A Personal Response To The UK Budget Of 2012
What I'm writing about here amounts to my perception of the situation as a regular bloke who's main sources of information are the media and the internet, but then perceptions are pretty important in politics, perceptions win and lose elections!
I did listen to the budget speech live and to the opposition's response. I didn't record it, but I did try to make some notes and I'll try to be as accurate as possible. My initial reaction was that it will do something for deficit reduction as one would expect from the Tories. Ed Miliband came of age in his robust and effective rebuttal of the budget but Prime Minister – well not yet and probably thank goodness for that.
I'll look at some of the key points in a moment, but what about the background and the context. It seemed to me growing up, that the Tories put money in the bank and then Labour got in and spent it on worthwhile things and then the Tories got back in and replenished the coffers and it kind of worked.
Then we got the era of three term governments and the Tories became sleazy and corrupt and thought that because everyone was scared of what Labour would do with the economy, that they'd never be ousted. Then came Blair and Brown. I was worried they'd wreck the economy, but of course it didn't happen and we all felt better – for a while.
At the last election Brown claimed the current economical turmoil was not his fault and it's a worldwide phenomenon. It is, but whoever said Gordon Brown is the man who didn't fix the roof when the sun was shining, was on to something. Some countries are dealing better with the credit crunch come recession than others and Britain could have been so much better off. The man who promised an end to boom and bust must have spent more money than any other politician in history, certainly in UK history.
They got in with a promise of no tax increase and they had a surplus. They spent the surplus and without increasing income tax brought in a range of stealth taxes, they spent those too and it wasn't enough so they sold the nation's gold and spent that too, but they wanted to spend more so they ran up a deficit and having spent that they then said it's not their fault everything's gone pear shaped. Well they may not be directly responsible for sub prime mortgages in the USA, but they certainly could have kept the economy in better shaipe against crises that inevitably occur from time to time.
We need a credible opposition to keep the Tories on their toes, so well done Ed, but trust you with the economy – I think not. Cameron promised Compassionate Conservatism – patronising to say the least, but the budget doesn't deliver that. Clegg and Cable are punching above their weight given the election result, but then that was skewed by labour party boundary moves to rig everything in their favour – what a mess.
Our politicians are incapable of working together for the common good of all the people. It's all about vested self interest and politicking. In my view the goal of the budget should be to put the economy back on track in a fair and equitable way and that's how it should be judged.
The biggest headline making measure was reducing the 50p 'emergency' rate of top line tax which put about £40,000 per year back in the pockets of some 14,000 millionaires. Fair – arguably not, did the tax make a big contribution to the economy, not really, was it a true 'emergency' measure, probably more for PR and propaganda value when introduced. Is it an issue? No not really, it's a storm in a teacup that allows Ed Miliband to claim it shows the Torie's true character. If that character is the party of low taxation then I'm all for that, within limits.
The budget totally failed to be radical. They raised the personal allowance to a little under £10,000 with the full £10k as a target. Earn £10,000 before you start paying tax – I should certainly think so. Actually it should be more. Who in the UK can house themselves, clothe themselves, feed themselves, heat their home and pay their local taxes, let alone have a life on £10,000 per year? Rhetorical question of course, and so we waste more money giving support to those on low incomes by giving back money to them that we took from them in tax. When I say waste money I refer to the pointless bureaucracy involved in taking with one hand and giving with the other.
No one in the UK knows how much they are taxed either you get taxed when you earn, taxed when you spend (and at different rates for different things), you get taxed when you save and taxed when you die. It's not transparent and it's not equal and not even the best accountant in the world could work out what any individual actually contributes. Such a system does allow politicians to make claims and counter claims and better brains than mine argue about the true cost of the budget to individuals and families in this income bracket and that.
I won't witter on forever here's my quick ready reckoner on other good and bad measures, given a truly radical re-think isn't going to come out of this lot and given my stated belief that the goal should be to sort the economy and be fair to all. Excluding the major headline issues discussed in detail above:
Corporation tax down – winner necessary for an entrepreneurial economy.
Increased fuel duty – loser, adds to the cost of everything we buy, bad for business, bad for jobs, bad, bad, bad even if it wasn't already ridiculously high and hits the worst off the most.
Pensions – good and bad - from all I've read I think pensioners will be very slightly better off in the short term – but probably not for long, sneaky.
Should have done more to help students – they are the future.
Child allowance – a bodge for political motivations.
Help for the UK film industry – good, but tiny issue in the great scheme of things.
Measures to combat tax avoidance a whole subject to deal with another time.
In a nutshell deficit control? Yes slowly. Fair? No. Common sense? Largely no. Would the other lot do better? Laughable. Will we ever get common sense and fairness in this country? I hope so, but not holding my breath.