What kind of cuts are acceptable?

When you look at the newspaper headlines (by the way, that is still allowed, under the Royal Charter!), you may wonder what kind of a country the United Kingdom has become.

The Labour party and their left-wing media allies, led by the Guardian and the BBC, are railing against what they see as swingeing 'cuts' in welfare payments and so called tax cuts for the rich.  Let's consider these.

Labour has christened the removal of taxpayer housing subsidy for spare rooms in social housing as a 'bedroom tax'.  How, even in their twisted 'Orwellian' use of the English language, a removal of a subsidy somehow gets converted to a tax on something, is beyond most people's understanding.  But let's examine further.  The change will see those people that are in receipt of housing benefit, have a deduction made if that benefit covers a property that is in excess of what the family actually need.  So if you have a couple in a three bedroom apartment or house, there will be a reduction in the amount of money, paid by the state because this couple have either one or two spare rooms, depending on other circumstances.  What is wrong with that?  Why should welfare recipients enjoy benefits that are not available to the ordinary taxpayer?  Why should Johnny or Jane Taxpayer subsidize a playroom for someone on welfare, while their own child (ren) must use the living room as their playroom?

Benefits are now capped (albeit at a very generous level) and will only be increased by 1% instead of  CPI - No sane person can reasonably support paying housing benefit of £1,000+ a week - welfare recipients living in housing that they would otherwise have no reasonable expectation of residing in.  No sane person can support welfare payments that are greater than the average national wage.  How could such a system ever hope to wean people off of welfare dependency and make work pay?

 Labour and its socialist allies are juxtaposing these 'cuts' alongside the reduction in the top rate of tax from 50% to 45% as in 'millions suffer while millionaires get a tax cut' type of headlines.  Remember it was Labour that introduced the special 50% rate as a 'temporary' measure.  Their words not mine.  Now the Conservative-led coalition has timidly reduced the rate to 45%, Labour complain.  They don't complain that the temporary measure hasn't been abolished - no, they complain that the temporary measure, that they introduced, isn't being made permanent!

Labour's biggest problem with the welfare 'cuts' though, isn't about the size of the reductions.  Truth is that these are barely scratching the surface.  No the Labour Party's problem is that these 'cuts' are actually popular!  The average working person looks at these and sees that finally, someone is thinking of them and making them appear less like fools, for working for a living.  Couple that with the accelerated introduction which raises the tax-free threshold and takes more and more people out of tax altogether and you can see that Labour is in danger of losing its client state constituency.  That is the big problem for Labour.  How do you get people worked-up about a reduction in the top rate of tax when their own tax bill is falling?  How do you get them angry about people on welfare being faced with the realities of life that the average worker faces every single day?


 

Note to Nick Clegg

Dear Nick,
here's an idea.  Instead of suggesting, in some kind of ill-thought out way, that the UK should 'tax the rich more' why not do now, what we are going to have to do eventually, anyway?

That is, why not cut expenditure.  From a Treasury point of view it has the same effect on the deficit!  However, there is so much more open to cut than there is to tax.

Abolish the Environment and Climate Change ministry - massive savings and lower fuel bills - gets my vote!

Of course, I know that won't build your 'street cred' at your party conference but it has a better chance of actually doing something constructive!

Incidentally, isn't the Chancellor supposed to be the one formulating economic policy?

Ed Balls and Tax

The 'Shadow' Chancellor, Labour's Ed Balls, has proposed some ideas for the upcoming UK budget.

• A 2.5% cut in VAT or
• A 3% cut in income tax, for a year or
• Higher tax credits or
• Bringing forward the increase in tax free pay

Each proposal would cost £12 Billion.

He is only proposing to do one of these (I think).

The idea is that any of these would provide a boost to the economy by putting money into the pockets of lower earners and they would then spend it, etc.

The last proposal 'bringing forward the increase in tax free pay' is pure mischief making.  He knows it is Coalition policy.  He knows that it is something that is close to the heart for the Lib Dem members of the coalition and so just seeks to sow some division!

Higher Tax credits?  I can't help but feel that we need less welfare dependency - a whole lot less - and this doesn't do it.  People should get to keep more of their money not have to pay it into the government coffers and then be given it back!

3% cut in income tax for a year.  A short term boost but, it might then lead to a permanent cut.  I can just imagine, 12 months after this has been implemented, that Balls would be saying ' the removal of this time-bound policy, would lead to a flight of confidence from the economy...............'  In my view taxes should be cut and then stay cut!

