Budget Day 50


We all wait to see what the budget has in store. This is less fun than it used to be, as it has been heavily trailed that the personal tax allowance will be raised by £1,000 as a first stage towards lifting a very significant number of people out of tax altogether, and improving the work/benefit incentive. That is a good thing.

The banking levy will be another good thing, but far better would be a transaction tax that penalises continual speculative trades. Capital Gains Tax increases are likely to be watered down to protect wealthy tories with second homes. I fear we will see punitive duty increases on alcohol; only the wealthy are to be allowed to get drunk. But I am uncertain where the tax rise required is going to come from, if neither the basic rate of income tax nor the rate of VAT is to be increased.

I fear we may not get a great deal of detail on the cuts until the public spending round in the autumn, though we should get headline figures today, which will be helpful.

I very much favour public spending cuts. I am unabashedly ideologically committed to a major reduction in a role of the state. So I am more than happy to see an early hack at it. Of course the things I would immediately cut are not going to be cut. My main concern is that the legitimate redistributive role of the state is not weakened.

Some ideas of what I would do:

Cut Trident, aricraft carriers, nuclear submarines, end the Afghan War immediately.

Cut all local government salaries over £28,000 by 15%, with a phase in mechanism at the margin.

Make everybody in local government earning over £50,000 immediately redundant.

Freeze all civil service incremental pay scales.

Set an automatic civil service pay mechanism: annual salary increase = rate of economic growth plus inflation minus 0.25%. Backdate the formula to January 2007 and adjust salaries accordingly.

Cancel all PFI projects immediately without compensation. Pay only assessed construction cost to date.

Cancel all operating PFI schemes without compensation. Pay assessed construction costs plus interest minus PFI payments made.

End all government arts spending and close the British Council.

Replace incapacity benefit with a single needs assessed welfare payment to all unemployed people, regardless of why they are unemployed.

End all internal market procedures within the NHS and the rest of the public sector.

Institute a civil service and local authority recruitment freeze for three years.

Means test all state payments including basic old age pensions and child benefit.

Sadly the budget won’t be nearly this exciting. What would you like to see?


50 thoughts on “Budget Day

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  • angrysoba

    “End all government arts spending and close the British Council.”

    Why close the British Council? Does it not provide jobs? Does it not bring in revenue? Does it not present a benign and friendly face of Britain?

  • angrysoba

    And doesn’t the government also subsidize museums that allow us to see masterworks of art FOR FREE? Does it not also help struggling artists? Does it not provide a small fund for writers? And doesn’t the LRB also get a small grant to help with its running costs?

  • ed

    I would axe income tax alltogether.

    Only have tax on wealth and profit.

    I would get rid of all the banks and have just one bank.

  • somebody

    This post sounds like a rehash of Cleggover’s message to the LD troops. ‘You won’t like it but it is necessary stuff and other such rot.’

  • MJ

    I agree with angrysoba. We benefit in many ways from the tiny arts budget.

    I agree with most of Craig’s other proposals. I would however be much more robust regarding banks. Nationalise them, default on the notional toxic debts, merge the BoE with the Treasury and stop borrowing money when, as a sovereign nation we can just print our own.

    End unemployment benefit and replace it with a job guarantee scheme paying the minimum wage.

  • fluellen

    Abolishing government art funding would mean abolishing a lot of high quality artists.

    We need more art not less.

    To send light into the darkness of men’s hearts – such is the duty of the artist. ~Schumann

  • Neil Barker

    “End all government arts spending and close the British Council”

    Good God! I thought only old-fashioned Thatcherites like me could contemplate such an excellent, common sense move! I am impressed.

    What are PFI projects?

  • Neil Barker

    “Why close the British Council? Does it not provide jobs? Does it not bring in revenue? Does it not present a benign and friendly face of Britain?”

    It’s about as benign as the parasitic NGOs that wreck so many developing countries – you have to be there to see it happening.

    And no-one should take hard-earned wages from hard-working, low-paid working class people, against their will, to fund operas and ballets and plays that these guys have no chance of seeing, ever.

    Of course all benefits should be means tested. How can anyone possibly justify them otherwise?

  • Paul

    How about areas where the government might save money by employing *more* people not less?

    I’d set up an expert group of I.T. and communications people to review all government spending on I.T. projects. Their findings should be published widely and publicly. They should be government employees and in no way associated with any company bidding for I.T. work.

    The last government launched implausible, vastly under-costed projects of debatable benefit, with apparently no reference to reality at all. These projects were parasitic on the public purse driven by overpaid ‘yes men’ consultants.

    This needs not to be repeated by the coalition, either now, or later when the squeeze on funding is less tight.

  • Mark Golding - Children of Iraq

    —————- SCREWED —————-

    Poor people

    Disabled people

    Young families

    Single mothers

    Liberal Democrats

    ————- 70,000,000,000 ———–

    of your money to rescue the greedy banks

    ————- 1,300,000,000 ————

    of your money to pay for bad management

  • carl

    Craig.

    Means testing is not only (like performance-related pay) a pretext for cuts. It also undermines the dignity and incentives for the poor to get out of poverty. It increases public sector admin costs and creates poverty traps. Always has done. Always will.

    And what do you think this government is going to do with all that financial asset data it gathers through means testing? Can you count on this government not to put it to other uses not remotely connected with social security?

    If your only justification for means testing is that you havent the stomach for income tax, VAT or other tax rises then maybe you need to look for other options.

    All the rest of your ideas look okay, especially on PFI.

  • angrysoba

    “It’s about as benign as the parasitic NGOs that wreck so many developing countries – you have to be there to see it happening.”

    Pfffft!

    “And no-one should take hard-earned wages from hard-working, low-paid working class people, against their will, to fund operas and ballets and plays that these guys have no chance of seeing, ever.”

