British Politics’s Blog

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

Posts Tagged ‘labour government

Gordon Brown asked to resign

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It will probably make no difference at all, but Kalvis Jansons has created a new petition on the No.10 Downing Street website calling for Gordon Brown to resign. http://petitions.number10.gov.uk/please-go/

At least it is a chance for the many, many people that are at their wits end with him and his government, to have their views considered. I for one have already signed up and I would urge other to follow suit, maybe the Labour Party grandees will be reading.

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25 April, 2009 at 10:52 am

Jacqui Smith, it time to resign

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I am not normally one for calling for an MP’s resignation, albeit I am sure I, like many others would consider that there are a good number that should do so voluntarily. That said, I am of the opinion that Jacqui Smith needs to go and soon, not because of a single misdemeanour, but a series.

The bottom line is Jacqui Smith is not very good at their job. She is the first to try and manipulate the press and public opinion with elements of “good” news from reports, whilst blatantly ignoring those aspects which are critical or not self-serving, either for her or the government. Fair play some might say, but ministers must be judged on what they add, not what they claim.  Further, Jacqui Smith is something of a puppet, if the police want something, she believes that by giving it to them, she is helping the public, because the police only want to fight crime etc., this is utter rubbish. The police want more powers to intrude, monitor and spy of ordinary citizens and Jacqui Smith is seen as a soft touch. As a consequence the people of this country have seen a massive erosion of their civil liberties, right to privacy and freedoms.

My issue with Jacqui Smith is the utter and barely concealed contempt she has for the public at large, not just in terms of her actions is respect of her ministerial responsibilities at the Home Office, but also, her actions in respect of maximising her personal finances via the public purse. Whilst Jacqui Smith may be able to claim that she has operated “within the rules“, to quote one of her colleagues, “in the court of public opinion“, her expense claims are not acceptable in the least.

First she claims up to £24,000 per year because she says that her main residence is the room at her sisters house in London, not Redditch where her husband lives and her children reside and go to school. There is little or no credibility in this explanation. Then she claims for electrical goods, which includes two washing machines, why does she need two washing machines? Why should she feel the need to claim for two flat screen TV’s, what is wrong with one, why do they have to be flat screen? £550 for a kitchen sink….£1,000 for an antique fireplace, are these truly essentials, I think not. In the old days, expenses were referred to as “out of pocket expenses“, for an MP, they are nothing of the sort, instead they are used as a method of supplementing salaries.

What I find difficult to believe is that Jacqui Smith seriously expects the public to believe that she did not know that her claim of £69 per month was only for the internet and nothing else. It would suggest that she is both out of touch with the real costs we face everyday and implies that her attention to detail is very badly and sadly lacking. For a Minister in charge of the Home Office and therefore our security this is a very real worry. Moreover, someone that claims to operate within the rules whilst ignoring the spirit of the arrangement is, at least in my opinion, lacking judgement and credibility. If Smith was doing a good job, perhaps the public would be more forgiving, but she is utterly useless. The only consolation is that most of her fellow ministers are as inept, therefore she fits in well, but that doesn’t make it any better. She will survive, but only because Gordon Brown know that the by supporting her he can benefit from undying loyalty and that having a cabinet full of incompetents makes him look better.

I am further angered at the way that Gordon Brown has insisted that there should be a review of MP’s expenses, yet it cannot start until the end of the summer recess and has no need to report until after the next election. Once again, we are all being taken for fools, it simply does not take that long to review MP’s expenses. The bottom line is expenses can and must only cover ‘out of pocket’ expenses, they can and should be based on those in the private sector and second home allowances must stop. MP’s can be provided with an overnight allowance for when they are in London on parliamentary business, but his should be weighted based on private sector allowances for accommodation and food.

The review of expenses ought to be carried out by a firm of accountants and the brief include a requirement that they revise them to fall in line with the private sector. I reckon it will take about 2 weeks, but of course, we know that these self-serving MP’s are going to insist that they receive a salary increase in place of any ‘sacrifice’ they make on expenses. They also know that they will then get a doubly whammy, because a higher salary means a better pension, all funded by us. For a government so focused on targets, why don’t they pay themselves performance and results based rewards? Simple, not one of them would earn the bonus, they know it and we know it!