A 2.5% cut in VAT - Make it 5% and make it permanent.  Enshrine in law that the maximum permitted VAT can be 15% and can only be increased by way of a referendum!  Also, remove VAT completely from energy costs.  This latter is trapping many people in 'fuel poverty'.

My budget ideas

1. Scrap the minimum wage for those under 25
2. Undertake a complete review of all HS&E legislation with a report due back within 6 months.  Starting point is  that all legislation should be scrapped.  Any that are found necessary to be maintained, must be fully costed as to the economic impact for the country.
3. Apply same process to Equality legislation with a view to capping compensation levels at £100,000 and equalizing cap for all forms of  discrimination. 
4. Remove the 50% income tax level
5. Reduce the entry level income tax rate from 20% to 15%
6. Reduce the new high income tax rate, from 40% to 35%.  So we have two levels 15% and 35%.
7. Cut Employer NI contributions, on all new employees hired after budget date to zero for first three years
8. Plan to incorporate personal employee NI contributions into Income Tax inside of  a couple of years and cap at 10%
9. Increase personal tax free allowance to £15,000
10. Means test supplementary payments to pensioners.  Rich OAPs do not need the Winter Fuel allowance, etc..  However, any money saved, from a 2011 baseline cost, should then go to the remaining pensioners.  We're all in this together! 

How to fund this?

• Dramatically cut back and restrict salary levels at the top of all publicly funded organizations.
• Treat MPs the same as other tax payers - they must pay taxes on expenses.
• Undertake a complete review of all Quangos with a report due back within 6 months.  Starting point is that all should be scrapped.  Any that are said to be necessary to be maintained, must be fully costed as to the economic impact for the country and the results published.  Then hold a referendum and a number (say something less than 50) selected to be retained.  People get to vote on say, 5 of however many and the top 50, in vote terms, stay, the rest get closed.
• Relative to the above (and, I know pre-judging) implement a hiring freeze on all Quangos.
• Reduce funding for Wales, NI and Scotland, equivalent to the amount that they subsidize university education and health care compared to that which applies in England - that is, set a level playing field!
• Cut Corporation tax by 10% and give a 5 year tax-free holiday to any new manufacturing company that establishes and manufactures in the UK.

I am sure I can think of more and I will return to this, shortly.

The balance - do like Ed Balls always says Borrow.  I think though that the stimulating effect would reduce the actual borrowing need.

UK Defence cuts - Quick quiz

Two numbers

189,560

85,730

Which do you think is the number of Active UK Armed Forces personnel and which is the number of Civil Servants employed at the Ministry of Defence,

Media reports suggest that:

• The British Army has more Generals than active Challenger Tanks
• The Royal Navy has more Admirals (Full, Rear and Vice) than commissioned ships

In cuts that have been made to address the straitened financial situation in which the UK now finds itself, which is exacerbated by financial skullduggery by the previous administration, where do you think that the cuts are falling hardest?

• On front line personnel 
• On support personnel 
• On the officer class 
• On MOD civil servants

Talking of the previous administration, please recall that these are the same people who sent troops into combat zones, ill and under-equipped having committed forces on dubious grounds.

Defence cuts? 

• Bring our troops home and let them stay home unless we need them to go somewhere to defend British interests.  Back from Afghanistan, Cyprus, Germany anywhere that isn't a British Overseas Territory (so not the Falklands)
• Make reductions first, in the MOD among the civil servants - instead of 1 Active military person to 0.45 Civil Servants, bring this down to 1:0.2 (so reduce civil servant numbers by 48,000)
• Reduce the number of senior officers, Admirals, Generals, Air Chief Marshall and such ranks - far less 'chiefs' allows for better equipped and managed 'indians'

The first number above is current armed forces personnel.  The second number is the number of civil servants employed at the MOD.  Does anybody think we would have such a ratio if we were engaged in a direct shooting war?  

Labour, Cuts and the Unions

Labour is apparently in conflict with its trade union backers because it has now 'apparently' come out in support of public expenditure cuts and 'endorses' public sector pay restraint and goes further and suggests that public sector workers might take pay cuts to prevent job losses.

Labour now 'apparently' supports public expenditure cuts.  However, in certain of its confused and conflicting statements it still maintains that the cuts being implemented, against Labour's opposition, by the Coalition, are too deep and too fast.  That sounds like trying to be both pro and anti cuts.

Interviewed on the biased BBC, by Nick Robinson, Ed Miliband was asked

QUESTION: "Some people think this is curious because it gives you an excuse to say: 'Well we oppose this cut', only to say a few weeks later, 'actually we back it, we've got to live with it'."
ANSWER: "No, it's not about backing the cuts that are being made. We don't want these cuts to be being made. It's not in the interests, for example, of safety on our streets to be having the speed of cuts we're seeing in policing. Or in the interests of the economy to have the overall pace of cuts - that's why we say too far and too fast.