    Oh, and don’t close down the libraries with or without which Neil Berker can’t even read a book.

  • brian

    Brilliant manifesto Craig, I didn’t notice any detail on public sector pensions, maybe I dropped off for a minute, but I’d end final salary pension schemes in the public sector and limit contributions to a level similar to that typically received in the private sector.

  • sandcrab

    “Of course all benefits should be means tested. How can anyone possibly justify them otherwise?”

    If we had a universal benefit given to every person covering minimal living allowance (every person does deserve the means to live on?)…

    , Work would then not need done to means test for living allowances.

    , There would be no need to enforce a minimum wage (lots of new business could become viable from this)

    , There would be less motivation for criminal endevours.

    The current testing for the means to live, is expensive, innacurate can be abused and mistaken. It has an effect of marginalising people, some of whom remain so, in a strong cultural/psychological trap.

    So to just give the safety net to everyone and reclaim it with taxation would be more efficient, fair and culturaly and psychologicaly effective.

    It would take a few years to phase in.

    There is a theoretical value of the work and invention done throughout history by people who did not recieve payements and ongoing patent royalties, which could be used to establish the capital origins of a universal benefit fund.

    The greatest fear is that if everyone only did the work they felt like, telemarketing and such would become uneconomic. I dont actualy subscribe to the idea that people left to their own motivations which choose idleness and squalor over action and creativity.

  • Clark

    Craig,

    I like your budget. I’m not sure about the arts / British Council bit. Suhayl?

    Paul,

    Yes! Hire programmers to implement our IT. Stop buying insecure proprietary software that requires depressingly frequent replacement of hardware. Implement our own public sector IT systems based upon community developed software. Sell the resulting systems and support expertise in competition to the big software companies instead of constantly paying out to them.

  • Sam

    Ending non-domiciled status.

    Ending all offshore tax avoidance schemes for companies and individuals.

    And when ‘high wealth individuals’ start bleating about leaving the country, offer them free one-way flight to the Cayman isles in return for their British passport.

  • ingo

    sandcrab, this universal benefiot is a green party policy. Every one gets just enough to live on, for their extra pleasures and extravagancies, that little extra luxuary, one has to go to work and pay taxes.

    Such universal basic wage would scrap all other benefits, nobody bar those with special needs and disabilities would get multiple benefits.

    Savings in administartion would be immense.

    I like your budget Craig, how about spicing it up by saving some of our reps as well. 400 MP’s should sufice, equally, less services for us should mean less civil servants looking after those services.

    Norfolk still has 51 double dipping district councillors who also get expenses as county councillors and have a job and a family life, apparently.

    Should we not be concerned with their stress levels? too many jobs to do? should council chiefs be concerned with overworking councillors?

  • amk

    The Nimrods are much more ripe for scrapping than carriers. They’re based on an air frame that first flew in 1949. All the planes are old, obsolete and no-one else uses them so there are no economies of scale for maintenance.

    http://www.theregister.co.uk/2009/09/14/nimrod_mra4_prod_variant_first_flight/

    The biggest part of the cost of carriers are the aircraft. By saving a few quid not installing catapults and arrester wires STOVL aircraft are needed that are inevitably more expensive to purchase and maintain, and would cause serious problems with launching airborne radar.

    There was a story in the Telegraph that the MOD was considering navalising the Typhoon and redirecting some of the excessive numbers on order to carrier duty. This would both reduce the number of aircraft needed and give one fewer system to maintain, thereby helping maintenance costs. The Rafale and the Super Hornet are viable off-the-peg options, as is the conventional F35.

    Note that the French are building a carrier of the same type with catapults from which they will operate Rafales.

    The A400M transport is pretty dubious too. Many years late, massively over budget.

  • craig

    amk

    But who do we have to fight which requires state of the art aircraft? Is there any potential enemy of the UK out of home area that the old harrier couldn’t deal with?

  • angrysoba

    “But who do we have to fight which requires state of the art aircraft? Is there any potential enemy of the UK out of home area that the old harrier couldn’t deal with?”

    Besides, Lee Enfield rifles should see off any potential invader.

  • Anonymous

    Chancellor George Osborne has said he “reserved the right to come back at any time to adjust this budget”, he will. The global financial crisis is just starting and he knows that, it is on the brink of total collapse.

  • Richard Robinson

    sandcrab – “I dont actualy subscribe to the idea that people left to their own motivations which choose idleness and squalor over action and creativity”

    Ditto. But there would need to be some kind of mechanism by which people could find their way into organisations, though; not everything can be done by individuals on their own. Much rearrangement.

    re: aircraft carriers. The “War Nerd” is, er, amusing on the subject – http://exiledonline.com/the-war-nerd-this-is-how-the-carriers-will-die/

  • ingo

    Absolutely right Craig, Who in the 21st century would bother to attack the UK with thermo nuclear weaponry without attacking themselves?

    Especially in Europe, who are our enemies in a Europe that has lived peacefully for decades, well largeley?

    During the cold war the Force de Frappe was pointing eastwards, targetting east german surface to air batteries and the Fulda gap, what are they positioned on today one might ask?

    We could easily loose one of the aircraft carriers on order. Trident was obsolete a long time ago and can be easily dispensed with.

    Looking at the development of indiscriminate drones and the country that invented and used it first, I predict that much smaller, adjustable nuclear charges will soon be operational for this weapon system and be used by them.

  • Anonymous

    I’d implement a proper whistleblower protections and also an equivalent to the Tax Payers Against fraud http://www.taf.org as in America.

    Get rid of all bonuses in Civil Service

    Amalgamate pay barganing, HRS function to one coherent policy

    May pay scales in line with PM salary.

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