If MP’s don’t like the terms or rewards of a parliamentary career, then they must resign and make way for others that do. One thing is for certain, based on the rank incompetence demonstrated by the majority of our MP’s we shall be no worse off and in all likelihood, we will end up with real people that represent the interests of the public at large, not just themselves. It is time for change.

Anyone that is angered by the information contained in this post may also like to be aware that there is a new Bill going through parliament which seeks to provide MP’s and all other public servants with what amounts to an immunity from prosecution (civil and criminal) with a legal definition of the term ‘reasonable discretion’. You can find out more here: Bill to Exercise Reasonable Discretion

Tony McNulty and an expense claim too far

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I am angry with Tony McNulty, because, although I disagree with most of his party’s policies, I always considered him to be sincere and committed to the policies adopted by New Labour. He was believable and one of the few ministers who could hold his own when challenged by the likes of Jon Snow’s  on the Channel 4 News programme, without sulking. Therefore, to find out that he was one of the members of parliament exploiting the rules related to second home allowances (which was designed to cover rent, mortgage interest payments or hotel expenses) was a great personal disappointment. I do not suggest that McNulty has done anything in contravention of the rules or regulations, but to claim as much as £60k in expenses for a home his parents live in, when it is just a few miles from his home, is truly stretching what could be termed, at least in my judgement, reasonable.

Members of Parliament are supposed to set an example to the rest of us, they are in a privileged position and as such, we are entitled to expect the very highest standards from those who are elected to serve the people. By and large, MP’s tend to vote and decide on their own salaries, perks, pensions and expenses, therefore is it essential that they are seen not to put self-interest first. It is quite clear, to anyone with half a brain cell, that second home allowances were intended to assist those MP’s who lived in their constituency and needed to cover their additional costs in terms of travelling or overnight accommodation in London. It was never intended to be a tax free perk, but that is precisely what it has turned out to be for many. They know that and we know that. Can Tony McNulty really justify his claim, when his permanent home is so close to Westminster, not in terms of the ‘rules’, but in terms of the spirit of the allowance? He may be an excellent debater, but even he will not be able to come up with a set of words that would convince me, let alone the public at large. To his credit, however, he has suggested that the home allowance rules ought to be reviewed.

This discredited expense system, that has become a method for MP’s to boost their earnings, needs to be overhauled NOW! Not by members of parliament, because most of them have demonstrated that they cannot be trusted to demonstrate objectivity, much less intelligence and independent thought, but by a committee of lay people. No longer is it acceptable that MP’s should receive benefits that those in the private sector could only dream of. MP’s need a reality check, they are so insulated from the people they govern, that they seem to have no idea how to act responsibly or appropriately. There is a recession going on out here, people are losing their jobs, companies are closing, families are becoming homeless, personal wealth is falling at an alarming rate and no-one in power seems to give a toss, so long as they are okay.

Ask the average MP why he decided to go into politics and you will get dozens of different answers, but I guarantee that they will not say they did it for the money, yet on closer analysis, it appears that greed (if lawful greed) is the order of the day. If MP’s earnings are so low that they feel they must maximise expense claims whatever the morality, then I suggest they step aside and let ordinary people take their place at the next election. God knows, this country needs people that are in touch with reality, rather than on a different planet.

Gordon Brown needs to get his house in order and Cameron needs to come off the fence and make some recommendations regarding a review of expense allowances, not simply insist that MP’s publish an account of their past expenses. Sometimes I think Cameron is even more removed from reality than Gordon Brown, now that is scary, especially given he may be our next prime minister. The bottom line is, however, that there are few people in this government that deserve their positions, starting at the very top, but I am becoming more and more concerned that there are an increasing number MP’s, from all side of the house, that do not deserve to be described a honourable nor are they fit to represent the good and predominantly honest people of this country.

