BBC armageddon bollocks

Apparently, the Buttered New Potato told Nick Robinson that he was going to close down the BBC.

Mr Robinson said that while travelling on the bus, Mr Cameron dismissed a BBC story claiming that he had told Nick Clegg that the Tories would not win a majority as "rubbish" before adding: "I’m going to close them down after the election."

Mr Robinson yesterday told The Guardian: "What really matters is the impact it has on other people. Some people on the bus regarded it as funny but they generally didn’t work for the BBC. The people who did [work for the BBC] regarded it as yet another bit of pressure...

Oh, diddums.

... and a sort of sense of 'don’t forget who’s boss here'."

Hey, Nick—you know how you could really ensure that Dave couldn't say 'don’t forget who’s boss here'?

Yeah, that's right—by not using the law to force people to pay the Licence Fee. In this way, the government need not be your boss at all. Do you see?

So, unless you're going to do the decent thing and stop stealing people's money by force, might I recommend that you shut your hole?

Cheers.

Actually, the poor did cause it

Caroline Lucas: demon.

It is raining hard right now, and this makes me happy.

Why?

Because it will hopefully ensure that the "tens of thousands" of people marching against "austerity" have a thoroughly miserable time.

The protest is expected to draw 75,000 people according to its organisers who are a broad coalition of left-wing political groups.

It began outside the Bank of England at noon followed by a march to Parliament Square where a rally is expected to take place from 2:30pm until 5:30pm.

Damn. It looks like all of these brave Social Justice Warriors will have already been in the pub, drinking expensive cider before the rain really hit. So, it seems that your humble Devil will have to derive his satisfaction by sitting here (armchair warrior that I am) and mocking them instead.

So, no doubt a number of publicity-seeking slebs will be there—who has deigned to walk with the great unwashed, I wonder?

Among those better known faces attending are comedian and activist Russell Brand, Guardian journalist Owen Jones, singer Charlotte Church, Unite general secretary Len McCluskey, Green MP Caroline Lucas, and Labour leadership contender Jeremy Corbyn.

Charlotte Church? Marching with an estimated 75,000 people? Gosh.

A couple of weeks back, on Facebook, I urged Charlotte to heed her own advice and pay more tax.

Dear Charlotte Church,

I think that it's lovely that you would be happy to pay 70% tax (albeit with provisos). However, I suggest that you make the first move, and send all of the extra tax to:

The Treasury,
1 Horseguards Road,
London.

You can tell those nice mandarins what budget you'd like the money to go to, and we can see how generous you've been.

Further, I am very much looking forward to the Treasury's coffers being boosted by the similarly generous contributions of all of the people who will be joining you on the anti-austerity march.

If they all follow your example and pay tax at 70% for the rest of their lives, I am sure that the government will be able to support poor people much more generously.

Thank you in advance—you are a true philanthropist.

Regards,

c

Alas, Ms Church back-tracked somewhat—she said that, even if she did pay extra, it really wouldn't sort anything out. Rich though she might be, her donation would be barely enough to keep the government running for more than 5 minutes.

But, just think, Charlotte: if only you were to stand up at this march and urge these kind socialist souls to join you in paying more—perhaps you and the 75,000 could raise meaningful amounts of money, year after year. A few days later, the Spectator embraced the suggestion—even being considerate enough to urge the Treasury to make it easier for these rich people to donate their cash.

At the end of our tax returns, we declare how much tax we owe. Osborne can introduce a new line in the tax return saying: if you think this isn’t enough, how much extra would you like to pay? People like Ms Toynbee and Ms Church can then fill in the extra so they can pay 50 per cent, or even 70 per cent, if they like.

This ‘nudge’ tax reform would be consistent with the liberal principles of a Conservative government while allowing left-wingers to act along with their conscience and hand over more of their income to the government.

So next time, rather than complain that they would be happy to pay 70 per cent tax, such people can proudly claim that they do pay 70 per cent tax. And they will have the tax return to prove it.

The Speccie even has the decency to address Charlotte's complaint that paying more tax would make little difference.

