairy dust. They don't take plastic, the kind barman spat, suggesting those who wished to pay with this new found wizardry were not the sort who were welcome here. So I didn't bother asking for the wi-fi password.
So I find myself in the familiar territory of waterski-ing behind the news.
45p - Good start but a shame Osborne either didn't have the guts or the bargaining power to go the whole hog. And a shame it won't come into effect until next year (though you can see by giving people a year to defer earnings out of 50p towards 45p it should guarantee a bumper first year of 45p revenue thus 'proving' a point in 2014). It doesn't matter that it makes sense financially, it's bad news to go to 45p PR-wise. It will be bad news again PR-wise (though sensible and encouraging of growth and investment) to drop it to 40p, or indeed the Laffer curve's 38p optimum. It would have been better to get this PR out of the way in a oner (like removing a sticking plaster) 3 years before the election and let the real economics of the decision speak for themselves by election time in generated growth. No surprise the media or their political arm in Westminster are painting it as they are. Ignore and move on.
Granny tax - Old people have done fine from the Coalition - let's not get hung up on having a generous benefit reduced until it falls in line with everyone else. Yes there are poor and needy aged members of society, but not in much greater numbers than elsewhere across the spectrum. Conversely they are in general better off than average. Today's pensioners are the baby boomers. They have enjoyed the massive enrichment of the last 40 years, particularly in terms of home values. They rarely have mortgages and other outgoings are smaller with no small children etc. Time to take a bit of 'pain' and realign to the rest of society. Incidentally, nice to see some (thought the minority) understand this in letters pages across the media.
Child benefit - good to see an effort has been made to taper the issue of the cliff edge benefit drop. This deals with the only important problem - that of someone getting a pay rise which results in a net earnings loss after they become disqualified from child benefit. It doesn't, because it is too costly to do so, deal with the almost irrelevant 'problem' of envy. That is that people who earn £60,000 don't like the idea that they get nothing and 2 people earning £40,000 each still do. My advice: suck it up, big lad. I have banged on about what is 'fair' before in taxation etc. I am willing to say categorically than it is not unfair that if you earn £60,000, you don't get child benefit. Yes it would be nice, but the economy isn't built for that luxury. I find it pathetic that people are still complaining. All they are is upset that someone else got a bigger lolly.
Donorgate (which I assume it is already being called) - who gives a shit? Politicians cannot and should not live in bubbles. They are meant to be lobbied by the people they represent. This includes you, me and Richard Branson if he so wishes. Political parties need funding. They get this from people who think this will buy them influence and people who wish them well. Just like many big businesses will want to donate to Tories who are small Government people, Trades Unions will want to donate to Labour who are big Government people.
Why? They feel those parties better represent their interests. The idea is we get to decide if we like the policies people come up with - it's a democracy, we have elections. If we think our politicians are making bad decisions entirely based upon their donors' wishes, vote them out. I have no issue with who comes to tea with Dave - it's the policies he makes I care about. And whilst we're on the subject, perhaps is it a touch hypocritical of Labour to make a fuss over supposed influence of donors to Tories when their party has actual proven influence of donors? Largest donors to Labour? Trades Unions. Who essentially decided who leads the party - the Trades Unions.
That'll do for now.