British Politics’s Blog

The ravings of an individual, UK voter frustrated with our politicians

Posts Tagged ‘Current Affairs

British Public will not accept higher taxes

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David Cameron has made much about the fact that he cannot make any commitments in terms of tax cuts and he has also said that he cannot rule out tax increases. The reality is he probably thinks this makes him look tough, honest or maybe even sincere. But there is another harsh reality that he ignores at his peril. That is, the current Labour administration has constantly hammered the taxpayer to fund new initiatives, to invest in health, education and to deal with child poverty. We will no longer tolerate another attack on our finances, particularly given the current state of the economy and the failures of the current administration to get value for our taxes.

The Labour administration has used stealth taxes to increase the tax take, this is equivalent to 3% of GDP, or if you prefer, the equivalent of a further 10p in the pound on direct taxes. David Cameron’s government would benefit from this situation. Yes, I fully accept that as a result in the slow down in the economy and the high level of borrowings, that tax cuts may not be a short, or even medium term reality, but tax cuts must remain a long term commitment.

If we work hard, we are entitled to retain more of our hard earned money. The conservatives must, instead, look to address the public sector, which is so bloated, that it now employs one in 5 of our working population. They must look to ensure that we get more ‘bang for our buck’ the current Labour administration has spent £billions on consultants, spin, marketing and failed projects. Some estimates put their waste at over £100bn in 11 years. Any future government that does not accept that savings can be made in how taxpayers money is being spent, does not deserve the opportunity to lead this country.

The ‘something for nothing’ society needs to be addressed. There are 2.5m people claiming invalidity benefits, up by 1.5m during Labour’s reign, this must be addressed. Those with genuine needs must be supported, the rest must be forced to accept work. The taxpayer does not want to pay someone to sit at home on their backsides if they have a bad back, instead they can get an office job and make a contribution to society.

Any government, current, or future, would do well to consider the fact that the British public, or more specifically, the taxpayers, contributing to this society, are fed up with being made to pay more and more of our money in taxes. It is accepted, that it is far easier to introduce more stealth taxes or increase existing ones, than it is to deal with our bloated public service sector, our something for nothing society or our government waste, but deal with it is what they must do.

As a people, we have a moral responsibility to help those that are not able to help themselves, but we should not be encouraging people to simply help themselves to our tax money. Grand initiatives are okay, but only if we can afford them, we should for example, slash our overseas aid budget, which is currently costing the UK taxpayer some £5bn per annum. We should call a halt to the policy of cancelling third world debt without pre-conditions, which serves only to allow the rich elite of these countries to further prosper at our expense and the expense of their own people.

If Cameron, or anyone else for that matter wants my vote, they do not have to promise tax cuts, but they must promise not to increase taxes. Instead, they must get on with the job of reducing their overheads, getting rid of waste, exactly the same as every working family in the country is required to do in these difficult times.

Government must lead by example, and David Cameron should take note, that the last thing the taxpayers of this country needs is another government that is pilfering our money and then frittering it away. Arguably, taxes are a privilege, not a right.

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Bradford & Bingley nationalisation, is it a good deal?

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As I have said, not for the first time, I am no financial expert, but I am a little confused about the ‘part nationalisation’and ‘part sell-off’ of the Bradford & Bingley deal. I accept that there is probably still more detail to come about, but from the little that is available, I find myself wondering, whether the government, on behalf of the hard-pressed taxpayers of this country, worked out a good deal.

In the past, building societies received deposits, in order that they could then use that money to offer mortgages and loans to others. The saver would receive interest on their money, the mortgage payer would pay interest on their borrowings and the building society would take a commission in return for the introduction and managing of the arrangement. Although this model has been turned on its head, with the wholesale trading of these mortgages, the principle should still be sound.

Therefore, if the government have taken on all of the mortgage debt of the Bradford & Bingley, estimated to be some £50bn, why not retain the deposits as well? Instead, they “sell”, the ambitious Spanish conglomerate, Santander, some £20bn of saver deposits (2.7 million people), for the miserly some of £612m. How can this be a good deal for the taxpayer? How can the government be so sure that the savers interests are protected, given we don’t really know that much about Santander. In fact, if the government were responsible for the sale of these customer deposits and something were to happen to Santander, would the government be culpable or liable, given it was they who negotiated the deal?

This particular arrangement can’t be good for the employees either, because Bradford & Bingley employed some 3,000 people and operated 197 branches. Does anyone imagine that a foreign owned bank, will give a toss about these employees? No, from what I can see, the UK government has passed over the profitable side of Bradford & Bingley to the Spanish owned bank ‘Abbey’, whilst leaving the British taxpayer exposed with just the bad mortgage debt. What was the point in getting rid of depositors money which has traditionally been used to offset mortgages? Looks like a very poorly thought out deal to me and somebody needs to explain why? Santander must be rubbing their hands with glee at the at the apparent naivety of the UK government.

I would not normally be a supporter of nationalisation, although in this case, as in the case of Northern Rock, there was probably no palatable alternative. However, I do believe that the government is responsible for driving home a decent deal for the taxpayers, they have a duty of care to the public purse and a responsibility to the taxpayer. No matter how urgent the problem, they should not lose sight of this. Yet here, from what I can see and perhaps against the views of many other observers, I fail to see how anyone, other than Santander would be considered to a be a winner.

HSBC increases mortgage rates in the UK

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HSBC have announced an increase in their mortgage rates to borrowers which will affect hundreds of thousands of borrowers. Now, whilst I accept that the inter bank lending rate has risen and that the banks have losses to contend with, this should be weighted against the fact that the same people that have mortgages, the tax payer, are currently accepting the increased risk brought about by the incompetence of the banks.