UPDATE:

Anyone that is angered by the information contained in this post may also like to be aware that there is a new Bill going through parliament which seeks to provide MP’s and all other public servants with what amounts to an immunity from prosecution (civil and criminal) with a legal definition of the term ‘reasonable discretion’. You can find out more here: Bill to Exercise Reasonable Discretion

Another Jacqui Smith gimmick

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Not for the first time, Jacqui Smith demonstrates what a naive politician she is and how she will do anything to grab the headlines. Once again, however, she managed to put her foot in it. This time, the subject matter, part of the government’s gimmick a day programme, was a domestic violence initiative, whereby, the government is proposing the setting up of yet another database, this time to register known abusive partners.

Clearly domestic violence is a serious issue and I am all for a tough line being taken on offenders. But, during a round table discussion, Sandra Horley, Chief Executive of Refuge, a women’s charity, said: “We have had enough talking – we need action. As for the perpetrators’ register, it is a gimmick and doesn’t address the root problem. The Government is hoping to get away with useless initiatives like this register and it is hypocritical to sound tough and do little.” Fair point from someone that should know. But, my problem is that any initiative of this type must be gender neutral, Ms Smith’s comments would indicate otherwise.

On a breakfast TV programme, Ms Smith said “Violence against women and girls is unacceptable in any form. We’ve already made real progress with domestic violence incidents more than halving in the past 12 years. But I want to start a national debate on what more we can do to prevent it and challenging attitudes which condone it.” Once again, in her ‘foot in the mouth’ style, she makes it a gender issue, when there are countless statistics that demonstrate that men are also victims of domestic violence. What really annoys me, is in an attempt to suck up to female voters, ahead of an election, she detracts from the initiative by implying that it is gender specific.

I am all for the introduction of bold initiatives aimed at combatingdomestic violence, irrespective of gender, but such programmes need early discussion with groups that understand the problems and challenges. Governmentofficials must never seek to launch an initiative before it has broad support from those that havethe knowledge and experience to make a tangible contribution. The way this initiative was launched, was typical of Jacqui Smith and her spin obsessed government. So much for Gordon Brown’s promise to stop Labour spin! There was some consolation that Ms Smith was berated in public, although I suspect somehow, she will be too thick skinned to realise what a complete idiot she looked. Hopefully, this clumsy announcement by Jacqui Smith will not discourage interested groups from coming up with an alternative proposal that is gender neutral, has general buy-in and is workable in practice.

It is high time that this government and its ministers understood that the public will not tolerate serious issues such as domestic violence being used to gain a cheap political advantage. The press launch was quite clearly an ill-considered, pathetic attempt to gain news headlines with little or no substance behind the announcement. The public demand that issues such as this be dealt with in a serious, considered and practical manner.  Jacqui Smith is long past her sell by date and should be removed from her post, although that is highly unlikely, given it is only her rank incompetence that makes Gordon Brown look slightly better.

UPDATE:

Anyone that is angered by the information contained in this post may also like to be aware that there is a new Bill going through parliament which seeks to provide MP’s and all other public servants with what amounts to an immunity from prosecution (civil and criminal) with a legal definition of the term ‘reasonable discretion’. You can find out more here: Bill to Exercise Reasonable Discretion

Mortgage assistance for struggling homeowners

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Although the government has yet to provide the ‘small print’ for their help for struggling homeowners, some details have emerged. According to the government, the following mortgage providers have agreed to support their plan, HBOS, Nationwide, Abbey, Lloyds TSB, Northern Rock, Barclays, RBS and HSBC. These companies account for some 70% of the domestic mortgage market.

Currently, people who are on a Job Seekers Allowance, or income support, can apply for taxpayers money to help repay the interest on their mortgages. Previously, the government stated that the maximum value of the mortgage where interest would be paid was going up from £100k, to £175k, this will now be £200k. Those claiming JSA will see this support limited to two years and borrowers that have a working spouse or partner, or savings of over £16,000 will not qualify for this support.