Those saying that this voluntary tax would not make much difference are mistaken. The US runs this a similar (here) and under Osborne a huge share of the tax is drawn from tiny number of people. The best-paid 1pc now contribute 27pc of all income tax. The top 0.01pc pay 4.7pc (an average £2.6m each). The Charlotte Churches of our country – the 1 per cent, if you will – have never shouldered a greater share of the burden. So if she volunteered to shoulder an even larger share, it really would help bring an earlier end to austerity.

This change, alongside Charlotte Church's fine example, really could make a difference—at least 75,000 people putting their money where their mouth is, and actually paying more tax. How heart-warming.

Of course, all of this does rather assume that these protesters are paying any tax at all. I would bet that a pretty hefty chunk of them are, in fact, nett beneficiaries of the state. Apart from anything else, a great many of them are almost certainly students, complaining that "austerity" is restricting the frequency of their ski holidays or something...

But hist! Who is this grinning loon, her evil shark-like eyes darting amongst the crowd? Why!—it is that bastion of barminess, Dr Caroline Lucas MP! Hooray for the good doctor (of Elizabethan literature)—lang may her lum reek, as they say in Scotland (apparently). I wonder what words of wisdom will drop from her lips...

Green MP Ms Lucas, who held onto her Brighton seat at the last general election, has spoken to packed crowds in Parliament Sqaure: "This Government is continuing to punish the poor for an economic crisis they didn't cause.”

Well, this is a bit of a problem, isn't it? I mean, I don't want to be indelicate, but it is precisely the poor who have caused this "economic crisis".

After all, the trigger for the banking crisis was people who walked away from mortgages that they couldn't afford to pay. A great many of these people were... well... "the poor". (Especially at the point that they couldn't afford to pay their mortgage.)

For sure, this was exacerbated by over-leveraged banks trading mixed assets and, yes, in the UK we did bail out the banks. But we did, at least, bail them out by buying shares: and selling these shares (and sundry others charges to the state) will, in fact, make an estimated £14 billion profit for the British taxpayer. In fact, the government has been profitably selling Lloyds Bank shares for some months now.

But the "economic crisis" was exacerbated in the UK by the fact that the government was already running a pretty hefty structural deficit all through the boom years. And what was the largest part of this spending? Why—supporting "the poor", of course.

And, of course, the Coalition and, now, Tory government has also been massively over-spending too. And who are the main recipients of this money? I'll give you a clue, Caro—it's not "the rich" because they don't need it.

What? Yes, that's right, the main recipient's of this cash are "the poor"—'cos that's how redistributive welfare works, y'see.

When looked at it that way, Caroline, the poor are, in fact, the primary cause of this particular economic crisis. I know it sounds harsh but it is, from this perspective, actually true.

So, I'm sorry, Caroline: on this—as on every other topic on which you offer your utterly valueless opinions—you are wrong.

Bad show—better luck next time, old girl.

Now don't let the door hit your scrawny arse on the way out, will you?

UPDATE: Obo the Clown highlights some more rampant stupidity from "doctor" Lucas.

76% didn't vote for this Govt - Osborne has no mandate for austerity. He wants to shrink state not cut deficit #EndAusterityNow #JuneDemo - Caroline Mucus

That's lovely, Cazza, but as was immediately pointed out to her, 71% of the people in Brighton Pavilion didn't vote for her, so is she going to resign out of principle?

She really isn't very bright, is she?

UPDATE AGAIN: Longrider's final comment might be the most pithily offensive I've seen today.

Hundreds have gathered with placards reading “No cuts” and “Stop Union Busting” and celebrities such as Russell Brand and Charlotte Church have joined protesters on the street.

Oh, right, Britain’s finest brains, then.

Heh.

The SNP: timely as ever

One might almost believe that the SNP were eagerly monitoring the Kitchen, alert for any sign of the guidance that your humble Devil (as a former resident) might offer these benighted politicians.

Just a few hours ago, I pointed out that the Scottish Parliament had the opportunity to test the Scots' social conscience by means of access to their wallets...

The supposed driver for this is that Scotland is a "more socialist" country, willing to pay more tax in order to stave off the tyranny of austerity. This narrative is, of course, bollocks: were it not, the SNP (also the dominant party in Holyrood) would already have used the tax-raising powers that the Parliament has—up to 3p in the pound extra in income tax, if I recall correctly.