Make your own mind up as to whether Labour back or oppose the cuts and then let Ed know what he should say!


Labour 'endorse' pay restraint.  Well maybe the leader and Shadow Chancellor now do

Ed Miliband recently said:

It's a hard choice, but when you are faced with the choice between protecting jobs or saying the money should go into pay rises I think it's right to protect jobs," he said.

"In the end there's no easy choices in government... I think is absolutely right that we say we've got to prioritise employment."

Several Labour MPs have reportedly criticised the move, among them Austin Mitchell, who supposedly called it 'barmy' and accused Mr Miliband of "weakness".

Mr Miliband said Mr Mitchell was "wrong", adding: "We are absolutely determined that Labour shows we would be fiscally credible in government."

I can't help think that this is a smokescreen and the following backs up my thoughts.

Labour suggests that public sector workers might take pay cuts to save jobs.

I believe this is a cynical attempt to encourage the public sector to hunker down and weather out the economic storm that we are facing.  This is in the mistaken belief that doing so will be temporary and will be lifted when (if,?) Labour returns to power.  The Labour leadership (and their union counterparts) know full well that the country simply cannot afford and will not be able to afford the public sector to ever get anywhere near as big as it was under Labour. 

I am sorry to all those 'diversity officers' out there, and  all the other low-value adding but oh so right on and nice to have positions which get in the way of people living their lives and taking responsibility for their own lives, but you need to find a new career - the country cannot afford to employ your services and pay from the public purse.   


Call me cynical but I can't help but feel that the bluster from the unions is manufactured.  Leaked letters?  Public letters to The Guardian.  I smell an orchestrated campaign.  Goes something like this:

• Labour needs to build economic credibility with the Public.
• Labour to public back cuts because Public endorse and see necessity for cuts.
• Labour to endorse pay restraint in public sector because the Public think that the public sector should share the pain and have been cossetted by Labour.
• Labour endorse 'negotiated' deals that see public sector pay cuts to 'protect' jobs.
• Unions to express outrage, publicly, with letters to the press and privately, with letters that get leaked.
• Cue the two Eds standing firm and saying we have to be responsible and economically credible and then saying things which undermine their earlier stance (the latter is unintended but neither Ed really want to upset their union backers)

Ed Balls, Labour and the S word

Sorry really does seem to be the hardest word for Labour!

Ed Balls is now saying that Labour supports a pay freeze for Public Sector workers and won't seek to reverse expenditure cuts.

On Public Sector pay he said:

It is now inevitable that public sector pay restraint will have to continue through this parliament. Labour cannot duck that reality and won't. There is no way we should be arguing for higher pay when the choice is between higher pay and bringing unemployment down.
I know there will be some people in the trade union movement and the Labour party who will think of course Labour has got to oppose that pay restraint in 2014 and 2015. That is something we cannot do, should not do and will not do.

And on the expenditures cuts he said:

My starting point is, I am afraid, we are going to have keep all these cuts. There is a big squeeze happening on budgets across the piece. The squeeze on defence spending, for instance, is £15bn by 2015. We are going to have to start from that being the baseline. At this stage, we can make no commitments to reverse any of that, on spending or on tax. So I am being absolutely clear about that.

There was some additional waffle and some luke-warm support for the other Ed but nowhere does he say Labour was again wrong on the economic issues - nowhere.  I have scoured the leftist blogs (its okay I was wearing disposable gloves so I don't think anything rubbed-off) - but nowhere do I see the S word.

As I said earlier, Labour can apologise for the 1848 Irish potato famine, they can apologise for the UK's role in the slave trade but economic failure, failure to adequately regulate the banking sector  - nothing to say sorry for, according to their leftist vision. 

Ed Balls was at the very heart of the incompetency that was Labour's economic 'policy'.  Not on the periphery, he was an economics advisor to Gordon Brown (sorry for using such bad language) and  then he became a government minster, all the while, being one of Gordon's inner cabal. 

Labour supporters must be in a whirl - how can the cuts be wrong one minute (per the 2 Eds) and suddenly ok the next.  Same for the pay freeze.  Flip-Flopping in Westminster used to be confined to MPs and their second homes but now Ed Balls has brought this into a core area of Labour policy.

Can I expect them to support my campaign to get Grantham to properly recognize Margaret Thatcher?