Spending priorities for the UK

Recently I posted a blog here which purported to be a leaked version  of George Osborne's upcoming Autumn Statement.  This was a spoof but some people took it more seriously.  Perhaps that's because it is the sort of thing that Osborne should be saying?

The United Kingdom now has a national debt in excess of £1.4 Trillion.  I am not even sure I know how many zeros that represents but I do know it's a lot.

Britain is now paying more than £55Bn a year in interest on its debt.  That's more than we spend on defence!

I was thinking about this and watching a news clip that was showing Bono and Sir Bob Geldorf talking about aid for Africa and so on and Bono commented that Britain was one of the few countries that actually lived-up to its international aid commitments.  I was proud, for a moment, then the news moved on.

I have been thinking about that moment, for a while and no longer feel proud.  I feel ashamed.  Ashamed that Britain is impoverishing its own people and future generations to provide aid to other nations.

That's right, Britain is borrowing money so that it can give the borrowed money to other countries to feed their hungry and homeless, while the hungry and homeless in Britain continue to be hungry and homeless.  The lunatics have truly taken over the asylum.

Any spending by government on aid has to start from the premise that charity begins at home.  In what parallel universe can it make an iota of sense that Britain borrows money to give to others?

Probably in the same parallel universe where it makes some kind of sense to be involved in the 2014 version of the arms race.  Instead of building dreadnoughts, the race is about NHS funding.  The Conservatives are trying to out-Labour, Labour on the NHS by ring-fencing spending.  They absolutely know that the NHS is a black hole that could, almost as soon as tomorrow, swallow the whole UK GDP and still need more money.  They know that the second biggest problem with the NHS is actually PFI.  The NHS, under the last Labour government, borrowed massively to build new hospitals and offices for their army of managers and executives.  Now they are spending money that should be spent on front-line health-care provision, funding this spending splurge.

Again, the UK government is borrowing money and impoverishing our people and our children and our  children's children, to fund this.

The deficit isn't coming down and neither is debt.

It is bad enough that politicians don't have the courage to do the right thing - to tell the people of Britain, what the people already know - that we are 'broke', 'skint' 'borasic' call it what you will - and we must cut back spending in order to survive and that these cuts will have to be severe.

We cannot afford a high welfare bill, while also funding local spending, so 'welfare' has to be 'earned'.

We cannot simply borrow to fund overseas aid  - our first priority must be charity spending in the UK or rather not spending what we don't have.

We cannot police the world - we cannot afford it.  If certain nations want us to fight or bomb  ISIS and other terror organisations then those nations must fully fund such actions.  Same goes for the fight against Ebola.  In the extreme we are an island and have a natural barrier to the spread of foreign sourced contagious diseases, so why must Britain be at the forefront of spending its money - money which it has to borrow - to put troops and resources into Africa?

We cannot afford the European Union.  The funding of this  un-elected and highly inefficient bureaucracy is simply unacceptable.  Remember these are the same people, who, when the individual countries of Europe were implementing various levels of domestic austerity, these Eurocrats put forward a budget calling for them to have increased funding from member states.  That act, displaying such a dis-connection from the real world should be enough to cause Britain to distance itself from such madness.  Instead, Britain must borrow money to fund such lunacy.

We borrow, borrow, borrow.

We borrow to fund International Aid, to fund military adventures overseas, to fund a European monster that needs constant feeding, to fund international banks and lending institutions that suck funds from the NHS before a drug is bought or a nurse or doctor is paid and to fund an over-generous welfare system (that treats those who have never paid a penny into the 'system' the same as or better than those that have).

The spending priorities for the UK desperately need to change.

So here is a challenge for politicians.  Stand-up and be counted.  Stand-up and justify why the UK must continue to borrow money to send to countries that can afford their own space programme and yet has its own people depending on the charity of others through food banks.  I have nothing against food banks, by the way, I think they are an excellent way for us to show that we care for our fellow citizens and I see these as a great benefit in terms of the voluntary nature of the wealth redistribution and also of the spirit of compassion and humanity to our fellow countrymen.  I struggle though to understand why my children and grandchildren must suffer so that others can drive around in 4x4s doing 'good' in faraway places!

Any politicians out there, ready to take-up the challenge?  Self health tip - I am not holding my breath!

Public Sector strikes

If you are of a socialist persuasion, please look away now.  This will likely seem hurtful.

In fact if you are of a Conservative ministerial persuasion, also look away, as you probably won't like this, either!