And now, in the face of further cuts from Westminster, it seems that the SNP—now dominant in both Westminster and Holyrood—are flinging up their kilts and showing everyone what big balls they have.

John Swinney has admitted he is “considering” increasing income tax in Scotland next year to fill the gap in public spending from cuts by the Tory UK government.
...

ollowing a summit in Whitehall with Chancellor George Osborne, the deputy first minister said that he could be prepared to use powers handed to Holyrood from the 2012 Scotland Bill to set a Scottish income tax rate above that of the rest of the UK.

An increase of 1p in income tax north of the Border would, according to the Scotland Office, raise £330 million for the Scottish Government.

How exciting—let us see how keen the Scots are, indeed, to show how they are different to the UK. Oh, wait...

The move has echoes of the SNP’s “penny for Scotland” in the first Holyrood election in 1999, where they lost heavily to Labour after proposing to raise income tax.

Not so keen then.

But, given their earlier failure, what has driven the SNP to contemplate this dreadful message (apart from the fact that, politically, they have the people of Scotland in a double headlock)?

[Swinney] went on: “The cut of £107m is substantially lower than the UK government’s original estimate but is still too bitter a pill to swallow.

“This comes on top of an overall budget cut of 9 per cent since 2010, including a 25 per cent cut to the capital budget.

“It is completely unacceptable for reductions to be imposed in this financial year to the budget that has already been agreed by the Scottish Parliament.”

Ah, no: this is what happens when you have relied on an overly generous relative for many years—and that relative runs out of money. It doesn't matter what plans you may have made: said relative simply cannot pay for them.

So, unless you are going to get off your fat arse and fund those plans yourself, you must alter said plans.

Mr Swinney also made it clear he told Mr Osborne that he “does not have a mandate in Scotland”, with the Conservatives winning just one seat and suffering the lowest proportion of votes since 1865.

Yes, Mr Swinney: but, equally, that means that Mr Osborne has precisely nothing to lose by slashing Scotland's budget to ribbons, and sending the savings to places where the Tories might actually win more voters, e.g. almost anywhere in England (or even Wales or Ireland).

But the threat of an increase in tax was condemned by the Scottish Conservatives, whose leader Ruth Davidson has made a pledge that her party would try to block tax rises in the next parliament after the Holyrood elections.

A spokesman for Ms Davidson said: “The new tax powers for the Scottish Parliament should not mean higher taxes for the Scottish people.

Why not? If the Scots want increased public services and less austerity, why should they not pay for it?

“The Scottish Conservatives have pledged to ensure that taxes will not be higher as a result of the devolution of these powers.

“There is no reason why John Swinney should not be able to issue the same assurance to families and businesses in Scotland.”

Well, apart from him actually being in power—and having to make some derisory effort to balance the books. Apart from that, Ruth.

But what about the oil, eh? Well, as chokkablog points out, this is not really going to help that much.

Three times in the last 15 years the oil tide has risen high enough to submerge the underlying £1,700 per capita deficit difference and give Scotland a lower deficit than the rest of the UK. When the oil tide flows out we can see more of that underlying £1,700/person deficit difference, we see more of the £9.1bn.

So let's take a closer look at the oil figures.

For Scotland to cover the underlying £9.1bn deficit gap we need total North Sea oil revenues of £10.1bn (because c.90% of North Sea oil revenues are attributable to Scotland).

And the projections for the next few years are nothing like £10.1bn: in fact, for 2015–16 oil is likely to raise just £600 million—short by £9.5 billion. That's rather more than 10% of Scotland's GDP.
John Swinney must be pretty desperate to even consider increasing income tax in Scotland.

If the SNP do get full fiscal economy, the man will probably shit himself.

And with good reason...

Freeman by name; ignorant, illiberal prick by nature

George Freeman MP—who is, apparently, some kind of minister for the life sciences in this exciting new Tory government—has been spouting some ignorant bullshit at the Hay Festival.

Mr Freeman told an audience at the Hay Festival that it was clear that sugary drinks and snacks were behind the worsening obesity epidemic in Britain. “I don’t think heavy-handed legislation is the way to go,” he said.

