The 2009 UK Budget

What a jaw dropping, buttock clenching, aberration we have just witnessed.

Today's budget was nothing short of a disgrace.

Cast aside the cheap politics of an economically irrelevant higher rate of tax, and focus instead on the blatant lies of our future growth forecasts, and catastrophic borrowing requirements that can only worsen as the aforementioned forecasts are proved worthless.

Already the bond and currency markets are alive to the future. Even if our politicians are not.

Deflation in the UK is another lie. As our currency plummets and bond yields soar, inflation and higher interest rates are the future.

I have been remiss in my treatment of this blog. Today is an inspiration to do more - not just for my future, but that of my children and grand children, who will be burdened with a probably one TRILLION pounds of additional debt.

Shameful.

Jade Goody And The Death Of A Nation

If ever there was a symbol of the collapse in standards of British society, it has to be the brouhaha surrounding the demise of Jade Goody.

No doubt there are tragic elements to the situation, and death by cancer is nothing I'd wish on all but the most heinous of people - it certainly wouldn't be a tragedy if Robert Mugabe, for example, was suddenly to be diagnosed with advanced colorectal cancer.

However, the beatification of someone who is, essentially, famous for being mind bogglingly stupid; ignorant to the verge of racist; and whose original claims to fame were to perform oral sex on a near stranger on a live TV feed; not forgetting stripping naked - also on live television; is something that exasperates me greatly.

No longer are we a nation where our youth aspire to sporting greatness; excellence in science or engineering; or simple progress through study, hard-work, and self improvement.

Nor do they even aspire to more ethereal, but nonetheless laudable, achievements - through art, the stage, or the screen.

Instead, they yearn simply to be famous and rich, and will prostitute themselves in any way necessary, that might offer even a flimsy chance of success.

Goody was the most successful exponent of this 'achievement' - and even now continues to milk her position for every penny it is worth. Her path guided by the wily hand of Max Clifford - media manipulator extraordinaire.

The fools and retards who fill the coffers of the reality shows and trash magazines that fund this lifestyle reverentially peddle the line 'she is doing it for the kids'.

As they watch her living out her final days in her million pound mansion; driving to yet another photo-shoot in her £50,000 4x4; they do not pause to reflect on the thousands of other women who have died of cancer in infinitely less privileged surroundings, and whose families will be left to struggle by in circumstances of genuine hardship.

They do not have the luxury of 'doing it for the kids'. They only have the true reality of their impending demise.

Even Goody's unfortunate children were the product of reality TV. Part of the classic template to eke out the proverbial 15 minutes for the maximum period possible.

Get on reality show - get famous
Have relationship with other famous person - sell story
Have kids - sell story and photos
Lose weight - sell story and photos
Get married - have wedding paid for by others; sell story and photos
Get separated - sell story of 'heartbreak'
Get into new relationship - sell story and photos
etc...

This is what our nation has descended to. A cold, shameless world where basic human emotions and needs are perverted for the sake of monetary gain.

A world where children are not born of love, nor even of passion, but of a pregnancy diary deal, and an exclusive OK! Magazine photo shoot.

Goody is the reality TV equivalent of a lottery winner. The one in a million who hits the jackpot and thrives upon the broken dreams, and ticket fees, of the other 999,999 entrants.

Those who aspire to follow this path are battling against odds that cannot be overcome by anything other than a fluke.

Do those who yearn to fill her boots recognise this? Perhaps; perhaps not.

Would they care if they did? I doubt it.

Rather a one-in-a-million shot at fame, than a life of education and endeavour for them.

If this is the electorate, can it be any surprise we are 'rewarded' with the politicians who currently govern us?

How To Cut Our National Debt

UK finances are in a woeful state.

Unless we can bring order to the chaos, our children, and our children's children, will still be paying for the mess we have made.

Cutting the national debt is essential; but how?

To reduce debt we need to either earn more, or spend less.

Earning more is easier said than done. We can hope an eventual upturn in the world economy will lead to improving tax revenues, but our taxation rates are already more than high enough, so I would resist any calls to increase them further.

Debt reduction must therefore be funded primarily from expenditure cuts.

Governments - and would-be governments - are keen to talk of 'efficiency savings'.

While they talk-the-talk, they generally prove to be unable to execute such savings with any degree of success.

My approach would be simpler, and certain of success.

As a 'starter for ten', I would scour every level of government from the corridors of Whitehall to the lowliest of local councils, and sack immediately anyone whose title was, or sounded similar to, Equal Opportunities Officer, Diversity Consultant, Communications Manager, Head Of Communities.

We are living in the 21st Century. Nobody needs to be told that blacks should be treated as whites; women as men; disabled as able. We should not need to pay absurd amounts of money to people to teach us what we already know.

Nor do we need spin doctors to tell us what a good job politicians are doing.

If I feel safe on the streets; if those streets are clean and smooth; if I am treated swiftly and well when I fall ill; if my commuter train is on time; then I will know the government is doing a good job.

Community is something born of the people. It is not something prescribed by a council suit.

These, and many other jobs in a similar vein, are a pointless parasitic drain on the system. They give us nothing we need, whilst draining our coffers and bloating the public sector pension debt for decades to come.

This must end immediately.

Does John McFall Read This Blog?

Some time ago I called for an increase in the UK Income Tax threshold.

This week senior Labour MP, John McFall, has called for a rise in the threshold to £10,000.

Since I proposed making a 45-hour week worked at minimum wage tax free, the figure I'd have been looking for would be £12377. I'm assuming any sane person would want around four weeks holiday per year.

Mr McFall's proposal would be a huge step in the right direction; though sadly National Insurance appears to be off his radar.