The new plan sees many of the major mortgage companies agreeing to extend the minimum period before they action repossession proceedings from around 3 months to 6 months. This is fairly significant, but I will come back to this point later. Another part of the plan, which currently lacks any detail is support for people that have suffered a significant loss of income, perhaps a loss of overtime, one partner having been made redundant, or the borrower having to accept a lower paid job. Here, borrowers with mortgages of £400,000 or less, will be able to defer interest payments, which will then be added to the capital. The Treasury will then underwrite the additonal ‘risk’ normally borne by the lenders. This programme is designed to complement the existing mortgage support provided to those on income support or a Job Seekers Allowance.

However laudable the scheme, there is a very limited benefit to those that have taken out some type of ‘secured’ loan and subsequently default. This is because, not surprisingly, the government are not prepared to underwrite secured loans. The problem here is where a borrower has defaulted on a loan that is secured against their property, the lender can apply to the court to have the property sold, in order that they can recover their money. Now, many people have taken out these types of loans, rather than re-mortgaging their properties, to fund lifestyle purchases, extensions, cars and so on. Therefore, irrespective of the good intent of the mortgage companies or the government, their plans are at risk by the actions of any third party with a second charge. But there is something else that I believe is far more scandalous and that is the way lenders who have provided unsecured loans can seek to get a charge on a borrowers property, let me explain.

The borrower takes out an unsecured loan from a credit card company and subsequently default. If the card company believes that it will cost more to service or collect the debt than it is worth, they will often sell on the debt to a specialist company than collects debts. These organisations often pay only 10-15% of the face value and may purchase hundreds of millions of pounds worth of bad debt. They then employ very aggressive tactics to collect the money. If these don’t work and the debtor is a homeowner, the debt collectors invariably apply to the court to have the debt secured against the property and in most cases, this application is granted. Now the debtor will have the loan and any associated collection, legal and court costs added to the original debt.

The courts are complicit in this whole process, given some debt companies literally ‘book’ a court for half a day to process these applications. What must be particularly galling for the borrowers, is that the costs associated with this application can add substantially to the original debt, in addition to which, the courts take no account of the fact that the original debt was unsecured and therefore, the interest rate that was charged at the outset would have reflected the lenders additional risk. Having successfully managed to secure the debt, these debt companies will now typically ratchet up the pressure on the debtor, often getting them to agree amounts that they simply cannot afford, which is, arguably what the debt company wants. Because once there is a default, the debt company can apply to the court to have the property sold and that is invariably what they do.

Now the government cannot deny knowledge of this common practice, nor the fact that an obscure 1925 law is being used to achieve the objective of the debt management companies. Gordon Brown was asked about this very issue during his monthly meeting with the press and chose to ignore it, by repeating what the government were doing to help mortgage holders rather tha the legitimate issue that was raised. Yet, for a man that likes to legislate for anything and everything, he did not grasp the nettle and suggest that the government will look to repeal the legislation being exploited by these debt companies.

Now don’t get me wrong. Everyone must be responsible for their own actions and I do not believe in government intervention with taxpayers money, other than what is strictly necessary. But there is a need to distinguish between those that can’t and those that won’t pay. I have no sympathy for the latter. However, those that can’t pay should be treated sympathetically, they should not for example, have to endure the massive hike in the debt as a direct consequence of these debt companies taking completely unecessary legal action to gain security for the loan and/or a forced sale. The courts must be far more sympathetic to the borrower, for example, asking these companies what they expect to achieve by gaining security for what was originally an unsecured debt. Lets face it, unless the debt company intends to force a sale, or use the security as additional leverage, there is no point. No court should allow companies that have purchased unsecured debt, at 10-15% of its face value, to rack up the charges and costs and then secure the debt. Similarly, the government must urgently repeal the law that allows them to make this application, particularly in light of the assistance they are claiming to offer borrowers to minimise the risk of them losing their homes.

The bottom line, is that unless the government deals with this issue, then it can be reasonable argued that they are not serious about trying to keep people in their homes. Because someone that has taken out, for example, a credit card on an unsecured loan basis, could very quickly and quite easily find that they could be losing their home at the instigation of a debt purchasing company that has managed to secure the loan and by default, prevent the borrower from gaining any government support or assistance. These debt purchasing companies are making massive returns on their original investment and they are very effectively exploiting legal loopholes to put people out of their homes in order that they can get a quick return, in what is supposed to be contrary to the government stated goals. The debt purchasing companies are not acting responsibly and need to be tackled. Why, therefore is this government doing nothing to put a stop to it?