Well, that's very kind of you, Mr Freeman. It's a great pity that the "obesity epidemic" is, by and large, a load of old bollocks—with researchers predicting some kind of lard-arse armageddon that has, consistently, failed to materialise (a bit like climate change, really).

But George thinks that it is a crisis and—perhaps whilst he was obtaining his degree in Geography—it looks like he once heard someone explain Pigou taxes.

“But I think that where there is a commercial product which confers costs on all of us as a society, as in sugar, and where we can clearly show that the use of that leads to huge pressures on social costs, then we could be looking at recouping some of that through taxation. 

“Companies should know that if you insist on selling those products, we will tax them.”

George's trouble is, of course, that we cannot "clearly show that the use of [sugar] leads to huge pressures on social costs".

What we can show, in fact, is that calorie consumption has fallen rapidly throughout the century—to the point that the average adult's intake is now below the recommended intake during war-time rationing.

The human body, as an energy machine is pretty simple: if you burn more calories through activity than you consume, then you will lose weight—and vice versa. And given what we know about these two factors (neatly summarised in this excellent IEA monograph by Chris Snowdon), there really can only be one conclusion:

• All the evidence indicates that per capita consumption of sugar, salt, fat and calories has been falling in Britain for decades. Per capita sugar consumption has fallen by 16 per cent since 1992 and per capita calorie consumption has fallen by 21 per cent since 1974.

• Since 2002, the average body weight of English adults has increased by two kilograms. This has coincided with a decline in calorie consumption of 4.1 per cent and a decline in sugar consumption of 7.4 per cent.

• The rise in obesity has been primarily caused by a decline in physical activity at home and in the workplace, not an increase in sugar, fat or calorie consumption.

So, once more we are forced to wheel out the Polly conundrum: is George Freeman MP ignorant or lying?

The Left: an utter failure of personal responsibility

Over at Forbes, Timmy has written an article about the difficult decision facing Greek PM, Alex Tsipras.

The general view is that the Greek endgame is coming ever closer.
...
The troika is insisting that Greece must not lower the pension age and also must liberalise some more the labour market. Syriza, seeing itself as the sort of left wing party that just doesn’t do those sorts of things is refusing: thus that red line argument. And it is fair to point out that Syriza are the democratically elected government and they were elected on a platform of not doing those sorts of things (or, in fact, those two specific things). 

But as I’ve pointed out before what you do with the money of the citizens who voted you in is one thing. Demanding to be allowed to do the same thing with money you’re borrowing from others is rather different. And if Greece is going to make the payments it needs to in the coming months then it needs that last tranche of that loan. But the troika refuses to hand it over while Syriza is threatening to do what it was elected to do.

Certainly, it's going to be interesting to see what happens—especially as the consensus seems to be that:

• the Greeks do not want to submit to the troika's demands;
• the Greeks can't pay their creditors unless they do submit to the troika's demands;
• the Greeks want to remain within the Eurozone.

Or, to put it another way:

1. the Greeks want all of the trappings and benefits of a massive, Leftist state that will allow them to sit about doing nothing much all day;
2. the Greeks don't want to pay for it through their taxes and, indeed, will avoid them where at all possible;
3. the Greeks want to remain within the Eurozone.

At least one of these things will have to change. Unless, of course, some miracle comes along (very unlikely). We live, as they say, in interesting times.

Anyway, the point that I really want to make is related to #2, above, i.e. the Greeks don't want to pay taxes and, indeed, will avoid them where at all possible. Now, many people will be outraged that I might suggest such a thing—except, perhaps, when I point out that a great many Greeks simply stopped paying tax at the end of last year in anticipation of a Syriza win.

Faced, as he is, with this tension between keeping his promises or keeping the Greek state solvent (for a little while), it would not be entirely unreasonable for Alex Tsipras to say:

"Look, chaps: I did my best to stand up for the interests of the Greek people. But the trouble is that, at the first possible moment, the Greek people simply didn't bother paying tax. 

"Because of this, we have no other options: either we give in to the demands of the troika, or we exit the Euro (which won't solve much, but will get the Germans off our backs)."