I have posted here before about public sector strikes  http://bit.ly/1jj5yCz and here about the tube strikes http://bit.ly/1oMwA4o but essentially the problem comes down to two things.

Firstly, 'pilgrims'.  I have written before, here http://bit.ly/XHPGin  and here http://bit.ly/1qQ7e7y about these.  For those that don't know, a 'pilgrim' is a union official that essentially works full time on union business while employed (and paid)  by a public sector organisation.  This costs the taxpayer, twice.  First to pay for the union organiser and second to pay someone else to do the job that he/she was actually hired to do!  The cost to the taxpayer is estimated to run into the 100's of £millions level.  That is money that could be used to reduce taxes for working people - people like those that struggled to get to work yesterday, because of the public sector strikes.  Money that could repair potholes, or provide adequate care for the UK's elderly - but please, after Mid Staffs, not in the caring or their version of the word, NHS - or money that could reduce the debt burden that the country has.

Just as importantly, if action is taken on pilgrims, then the public sector workplace might actually become a place of work!  Somewhere where the class warriors of the union movement have to actually do some work rather than sit around agitating for change and salary increases.

So, Angus Maude, George Osborne and David Cameron - Action Please!  This shouldn't require an act of parliament - there was none passed to get these parasites into place.  What is needed is clear guidelines sent to all ministers and Permanent Secretaries that this practise must cease forthwith and, no later than August 31, all such posts to have been abolished.

Yes the unions will howl.  So will their paid lobbyists - Labour MPs - but here's something for Angus, George and David to consider, my money is on you never being able to get their votes, anyway!  So be like Nike.  Just do it!

Re-reading the above, I realise I have just wasted 15 minutes of my life!  Maybe I have the makings of a pilgrim or union official myself!  Why wasted?  Because Conservative politicians simply won't tackle this issue.  Just like they won't tackle the high salaries paid in the public sector nor the cosseted pension schemes that public sector workers enjoy.   

Face it, we have Conservative politicians - certainly the leadership - that do not follow Conservative policies or pay only the flimsiest of lip-service to same.  In the USA, people have a term for those Republicans that act in a similar fashion.  They call them RINOs - Republicans in Name Only.  What can we call such British Conservatives?  Polite answers only, please!

Opinion polls regularly show that the people of Britain 'get it'!  They understand that, as a country, we have been living beyond our means, for years.  They know that change will be painful.  They know too, that taxing the 'rich', ever higher amounts won't be sufficient, in the long run.  The cause of the government debt problem isn't on the revenue side.  It is on the spending side.  Deep cuts need to be made in welfare, health and local government spending.  Let me repeat that - deep cuts.  And these cuts MUST be on personnel levels.  These cuts need to be made to the bureaucracy not to the front line - so in health, tear out layers (plural) of management not nurses or doctors, -  in education, remove all of those local officials, yes all, provide direct funding to the school governing body at an agreed figure - let's call it £5,000 per pupil per year and then let the headmasters/mistresses and the school governors decide how to utilise those funds - in local government abolish planning departments, abolish community outreach departments in fact abolish and abolish.  Just leave local government with a few basic tasks - repairing local roads, administering social housing (until this can all be sold-off), collecting household waste and, no that's it.  Just those basic tasks.  These wouldn't require a bloated and over-paid bureaucracy.

This isn't about bashing the unions.  Seeing them with a significant reduction in membership (they mostly represent public sector employee) would be a happy by-product.  Seeing them having to use their own funds to pay for these pilgrims is a scandal that must be righted, immediately.

This though, is about having the courage to do what Britain so desperately needs - a strong government doing what is right for today's and tomorrow's Britons.  Not sure that the Conservatives have the stomach for it so it will probably need to wait for the inevitable financial crunch to happen.  Then we can blame outside forces and the 'gnomes of Zurich' and the Euro and all the rest - anyone but our spineless politicians and the rest of the elite, not forgetting of course, the biggest culprits - ourselves for letting this happen!.


 

Conservatives - The way forward

In recent posts, I have bemoaned the current policies followed by the current Conservative leadership.   Saying frankly, that these policies are not conservative at all.  It's easy to snipe from the sidelines and just be critical without offering an alternative so, I won't do that.  Here is my brand of conservatism.

Taxes
Unsurprisingly, I am for low taxes.  I was tempted to say no taxes but that probably isn't realistic.  Also since I believe that taxes are too high and that taxes start too early, I am in favour of radically altering the tax free allowance.  The Conservatives should commit to raising the point at which a person pays tax, to £20,000, within the course of the next parliament.   At a stroke, if I can use that phrase, this would take many low paid people out of the tax net completely.  This would also sweeten the pot for those moving from welfare dependency into paid employment (see below). 

