Friday September 13th 2024
Midlothian resident and Midlothian View reader Bill Kerr-Smith.
This View has been written by Midlothian View reader Bill Kerr-Smith.
“Against stupidity, the very Gods themselves contend in vain”; this is one of my favourite quotes. I got it from Isaac Asimov, but it originates with an 18th century German playwright called Freidrich Schiller. Which just goes to show that even the passage of centuries has not purged humanity of its quota of “useful idiots”.
The “useful idiots” I have in mind today are the economic illiterates in the Labour cabinet who contend that every policy decision they make is a binary choice between taxing all of us more or slashing the essential services we all use, as they apply Austerity Mk.2.
Let’s deal with Austerity first. Most readers will recall the introduction of Austerity Mk.1 by George Osborne and the Cameron–Clegg coalition government in 2010. At the time he promised these policies would get the budget balanced and reduce the deficit by 2015. In 2015 he and the Treasury announced that “the beatings would have to continue” (my interpretation) until 2018, at least, as the medicine hadn’t quite worked. Osborne stepped down as Chancellor in 2016 and was replaced by Philip Hammond who, in his 2017 budget, confirmed that Austerity would have to continue until at least 2020.
So a 5-year programme that failed was succeeded by another 5-year programme that also failed. In the period 2010 – 2020 cuts of around 40% were made to Local Authority budgets and Ministerial budgets (most especially the the Department for Work and Pensions and the Ministry of Justice). These “inspired” policies led us to the state we are intoday, with the social safety net shredded, the justice system on its knees and Local Governments unable to maintain our infrastructure and services at an acceptable level. Who on earth could look at that track record and those outcomes and conclude that what Britain needs is even more of the same?
Now let’s look at tax. There is no doubt that additional tax will have to be part of any credible solution, but why do Starmer & Reeves always present this as a problem? There is certainly no scope for extracting more tax from 90% or more of the taxable population, but there is a huge range of taxes that could be equalised, or collected more efficiently, that would easily fill the “black hole” they have found many times over.
Look at Capital Gains Tax (CGT). Why should unearned income (from profits on the sale of assets) be taxed at a lower rate than earned income (wages)? It wasn’t always like this; from 1965 to 1988 CGT was 30%. In 1988 Nigel Lawson (then Tory Chancellor) increased the rate to 40%. It was Gordon Brown (a Labour Chancellor) who reduced the rate to 18% in 2008. Charging capital gains tax at the same rate as income tax would raise £12 billion of extra tax per annum.
Or look at restricting the rate of tax relief on pensions to the basic rate of income tax, whatever tax rate a person pays, which would raise £14.5 billion of extra tax per annum. Or think about investing £1 billion in HMRC so that it might collect all tax owing by the UK’s 5 million or so companies, because approximately 30% of that sum goes unpaid at present and it could raise £12 billion per annum.
These are only a few of the reforms to the tax system that can be found in the Taxing Wealth Report [written by Richard Murphy]. None of them are new taxes; all of them are simply equalising tax rates on all income or collecting tax due that the government hasn’t provided sufficient resources to collect.
Yesterday Keir Starmer announced Labour’s policy towards the NHS, which is basically saying that they won’t commit any more money until the NHS is reformed to enable it to deliver. This is a little like saying that you need to rebuild the 747 Jumbo jet in-flight and without any resources. But we MUST deliver better health care NOW. In practice, the only short term treatment that we can deliver is more money. Money is not sufficient but it IS necessary… and this is true whatever position you take on “NHS Reform” – reform always takes time and also money to oil the wheels.
So, step 1 has to be to spend more money to get the system as currently designed working as well as it can. Only then should we consider “how do we make it better/cheaper/more sustainable? etc.”. Lord Ara Darzi’s government-commissioned report, out yesterday, attributed the dire state of the health system in large part to the austerity policies of the 2010s, which slashed public spending in a bid to cut the budget deficit. Apparently, the suggestion is that the NHS has been underfunded, at least as far as investment is concerned, by £37 billion. If the shortfall in NHS funding is because of a shortage of investment, then the obvious response required is to provide that investment. The markets are ready to accept investment and the government would have no difficulty in raising the necessary cash, apart from their own blinkered perspectives and idiotic “fiscal rules”.
There must be millions of voters who, like me, gave Labour their vote in the July election for the first time in decades. Like me, they must be deeply distressed to see so much hope disappear in a smoke of sophistry and poor judgement.
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