He could then hold a referendum—but I doubt that the Greek state can afford it.

Anyway, the point is that the Greeks want lots of stuff, without actually reaching into their pockets to pay for any of it.

Which is, as we saw after the recent General Election, very similar to the Left in this country.

My various feeds were full of idiots wailing and gnashing their teeth, talking about how all the poor people were going to be put down and fed to the myriad urban foxes. Or something.

A great many of them were complaining about how the poor were to be denied their benefits.

So to help out these poor souls—riven by grief and guilt about the poor—I decided to point out that they could help simply by reaching into their ample pockets. I helpfully pointed out that not only can they donate their time and money to charities, but they can actually donate money to the Treasury—and specify what budget they want their monies to go to!

So, if you are a Lefty scared of what will happen to the poor, simply send your cheque to:

The Treasury
1 Horse Guards Road
London

Just convince all of your left-wing friends to do the same—this surely won't be difficult—and you can help out those causes that you care about. And, best of all, you won't be using the threat of imprisonment to force other people to pay towards these causes.

As an extra bonus, everyone can check online to see who has generously donated this cash to these good causes, so that we can praise you for your generosity and civic decency.

Or, of course, call you a bunch of fucking liars when you say that you'd "happily pay more tax".

This is the very definition, I think, of the phrase "put up or shut up."

Of course, many people will say that your humble Devil is being a little aggressive about this.

"Come on, DK," they might say. "You're a politics nerd—you cannot expect everybody to know about this voluntary tax thing."

To which I reply, "well, these people think that they are qualified to elect a government—shouldn't they know how that government works? They are prepared to use the law to force people to pay money to the Treasury on behalf of certain interest groups—shouldn't they show willing first?"

But, apparently, that's the thing with Lefties: they're very happy to reach into other people's pockets, and very reluctant to dig deep into their own.

Who knew, eh?

Boycott!

So, the BBC has finally sacked Jeremy Clarkson from Top Gear.

Given how much money the programme makes for the Beeb, I would say that decision might be described as "courageous".

However...

Your humble Devil has sod all interest in cars^*, but I did rather enjoy watching Top Gear. I think, basically, because it was three chaps—mercifully free from the aching right-on-ness of most people these days—arse-ing about in colossally brilliant machines built by very clever human beings.

It seems that the other May and Hammond—in a decent British show of solidarity with a mate—will probably not continue with the programme. Good for them.

So, the upshot is that I think that the BBC are totally wrong to sack Clarkson. Totally and utterly wrong.

Thank goodness that I can boycott their output, withhold my payments and cancel my contract. And that's why I am calling for a...

I'm sorry—what?

Prison? For not wanting to pay for a service that I not only don't want, but morally disagree with?

Oh.

FFS.

^* I got banned some years ago, and have never bothered to apply for my licence back—despite the ban having expired two years ago (or more).

Quote of the Day

It seems that your humble Devil missed the sixth birthday of this blog, which occurred on the 13th of this month—still limping on!

Anyway, here's a quick quote of the day from Dumb Jon, regarding the Benefits Cap.

See, that's the penalty of basing your policy platform on appealing to a tiny slither of North London. You really do start to think that an income equivalent to £34K gross is the equivalent of Dickensian poverty.

Meanwhile, that creaking sound is one of the central pillars of the left's platform collapsing into dust. They've spent years telling everyone that the Tories are heartless. Now they've got to explain that by 'heartless' they mean 'opposed to taxing people with jobs so they can give some other people more for watching TV than most of the country earns working full time'.

Quite—it is an utter scandal. As far as I am concerned, this state of affairs simply isn't defensible in any way. And it seems that, according to Liberal Voice of the Year (by a massive margin) Mark Littlewood, the majority of the country agrees...

Only around 10% of the electorate oppose the principle of an annual cap on benefits. Approximately 80% support the cap being no more than £26,000 and about 60% think Iain Duncan Smith’s policies are, if anything, too generous.

However, I also think that the Tories are shying away from the most necessary reform—we must cease paying for the unemployed to have children.

If you would like to be kind about it—we don't want retrospective taxes, etc.—then you announce, very publicly, that nine months from now there will be no child benefit of any sort.