National Insurance Contributions (NIC) are a tax by another name.  It is time to end the farce of the separation and just roll this into Income Tax.  Since this would then be part of general taxation, the low paid (see above) would again benefit.

Tax thresholds are too low.  The rate at which the higher band comes in, £31,865 is simply to early  This catches far too many people in the higher rate bracket.  Raise this immediately, to £35,000, which would mean £1,200 in the pockets of the 'squeezed middle' each year and then to £40,000 over the life of the next parliament, letting people keep another £2,000 of their money (based on the current 40% rate).

Having said that, I want to reduce the benefit of this tax cut (maybe I could be an MP, with such bare-faced cheek!).  I want to reduce the value by reducing the higher rate from 40% to 35%, immediately.  Then to 30% over the course of the next parliament.

Oh, and these reduced rates would include the effect of adding in NIC to Income Tax!  So the top rate of tax, inclusive of NIC, would soon be 30%

Higher rate tax - abolish it completely.  It is just for political posturing.

Inheritance Tax - abolish it completely - why should something that has already been taxed, be taxed again?

Capital Gains Tax - a flat rate 15% on gains and no tax free allowances. 

Corporation tax - drop this to 15% over the course of the next parliament.  However, change the rules on allowances for Inter-company payments, which serve to dramatically reduce a company's taxable income and sends money to overseas tax havens.  Limit such deductions to 10% of turnover.  We might lose a Starbucks or similar companies but I think that a company like Amazon or Apple will still want to remain with UK operations!

Fuel Taxes - Tell the 'greenies' to walk-off somewhere.  If I can use a four letter word!  Same to those urban dwellers that have good good established mass transport infrastructures.  Then cut duties by 10% immediately rising to 20% over the life of the next parliament.

Please read the above again.  Why would the average voter not be attracted by such a policy platform?  The overwhelming beneficiaries are the lower paid and the so called 'squeezed middle'  - they would get to keep more of their money.

You are probably not yet convinced because you are thinking , 'yes that's all well and good but how do we pay for it?'

We look to Hollywood for our inspiration.  Hollywood, or Elstree, if you want to be small-minded and nationalistic, are not usually happy places for conservatives.  These are hot-beds of liberal luvvies who, having made a pile of money by acting, then feel obligated to foist there warped viewpoints of a subsidized world where 'make-believe' is real, upon us all.  But I digress!

Hollywood is familiar with adaptations, so we, Conservatives, take a leaf from their book.

'Honey I shrunk the government!'   Okay, so it isn't very catchy and does need some work but let's keep this as a working title for now.

Civil Service Pay
Studies regularly show that this is around 8% higher than for those in the private sector.  This is 'justified' on the grounds that people in the civil service are more highly 'qualified' than those in the private sector.  Okay, so leave aside, for the moment, any thoughts about, if they are so much smarter, how come we are in this mess?'  That won't be productive.

Instead, an across the board cut of 8% for all.  Further, for those earning more than three times the national average wage of £25,000, a cut of 15%, across the board.  These cuts to apply at both the national and local levels of government.  No doubt this will cause some of these high-flying and (earning) civil servants to seek positions elsewhere but that can only be to the betterment of the real economy as those super-brains get re-deployed into the productive business arena - so win-win!

Limit sick-day absences to the private sector average.  Currently, public sector 'sickies' are more than 60% higher than in the private sector.  So, taking civil servants out of the public sector and into the private sector could also see reductions in NHS needs as these ex-civil servants move to the healthier private sector environment - win-win again!  

Departmental Cuts
Only one sacred cow - Defence.  The current level maintained but we rein back on overseas entanglements. 

All other departments, cut by 5% a year, for each year of the next parliament.  That is 5% from their 2013 budget out-turn.  Government must become smaller.

Over and above these reductions, abolish the Department for Energy and Climate Change and the Department for Culture, Music and Sports.  Similarly, do away with the Welsh Office and the Scottish Office.  Also abolish the Office of the Deputy Prime Minister!

International Aid
Reduce the budget by 50%, immediately.  Require that the remainder is only spent on British produced goods.

Then onto local government.  What do people really want from their local councils?  I would suggest refuse collections (weekly, if you please) and roads that don't have potholes every 100 yards!  Social services - not really - it's not as if they do a good job at it anyway!  Libraries?  How many people actually visit them nowadays?  We live in an digital age, when people want a book, they get it on a Kindle.  When they need reference information, they data-mine the internet.  Schools?  Let schools continue down the road to Free School status and get the bureaucratic meddlers out of the way.  LGBT drop-in centres?  Do I need to say anything?  Tourism promotion?  Business services?  No, no, no!