Members of Parliament and Honesty

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Have we all become immune to what MP’s do and say? In all walks of life, honesty and integrity are valued commodities and yet, when it comes to members of parliament, how often are we left wondering about what they are telling us? We should be entitled to expect, from those elected to represent us, the highest levels of honesty, integrity and candour. Not many of us can claim to feel enlightened or reassured after receiving utterances and platitudes from our members of parliament. Now, I know that not all MP’s seek to mislead and there are some that respect their positions, as well as their constituents and act with conviction, but there are all too many that do not, therefore, I do not apologise for choosing to generalise.

The terms ‘Right Honourable’ is supposed to mean something, a gentleman and man (or woman) of honour, but in recent years the term has lost its shine and, in my opinion its value. I am not just pointing the finger at the Right Honourable ladies or gentleman from the Labour party, we could also address the same issue at some of the previous administrations. However, for the time being, I want to concentrate on recent history, given New Labour has, arguably I accept, taken matters to a new level over the past 11 years.

Take Gordon Brown’s and Alistair Darling’s claim that our economy was better placed that virtually any other in the developed world, to handle and recover from a recession. In spite of the fact that this government has some of the best economic brains, albeit contracted in at great expense to the taxpayer, how could they not have known what the IMF knew? That in fact, we were likely to be the worst affected country by the world recession, at least in terms of the developed world.

Take for example, Gordon Brown’s world of economics. According to him, our national debt is 37% of GDP, against a figure of 44% in 1997. Before I deal with the reality, it is worth noting that in fact, it was actually 43.4% and as many will recall, we were actually coming our of a recession at that time. Similarly, GDP was considerably lower in 1997, than it is now, so percentages can be misleading if used in the right, (or wrong depending on your perspective) context. However, Gordon Brown has actually re-written the rule book, because for him, what is classed as government debt is different to what most other agencies, such as the Office of National Statistics and many other experts would accept.

For example, Gordon Brown omits from his figures the debts related to Northern Rock, Bradford & Bingley and Network Rail (the latter being £17bn). As if this was not enough, there are the long term liabilities related to the governments Private Finance Initiatives, estimated to total some £170bn between now and 2032. There is also, the unfunded public pensions deficit of £780bn. If all these figures were taken into account, conservative estimates have claimed that this deficit is equivelent to £76,000 for every single household in the UK. The fact that Gordon Brown has written his own rules does not negate the fact that these a very real liabilities, so the public must ask themselves why they are not included in the figures, as indeed, the ONS believe they should be?

Of course, if these debts were taken into account, Gordon Brown would also have broken his so called “golden rules” ages ago and his reputation for prudence would be in tatters. So is it vanity? Whatever it is, at best, Gordon Brown appears to want to dupe the public, lull us all into a sense of false security. Far be it for me to accuse Gordon Brown or anyone else of being dishonest, but I could, I am sure, safely argue that he has been a little economical with the truth insofar as government debt is concerned. Therefore, my question is, can he be regarded as a truly honourable gentleman demonstrating honesty, integrity and candour? Of course he is not alone, many would argue that Tony Blair was not completely frank with the public over the so called “weapons of mass destruction” that were supposed to be in Iraq, but of course, never existed.

Other members of parliament and cabinet ministers are also frequently guilty of a failure to answer difficult questions by side-stepping them or choosing to ignore them. This happens, of course, all of the time at Prime Minister Questions. Yet MP’s are elected officials, answerable to the electorate, therefore we are entitled to honest answers to direct questions, anything less is not the action of an ‘honourable gentleman’ or ‘honourable lady’. Once again, I cannot accuse every member of parliament of being guilty of a failure to act with honesty, integrity and candour at all times, equally, I would not have the time, certainly in my lifetime, to name all of those MP’s that genuinely do have a question mark over the comments and actions. Perhaps I would find it more acceptable if the were not referred to as ‘honourable’ or ‘right honourable’, because that tends to suggest that they have much higher standards than my own. But whilst only being able to speak for myself, I can say, with all honesty, that I have much higher standards, than many of these honourable ladies and gentlemen, as do many of my friends and colleagues.