Obviously, the unelected and utterly irrelevant Bishops will kick up a stink but fuck 'em, frankly. We cannot afford to keep paying those who will not work to have children (preventing many of them working for another 18 years) who will then also not work—but who will beget yet more offspring who will also not work, and so on and so forth.

Stop all Child Benefits now (or in nine months)! You know it makes sense.

Anyway...

In the meantime, the massive piece of software that your humble Devil has been working on has just been through it's first alpha testing phase—and received an average score (from actual customers) of 4.5 out of 5. Needless to say, we are very happy!

We are now moving into beta and we should be finished, a little behind schedule, in mid-February. And then comes the challenge of the full release...

In addition to this, I have been inveigled into taking part in another Barnes Charity Players production—this time playing the irrepressible, and slightly sociopathic, Frank in George Bernard Shaw's Mrs Warren's Profession. This is already proving to be fun but, with the run starting on 20th of February (until the 25th), life is a little full right now!

Anyway, your humble Devil hopes to be a little more active around mid-February, although I shall attempt to post a little more frequently in between now and then.

Even should I fail to do so, I hope all of you have lots of fun in the meantime!

UPDATE: A Very British Dude opines on the Coalition's tactics here, and then finishes up with the kind of sentiment that the vast majority of the people in this country agree with.

The idea that an income equivalent to a salary of £34,000 "will thrust families into poverty" is absolutely abhorrent to the people who are forced, by the threat of expropriation and violence, to pay for it, people who are sneered at as "middle class". I would not be surprised if the Government quietly persuaded enough of its supporters in the Lords to stay away from yesterday's vote, to ensure a right royal battle on ground on which it is absolutely certain of the public's support.

Good luck, lefties, trying to persuade anyone that an income equivalent £34,000 a year salary is going to thrust anyone into "poverty". I suspect the Government is absolutely delighted to have this in the news for a few more weeks. "Labour wants to pay its voters more than you earn".

Quite.

Pilgrims

Jane Pilgrim: the face of union corruption and theft. And what a face it is...

Many despise Guido as a muckraker and a "bad" blogger: these allegations may be true, but your humble Devil has always found him rather entertaining (and thoroughly fond of a good drinking session).

And, let's face it, by certain measures—namely making money from blogging, and setting the government agenda—Guido is rather more successful than most of the rest of us.

One campaigns that I am fully behind is Guido's crusade against "Pilgrims"—union activists funded by the taxpayer and not by the unions themselves.

Eighteen months ago Guido was chewing the cud with a source who works in education in some Westminster watering-hole. Even after four Guinnesses, he still did not believe the story he was being told. Apparently there were teachers that were paid full-time salaries, yet worked full-time on trade union activity. Another teacher had to be employed to cover for this activist, this pushed a particular school over budget. Guido didn’t really think much more on the subject until a piece of research by the Taxpayers’ Alliance [PDF] came across his desk a few months later. Their formidable FoI team had scatter-gunned almost every area of the state, trying to work out exactly how much of our money was was being wasted on unions bods who are paid for by us rather than out of the union members’ subscriptions. That leaves plenty of union money around to prop up Ed Miliband and bus people around the country for astro-turfed protests. It was on…

Heavy unionisation is largely a public sector phenomenon (although ex-public sector businesses—such as BA or BT—tend to carry this legacy too) and a great many professions are de facto closed shops (the education and medical sectors spring most readily to mind).

As long-time readers will recall, your humble Devil is not a fan of The Unions. In fact, I have written numerous posts—most pertinently, this one—laying out why. In summary, unions were formed to counter a problem that, largely, no longer exists (unbridled employer power over an unskilled workforce with few options), they increase unemployment, and because they are damaging to their employees and to their customers (largely the British taxpayer).

The unions now largely exist to extort more money from you and me, on behalf of their members, through our taxes—subs that you and I must pay involuntarily. These subs are then used to enforce collective bargaining so that you and I, despite suffering from a massive recession, must pay out ever more to a public sector that delivers less and less.