So then, dramatic reductions in local council expenditure and personnel levels.    

Police
I would propose a simple solution.  Set 2013 Budgets as the base-line.  Then say that if they can have a workforce that is 70% front line and 30% back-room administration staff, then their budgets are maintained.  For each 5% deviation from this ratio, they lose or gain 5% of their budget.  For the avoidance of doubt, front-line means the total time spent by police service employees outside of the station relative to the total time available (time spent outside divided by headcount times working hours)  People want to see a visible  police service not something that they just pay for!

Transport
Immediately scrap the HS2 programme.  Other than some self-interested civil servants, no one seems to want this and the already high costs are only going one way.  So abandon it.  If there really is a demand to shave 15 minutes off of a train journey then some private enterprise will see the opportunity and then invest their money into it.

Welfare
Unsurprisingly, I see this as a significant contributor to spending reductions.  We need to get welfare back to being a safety net and not a lifestyle choice! 

The welfare cap to be reduced to £15,000, with immediate effect.  It cannot ever be right that it pays more to be on welfare than it does to be in work.  Within this welfare cap, housing benefit to not exceed £5,000.  It is not the business of government to subsidize private landlords!   

Statutory sick pay to be abolished. 



We are probably not there yet, in terms of balancing the budget and matching cuts in taxation with reductions in spending, so..........

Quangos
I have said here before, what is needed is a real bonfire of the quangos.  Start from the basis that all are abolished.  Every single one, 'at a stroke'.  Then only absorb those activities back into the appropriate departments, if they are absolutely necessary.  Oh, and by the way, the funding reduced by the abolition of these quangos does not count towards the departmental cuts mentioned earlier.

Balanced Budget and Debt
The budget must be balanced.  So income as a minimum, matches (or exceeds if possible,) expenditure.  This to be a statutory obligation - written into law!  However, before the budget is balanced, we need to tackle the national debt. 

So, we treat this like a mortgage.  We say that the current debt is to be paid-off over 25 years!  So, when the budget is being calculated we include, on the expenditure side, something around £50 billion to cover debt reduction.  Can't be done?  Then the departmental cuts need to be deeper.  We cannot burden future generations with the level of national debt, that the UK now carries - £1.3 TRILLION and rising.  Over the years, use the debt-interest reduction windfall to pay more off of the debt.

Conservatives cannot just be about deficit reduction, we must be about debt reduction as well.  That is how we serve all the people of the whole UK.

   

  
  

Is Labour finally getting it?

Labour Party leader, Ed Miliband is reported to be delivering a speech, later today, where he will commit Labour to accepting the spending plans that they might inherit from the UK Coalition government.  The Lib Dems leader, Nick Clegg, is scheduled to deliver a speech where he too, will speak of the need for  a 'realistic manifesto' rather than a fanciful one.

Labour being Labour and Miliband being Miliband, we must consider the caveats that he employs in the non-embargoed speech. 

According to the BBC

"The Labour leader will say his party will not be able to reverse any spending cuts announced by Mr Osborne unless equivalent cuts are made elsewhere or a similar amount of revenue is raised from other means."

That kind of sounds like spending plans will be maintained but that doesn't exactly rule out tax increases.  Given Gordon Brown's propensity for all sorts of new tax wheezes, who can say what Gordon's protege, Ed Balls, will come up with.


The BBC goes on to report that Milliband will say

"Our starting point for 2015-16 will be that we cannot reverse any cut in day-to-day, current spending unless it is fully funded from cuts elsewhere or extra revenue - not from more borrowing."

So where does that leave Ed Balls, Ed Miliband and all of those Labour politicians and those in Europe and the IMF/OECD who kept on saying that the UK's 'austerity' programme was going to far and that the UK government should borrow and invest in infrastructure?

Of course this massive policy U turn is just passed-by, by the biased BBC.   Watch and listen and see how many times the BBC ask either of the two Eds the 'when did you stop beating your wife question' - as in

Nick Robinson or James Landale to Ed B or Ed M
' So do you agree that this represents an endorsement of the Coalition policies pursued by David Cameron and George Osborne and vindication of what they have been saying all along, about the difficult economic conditions that they inherited, from the last Labour government and the harsh global economic situation?'
 