I am sure when new members of parliament are first elected, they have for the most part, genuine and sincere intentions, but it doesn’t seem to last long. As soon as members of parliament join the club, they seem to remove themselves from the real world, their views of their constituents appear to be to change, now they are just “people”. Those that are members of one of the main political parties are no longer entitled to act independently, instead they must toe the party line. How can that benefit local constituents? Once someone has been elected to parliament and becomes an MP, they join a very exclusive club, with just 648 members. This seems to go to their heads, as does the way in which people address them and elevate them, to many this changes their perspective and the role, or more accurately the title, becomes all encompassing. Quickly forgotten are the ‘people’ that elected them to this position.

In my view, many of our MP’s believe that it is a game, perhaps a game of cat and mouse, between the MP’s and the public, MP’s and the press and of course, MP’s and their opposite numbers from other parties. It is, for all intents and purposes, a theatrical production, parliament’s version of Eastenders! Take PMQ’s for example, how often have we heard a carefully placed questions from, for example, a Labour party MP, which allows the prime minister to preen his feathers and tell us how much he has done for us? How often have we heard David Cameron ask the prime minister a question? Gordon Brown doesn’t answer the question and he is let of the hook by the leader of the opposition. Why, are we all being played here? It certainly feels like it.

How often have you watched a government minister get a “grilling” and asked yourself why certain questions aren’t being asked, or why the minister has been able to get away with avoiding the original question? The truth is, in many, but not all cases, the minister already knows what questions are going to be asked, or they have placed certain questions off limits. In addition, there are for example, many ministers who will only be interviewed by certain interviewers, this is because in their constant game of cat and mouse, each party needs the patronage of the other. A minister doesn’t want to be treated too shabbily and the interviewer, wants to have as many ministers as possible on his or her programme. They win, we lose!

The bottom line is MP’s are very much a law unto themselves. They vote on their benefits, salary, pensions and expenses. The golden rule seems to be, don’t get caught, not don’t be naughty. They have their very own parliamentary committees, membership of which, is often as a reward for some political favour or other, or perhaps a shortcut for a knighthood or place in the House of Lords. Even the parliamentary standards committee is, in effect, another club acting like stewards rather than policemen. In many cases, MP’s are guilty of hypocrisy of the highest order. Take for example expenses, whilst the rest of us have to submit receipts for everything we buy in the course of our business, they do not when it is under a certain value, because they are seen as honourable. The amount of course, has recently fallen. Other expenses that MP’s can claim include kitchens, furnishings, rent on a second home etc., many of these items would be considered a ‘benefit in kind’ to me mortals like us and therefore, we would be taxed on the value. Not so members of parliament.

Our MP’s can work the system if they wish, to maximise the allowances permitted for a second home, for example, they get to choose which home is their principal place of residence. They can decorate them, furnish them and claim other allowances, that mere mortals like the people that actually elected them, could only dream of. Now, I accept, that MP’s salaries are not particularly high, but it has to be said, most  MP’s would claim it is a vocation, they want to make a difference, that they are not doing it for the money etc. However, a system that relies on every member being honest, is subject to abuse, particularly given disciplinary action if any, is only normally taken if they are found out, as I have already stated, this game of cat and mouse.

In another example of the hypocrisy demonstrated by our members of parliament, take the databases that they insist we must be included on, you know…. what we do, what we say, where we go, our medical history, what our children do, our DNA, who we call etc., it doesn’t apply to MP’s because of the “security risk”. Don’t worry about us, the destruction of our civil liberties, our right to privacy and freedom of speech, so long as MP’s are exempt, that is all that matters.