Furthermore, of course, such collective bargaining diminishes the quality of the workers in that industry—it doesn't matter whether you are good or bad at your job, you will still get the same pay. It is a system that rewards mediocrity at the expense of skill and dedication—thus calling into question whether the unions actually serve the best interests of their members. After all, if a bad teacher must get the same pay rise as a good one, then the good teacher's pay rise is less than it might have been.

In a near-monopoly such as the education system—especially since education is compulsory—all of this means that the general public have no option but to pay the higher (and often undeserved) wages, and reward failure; not only this, but their children's education is then screwed up and these young people's lives irreparably harmed.

For the purposes of this post, the really valid line in that quote is the first one:

The unions now largely exist to extort more money from you and me, on behalf of their members, through our taxes—subs that you and I must pay involuntarily.

And since most of their members are in publicly funded industries, that means that the best way for the unions to get more money for their members is to play politics. And they do this very effectively, mainly by providing the vast majority of the funding for one of the two main political parties—the Labour Party.

The Labour Party is famous for basically bankrupting the country every time that they are elected‚ and this dubious skill is—in large part—due to the fact that a Labour government must pander to its union paymasters.

There are several ways that the last Labour government did this:

• large salary increases for public sector workers (especially if you belong to a union. Interestingly, I was in a hospital in the North, recently, and in the main entrance lobby, they had a large banner setting out why members of staff should join a particular union. The first point was "you will get paid more".);


• provided millions of pounds of funding through entities such as the Union Modernisation Fund (what this modernisation consisted of or who it was supposed to benefit, I've never been sure. But if it doesn't benefit the taxpayer, then why are we paying for it?);


• providing taxpayer-funded staff, venues and facilities.

The first is pretty obvious really—and has, in fact, brought this country to its knees financially.

The second was (and is), as far as I am concerned, a straight piece of money-laundering by the Labour Party, as Shane Greer pointed out in2007.

Without dropping a beat Gordon has today given a further £2.8m of taxpayers’ money to the unions to top up the Union Modernisation Fund; a fund that has already received £10m of taxpayers’ money. Oh, I almost forgot to mention Labour received almost £17m from unions last year.

But if the unions can afford to give £17m in donations to Labour doesn’t that mean they have more than enough money to pay for ‘modernisation’ without the taxpayers’ help? In fact it looks a lot like they’d even have enough left over to make a hefty donation to the Labour Party (and pay for some placards).

If anyone can explain how the Union Modernisation Fund is anything more than a money laundering operation to turn tax revenue into political donations I will be eternally grateful.

It was in 2006 that Guido posted this helpful little diagram illustrating this concept.

Why are taxpayers funding the "modernisation" of the unions anyway? Isn't that what union subs are for? Taxpayers' money is being handed over to a bunch of thugs whose main aim is to increase the amount of taxpayers' money they get: this is akin to me giving some of my money to a man so that he can extort more money from me.

Actually, it's more like me extorting your money from you, and then using that money to pay a massive, psychotic, baseball bat-wielding Glaswegian to come over and extort more from you "in order to pay for ma' fucking weans Christmas presents".

It's even more ridiculous—and really fucking annoying—that Cameron has decided to continue with this Union Modernisation Fund farce.

This does not bode well for Cameron's tactical nouse, fiscal responsibility or his supposed belief in individual liberty. In the massive fucking financial hole that this country is in, we simply cannot afford to keep giving tens of millions of pounds to the unions so that they can ensure that their members—who are overwhelmingly in the public sector—can continue to squeeze as much money as possible for as little work as possible.

Cameron is not only continuing to fund his enemies, he is continuing to fund our enemies—and he is doing it with our fucking money.

Further, from the angle of liberty, Cameron should be able to see that it is absolutely flat-out wrong for the general public to be taxed so that a vested interest can continue to operate how they please. I mean, for fuck's sake, I never expected the Tories to be much different from Labour, but surely even they can see that this kind of thing is wrong in principle, as well as practicality.

One can make a case for any number of things being of benefit to society as a whole and, thus, eligible for funding through taxation. The unions are not one of those things.

Cameron and CCHQ knew about the Union Modernisation Fund, because they explicitly confirmed that it would stay (presumably to pursue some stupid bloody policy of appeasement); it is safe to say that the Coalition were also well aware of the third method of funding the unions—which brings us back to Guido's "Pilgrims"...