The Bank of England has advanced £billions of tax payers money to help prop the banks, this is not a risk free strategy and the evidence suggests that it hasn’t worked anyway. But there needs to be some form of quid pro quo, if the Bank of England is advancing the bank’s our money, then there needs to be a cap on the level of mortgage increases levied by these banks. Mortgage rate increases should be commensurate with need not greed. The simply can’t have it both ways. I would hope that the Bank of England and/or the government have sought some time of assurance from the bank’s that they won’t shaft mortgage payers in order to have a quick fix for their profits. Based on experience, I suspect this has not happened, but rest assured, a more savvy public will be watching and waiting.

Tax payer owned (not government owned as is often the way it is described), Northern Rock has indicated that it may well follow suit. Northern Rock should be setting an example for other lenders, no playing a game of me too.

Written by British Politics

25 September, 2008 at 3:42 pm

Labour MP, Caroline Flint shows the way forward

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I have long felt that Caroline Flint is one of the more intelligent members of the Labour cabinet, not that this would be particularly difficult, but she certainly shines above the rest. In a fringe meeting at the Labour Conference, she once again demonstrated that she has a better idea of where Labour needs to be, than it’s current leadership.

She said “We have to govern for the 80% of ordinary people who work hard, whether they have a minimum wage or whether they have a degree. The majority of people who work hard, take the ups and downs, pay their taxes and support their kids and ask for very little from the state deserve the attention of our government.”

She is completely right! Caroline Flint argues that middle income earners feel a strong sense of unfairness demonstrated by the policies of this government. She also fundamentally disagrees with the notion pur forward by think tank, Compass, which suggests that Labour must concentrate on the poorest people in order to win the next general election. Right again Caroline.

What this government has failed to grasp is, that it is primarily the middle income earners that fund this government’s projects through higher taxes and the payment of surcharges, for example, the £35 a year levied by the energy companies for their energy saving measures offered to the poorest members of our community. So, whilst the middle income earners are paying for the governments pet projects, they earn too much to benefit from tax credits and other ‘benefits’, but too little to be able to shrug off the rising prices. They are the forgotten majority and any government that ignores them, does so at their peril.

For too long, this government has battered middle income earners, with higher direct taxation, introducing measures to push them into the 40% tax bracket, green taxes, the list goes on. Then they are told that they don’t qualify for most, if any of the measures they have paid for. It is appalling, and it has taken Caroline Flint to point this out, even David Cameron’s conservative party and Nick Cleggs LibDems have failed to highlight this indifference and victimisation. As for Gordon Brown, how can any middle income earners believe his fairer society speech?

Let us hope that Gordon Brown listens to Caroline Flint, or better still, given the Labour party is going to lose the next election, the opposition parties could take up the mantle and offer to redress the balance. I am not an analyst, but I would guess that many of the moderate income earners are in fact what would be termed ‘floating voters’. Our politician’s should start to listen more, if not to the public, then Caroline Flint.

John Prescott thinks Labour can win a fourth term

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Though it may come as no particular surprise to anyone, John Prescott is as deluded as his mate “Gordon”. At the Labour Party Conference in Manchester, Prescott could be heard shouting, “The election is 18 months away. We should proudly defend our record, we don’t do enough of that“. He then added that Gordon Brown is, “a man of capabilities, a man who can be trusted and a man who can deal with the problems“. He then went on to claim that Labour could win a fourth term. I have got news for you Mr Prescott, there is not a cat in hells chance that Labour will win another term in office. I would bet my house on it, but I doubt that will be worth much in 18 months!

You can’t knock the man for party loyalty, but this is at the expense of reality, because few people are listening and even fewer, other than hardcore Labour supporters, believe that Gordon Brown has a record to be proud of.

Yesterday’s man, John Prescott believes that if you shout loud enough people will listen, but they don’t, when he says something, people are just turned off. In government, John Prescott’s primary role was as a marriage guidance counsellor to Tony Blair and Gordon Brown and what a price the tax payer has had to pay for those sessions. In spite of the fact that John Prescott spent £billions of tax payers money, can anyone demonstrate one tangible benefit achieved by his involvement, in transport, the regions and the environment?

Whenever I hear John Prescott, I have a vision of the archetypal schoolyard bully boy, not a serious politician. I think Gordon Brown has enough problems, without John Prescott reminding people of Gordon Brown’s legacy, after all, that is why we are in the mess we are.

Gordon Brown criticises companies for off-balance sheet activities

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What a hypocrite Gordon Brown is, this man lauded for his so called economic competence. In an in interview with Sky News, Gordon Brown criticises companies for running “large off-balance activities”. He then goes on to say, “We cannot excuse the irresponsibility that took place in a number of institutions. And, you guessed it, he did this with a straight face and no sense of irony.

So, this is the same man, that to be certain that he did not break his own golden rules, ensured that the cost of the Private Finance Initiative’s (PFI’s), were not included on the government’s own books. These are calculated to cost the tax payer some £172bn between now and 2032. This is the same man that forked out £110bn of tax payers money in loans and guarantees for Northern Rock, once again, ensuring that it was not included on the government’s balance sheet.

Then there is a further £1.7bn that the government must pay for Metronet’s debts, this figure is also excluded from the governments balance sheet. There is also a further, estimated £790bn in government pension deficits, this is another liability that is excluded from the government;s balance sheet. Now I accept that this may be ‘legal’ but it is morally wrong and serves only to deceive us all into a false sense of security. Some would argue that the game that these large companies and institutions alluded to in Gordon Brown’s interview did nothing more than he has.

Now, Gordon Brown has says that “It’s got to be cleaned up and its got to be cleaned up quickly.” I would hope, that when he is considering these words, he will consider his own actions, because their are many in this country that would consider his own actions as “irresponsible” and “inexcusable”. Enough said!

 

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