The Lib Dems too are sniffing the coffee and sensing that making unrealistic policy promises just won't fly with the electorate.  My view though is that it isn't coffee that they are smelling this morning, it is napalm.  Their abandoning of their student fees pledge will, I suspect, leave them in a scorched earth position.

For the Tories, this welcome dose of reality from the other parties, should provide them with an opportunity.  George Osborne should seize this to make and plan for deeper cuts and this time, take a large and sharp axe to the NHS.  Osborne is a very political Chancellor and surely he can see this is a chance to 'wrong-foot' Labour by getting them to commit to his spending plans before he has actually made them.  Why not then, use this as a weapon to make meaningful cuts in state expenditure.  I know that the Tories made some commitments about ring-fencing the NHS but now is the time to cut, cut, cut, in that department.  There cannot be a person on the planet, save for some head-hunting tribesman in Papua New Guinea, who doesn't think that the bloated NHS doesn't have some fat that could be trimmed.  Couple that with the rising anger at the way that the NHS is mis-run and they way it's patients are being mis-treated and, in some cases killed off and you sense that the scales are falling from the eyes of the public. 

I say that this new realism 'should provide' an opportunity for deeper cuts rather than does because at heart I don't think that the current Conservative leadership are really Conservatives, in the traditional sense.   So I am not holding my breath for anything radical in the upcoming spending review. 

Look at their pushing of the homosexual Same Sex Marriage bill.  Not in their manifesto, not supported by the party in the country but still they persisted with it. 

Look too at Europe, Cameron absolutely knows that he will not gain any meaningful concessions from the other EU members.  None.  Their will be a bone or two thrown to the UK, so that it can be dressed-up as a 'significant re-claiming of power' but the reality is that nothing of substance will come our way.  So why not start the re-negotiation process now and then go to the electorate, in 2015, with a clear position - vote Conservative and we will re-take control of the UK and will remove the UK from the EU?   I suspect that at heart, Cameron and the rest of the leadership want to stay in the EU because that is where all of their chums, from the elites that rule us, are located.  After all, it is only the man in the street that wants out.  No politician wants to stop the 'gravy train'.

Taxing matters

If you can accept that Nick Clegg's so called 'wealth tax' is a contribution to the debate, then you will note that tax is starting to feature more and more in the current political and media discussions.

Clegg and, earlier Cable, have prattled on about a 'mansion tax' or a 'wealth tax'  If I understand the latter this will be some kind of tax on assets.  If it is, then as Anthony Hinton pointed out, in the London Evening Standard, this then acts as a bringing forward of Inheritance Tax and, for those elderly people, who are asset rich but cash poor, would present a very difficult situation.  The 'mansion tax' would seem to present the same issues.  So trying to spend tomorrow's money, today.  You might even call it, borrowing from the future!

I have tried to find out 'who pays, what' as regards Income Tax.  That is, what percentage of the working population pay what percentage of the total taxes?  We hear that something like the top 10% of earners currently contribute more than 50% of the total tax take.  Is contribute the right word when it is compulsory?
I digress.

Do these Lib Dem 'rocket scientists' and their socialist colleagues in the Labour Party, have an absolute number in mind for the top tax rate - for their so called 'fair tax'?  That is, have they modeled their tax and tax 'plans', to see just how much revenue would actually be raised?

I sense (and stand ready to be proved wrong) that the only way that further tax will be effective, is if the higher rate is spread wider - so more and more of the masses in the 'middle classes' are brought deeper into the fold - I just don't think that the 'rich' can be  taxed sufficient to feed the beast that is government spending.

 I come at the tax question from a different angle.  I believe that the most effective way to stimulate the economy would be to cut taxes.  If there are any ITEM members out there, maybe they could model this?

Raise the tax threshold to £15,000, abolish the 45% rate, reduce the 20% rate to 15% and the 40% rate to 35% and reduce fuel tax by 5% and eliminate the green levies being applied on fuel provision.  Give an NI holiday to employers who take on new employees and hold it for three years.

Of course this will cost money - that is the great maw that is government will initially  receive lower direct income - and so to overcome the gap, the choice is either real cuts in government expenditure or more QE.  The proper and courageous solution is for cuts to be made but given the Lib Dems baleful influence on government policy we can expect 'bleeding hearts and stumps' to be used to persuade politicians to avoid the work for which we employ them and the decisions that we expect them to make.

If there are leftists out there who can prove that tax cuts will not stimulate the economy and/or that further government spending will, then do so, otherwise, join the campaign to get tax cuts implemented as a priority.

If there are any Conservative MPs that understand the founding principles of their party, then perhaps they can push their party to act like Conservatives!