Now I accept that this posting takes a very cynical view at our members of parliament, but that is how I feel. In a world where we are constantly told that we should all be treated equally, that we must not be subjected to any form of persecution, I feel persecuted, by the very people elected to represent me. I feel they are taking me and everyone else as a mug and I don’t like it. I believe that they are supposed to act with the utmost honesty and integrity, that they must remain answerable to the electorate throughout their period of office and if they are found to have misled or lied to the public, they should be stripped of office, no matter what position they hold. Why, because they are supposed to be honourable, they are supposed to represent everything that we hold dear and yet may of them, would not be fit to wipe our boots. If our members of parliament cannot be sincere, honest and act in the interest of others instead of themselves, what type of example are they setting the rest of us?

Little wonder that so many people feel so disenfranchised with politics, the fault lies firmly with those members of parliament and more specifically those cabinet ministers that treat the public with disdain and contempt. Those that fail to act honourably, but feel the art is not getting caught with your pants down, those that fill their own pockets, whilst emptying ours. Those that fail to accept any form of responsibility when something goes wrong. Those that say one thing and mean another, those that provide executive summaries to sell policy, yet seek to remove our liberties, rights and/or money in the small print. Above all, it is the fault of those members of parliament that think they are better than the rest of us, those that believe their own publicity machine and those that would readily, willingly and consistently take advantage in that most cynical of ways of the very people that elected them into a position where they could be described as honourable.

The folly of a reduction in VAT

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Suggestions by so called experts and hints by Gordon Brown that the proposed tax reductions will take the form of a VAT reduction will be a complete waste of time. Whilst I accept that Gordon Brown may want to adopt his usual smoke and mirrors approach to how much a tax cut is worth, no-one will believe him, with some justification. A cut in VAT is a reduction in a consumption tax, this will not make people feel as if they have more money in their pocket, instead, they will just feel that their money goes a little further on some vatable items, which excludes groceries, utility bills etc.

By way of an example, a £50 item with VAT charged at 12.5% instead of the current 17.5% would see a reduction of just £2.50, assuming that retailers and traders do not use the opportunity to shore up their own margins. Would this be enough to get people into the high streets spending their money, I think not? Retailers are giving far more away in so called special offers. But from Gordon Brown’s perspective, he can hail it as a massive giveaway, given he is prone to use an over simplistic, almost child-like set of sums, that allows him to maximise the value of a tax breaks, even in the full knowledge that the impact on government finances would be a fraction of the number made public. We have seen this time and again in his budget speeches, anyone remember the 10p tax debacle?

If any package is going to work, then the public need to know that they have more money in their pocket, it would be a hard sell in the current climate to convince people that their money will simply go further. In addition, this is one of those occasions when Gordon Brown must not try and bulls**t the public, nor should be tinker with taxes, it needs to be a bold and dramatic cut in direct taxation, something in the order of a 5% reduction in direct taxes. Anything less is doomed to failure and as anyone with half an ounce of commonsense knows, a delay in a period of such a significant loss of confidence and economic downturn will lead to a prolonged recession or require a much larger cut in the future.

Much is being said about how to pay for the tax cuts. Well there are any number of government projects and initiatives that could be curtailed or cancelled which need not affect education or health services, a good start would be to look at the vast sums being spent on information technology projects, with highly questionable returns. That notwithstanding, the government has no choice, they must give the economy a boost, irrespective of what it does to the short-term finances of this country, one thing is for sure, other developed countries will, in spite of Gordon Brown’s suggestions, not because of them.

However, the government must not stop at personal taxation, they also need to look carefully at small business. This sector has been severely affected by the downturn, in terms of less business, slower payers and bad debt provisions. Given the SME sector employs some 12.5m people, it is self-evident that many will be struggling given the tax on employment (NI) and tax on business (business rates) that the government use to punish enterprise. They will need a package of measures which includes, but should not be limited to, a reduction in business rates and the reversal of employers NI contributions for those that employ 10 people or less. Given many will struggle to make a profit, there is little point, at this stage, in reducing corporation tax, although is has to be said that Brown’s recent increases in corporation tax for small business, does not encourage entrepreneurship, so much for being business friendly.

David Cameron is due to provide his suggestions for tax cuts today, but given he is not in government, I doubt that will make much difference to our everyday lives.