According to The Treasury, each £100 increase in the tax threshold costs £530m, so to get close to my proposed threshold of £12377 would cost in excess of £31bn per annum.

However, the recent utterly pointless 2.5% reduction in VAT is reckoned to cost around £12.5bn. Or, to put it another way, £5bn per percentage point.

Dismissing for a second issues such as demand elasticity and labour mobility, I calculate that raising VAT from the current permanent rate of 17.5% to 25% would raise an annual sum of around £37.5bn.

This would provide ample funding to take the lowest paid ENTIRELY out of income tax, and would leave over £6bn per year to fund National Insurance reductions. Which again I'd advocate be done through raising of thresholds.

This would dramatically restructure our tax and benefits system in favour of those most deserving of assistance.

It would promote production over consumption.

It would encourage hard work over benefits dependency.

It would give individuals the freedom to decide how to utilise their hard earned cash.

It would extend the gap between the income of those in low paid jobs and those on benefits.

It would be a change designed to encourage effort and invention.

In short, it would be a change for the better.

Stop Press! More Expensive Booze Means People Get Less Drunk

Did the government really need to commission an academic study to work this out?

Dr Petra Meier of the University of Sheffield's School of Stating the Bloody Obvious reports:

Our results also show that targeting price increases at cheaper types of alcohol would affect harmful and hazardous drinkers far more than moderate drinkers. Of course these heavier drinkers, by definition, buy more alcohol, but detailed analysis of data on purchasing patterns also shows that they tend to buy more of the cheaper beers, wines and spirits.

There are different types of problem drinker.

Some drink too much, and do no harm to anyone other than themselves. They may be the life and soul of every party - first on the dance floor. They may be a recluse whose drinking is unknown to anyone but themselves.

In either case, their actions are based on personal choice and should not be overly regulated by the state.

Another type of problem drinker gets tanked up and goes out looking for trouble. Be it vandalism, car theft and drunk driving, or sticking a blade in some unfortunate passer-by.

Clearly their actions SHOULD be regulated by the state to the max.

This second type of problem drinker lives on a diet of super lager, cider, and fortified wines. They shop not by quality or taste, but by bang per buck.

They want the maximum units for the minimum cost.

The answer is simple. Two taxes should be levied on alcohol.

A per unit tax would drive up the base cost of the bang per buck brigade - whilst minimising the impact on more sociable drinkers.

A tax based purely on alcohol content would also be unfair as it would unduly benefit consumers of premium products.

If you can afford a 1947 Petrus, you can afford to pay an appropriate level of taxation. Therefore VAT should also continue to be levied.

Some whine that driving up the price of alcohol is an attack on the poor. Is it really?

Who are most likely to be victims of drunken attacks? Who are most likely to live in fear of violent and abusive guardians or partners?

The Benign Dictator is no puritan, but he does believe that getting drunk is a privilege; not a basic human right.

If you want to get drunk, get a job.

Correct Again!

I really should do this for a living.

Robert Peston is perhaps the most powerful blogger in the UK right now. He may not be a 'pure' blogger, but his output is prolific and hugely influential.

He gets to meet the movers and the shakers face-to-face. He gets the juicy leaks without fear of having the cops beating down his door.

Today he writes of his conversations with the biggest retail bosses in Britain.

What does surprise me is that those I've met recently are furious with the government for cutting VAT....They believe that a reduction in income tax or an increase in tax credits for those on lower pay would have been a more effective stimulus.

Frankly, I'm surprised he is surprised.

As I wrote on 24th November 2008...

the gap between benefits and low-paid jobs should be widened as far as possible by extending the personal income tax allowance to remove as many of the lowest paid from taxation...This would put more cash in the pockets of the lowest paid, for them to deploy as they saw fit. Whether that be to reduce debt, save, invest, or spend. At this moment in time, none of those options is harmful to the economy.

Enough said. For now.

The Great Fallacy Of Brown and Darling's Fiscal Stimulus

We Benign Dictators are a busy lot. Which explains why I have not yet had time to fully digest today's Pre-Budget Report.

Yet even a cursory glance was enough to confirm the fundamental fault in the current government - and most commentators - thinking on the best way to escape the onrushing recession.

The purpose of any recovery package should not be to sustain spending - it should be to return people to productive employment.

This is a recession built on gargantuan mountains of debt and minimal personal savings.

One aim of any recovery package should certainly be to maintain a sufficient level of confidence among consumers that they continue to spend at a prudent - frugal even - level; sufficient to keep the wheels of commerce turning, albeit slowly.

More importantly, it should set in place a plan to repair shattered family balance sheets, and minimise the short-term impact on already overstretched government finances.

It should therefore seek to make work - even low paid work - a more compelling proposition than life on benefits.

To do so, the gap between benefits and low-paid jobs should be widened as far as possible by extending the personal income tax allowance to remove as many of the lowest paid from taxation.

This would put more cash in the pockets of the lowest paid, for them to deploy as they saw fit. Whether that be to reduce debt, save, invest, or spend. At this moment in time, none of those options is harmful to the economy.

Instead we got a temporary cut in VAT - designed to encourage spending - offset by more tinkering with direct taxation.

Scandalously, this includes a hike across all National Insurance bands. As I have said before, Employer National Insurance is a tax on jobs.

For the government to be proposing raising the cost to employers of recruiting new staff at such a time simply beggars belief. While the implementation of the hike may be delayed, the message is clear - employing people will be more expensive in the future.

Precisely the opposite of the message the government should be sending out.

The reason for this is simple. This is not a budget for economic recovery. It is a budget for political survival.

Yet again the needs of the country are subordinate to the needs of the governing political party. Another compelling example of the failure of democracy in the UK.