With the unions agitating it was only a matter of time before someone said something stupid. In April one such taxpayer-funded trade union official put her head above the parapet and claimed to the Standard that Andrew Lansley had lied about NHS cuts at a pre-election visit to St Georges Hospital in Tooting. Unfortunately for the now infamous Jane Pilgrim, Mark Clarke, the local Tory candidate who had organised said visit, had a slightly clearer recollection of events – mainly that Jane had refused to meet Lansley on political grounds. The first shots were fired and suddenly Jane Pilgrim, the union-funded smearing liar, began to unravel. She had a private consultancy firm on the side and lived at the expense of the taxpayer too. Eventually she was forced back kicking and screaming to frontline nursing, but the can of worms had been opened…

Given CCHQ's attitude to the unions, it is unlikely, I think, that they would have done anything about these kinds of disgusting abuses of taxpayers' money (we can only assume that they need the Labour Party to stay afloat: I suspect that some deals were done in the back rooms of Parliament—something to speculate about in the future, methinks*).

It is only because the Taxpayers' Alliance and Guido started kicking up such a stink (with the press then picking up on it), that the Tories suddenly found themselves under pressure to do something about this scandal.

Guido has seen emails sent around senior brothers expressing concern that the activities of Unison’s poster-girl could be the thin-edge of the wedge and they even speculated that her big mouth might ruin the taxpayer funded fun and games for everyone. How right they were. Suddenly, with personification and a focus point, the outrage about the concept of taxpayer-funded trade-union staff grew. Speeches began to be made in Parliament, motions were put down and people began to realise that there is a Nurse Pilgrim in every hospital, school, government department and pen-pushing office in the country. The TPA numbers came alive and the bandwagon was rolling…

As Guido began smoking out further pilgrims, David Cameron was put on the spot about at PMQs in May. June saw public opinion turn in the polls. The tabloids waded in and Eric Pickles and Frankie Maude soon got behind the issue. As conference season approached word reached Guido that a breakthrough was imminent. On the eve of Tory conference leaked CCHQ briefings saw MPs given anti-pilgrim lines and Pickles and Maude opened fire from the podium. In less than six months a full government consultation had been announced and the figures mooted as potential savings saw even more people get behind the campaign. Union funded Labour MPs went berserk…

Because of the pressure piled on, the Coalition were forced to act—or, at least, promise to act—against a practice whereby the British taxpayer subsidises the unions to the tune of over £113 million a year, through paying for the full-time employment of some 2,840 staff. Plus, of course, the taxpayer gets whacked twice: we have to stump up for another nurse or teacher or council idiot to do the job that the union person was supposed to do.

This is a total disgrace: there is only one group of people who should pay for the unions, and that is the union members. It is time to put the costs back where they belong—or, of course, the unions could cut their costs (perhaps by refusing to bankroll the basically bankrupt Labour Party, or not paying their lying bosses £100k+ every year).

Your humble Devil has been particularly lame this year: whenever Pilgrims have come up, it has been at a time when my blogging inertia was at its height. As such, this is the first time that I have written about them (although, in the future, I shall be following Mark Clarke's Trade Union Reform Campaign with interest).

Luckily, Guido claims that he is in this "for the long haul" and, in this case, your humble Devil is happy to support him.

* It's interesting to note that, shortly after the Tories promised to abolish Pilgrims, the "poison" of state- taxpayer-funding of political parties started bubbling up again.**

** Apparently, there won't be any state-funding "in this Parliament". So, expect to see it seriously proposed for the next one then...

Economics spot

Oh look! Yet more evidence that students—even those commenting on a topic that they are supposed to be commenting on—are completely fucking ignorant...

And this, of course, simply builds adds more fuel to the fire of The Devil's Second Law of Economics, i.e. that if a student says that something is so, the opposite is true.

Thus, naturally, feeding into the general law that there is not a single social sector on this planet so ill-informed, self-righteous and pig-ignorant as a student.

And then they join UKUncut—after passing an entrance exam to prove their idiocy—and become even more comprehensively fuck-witted.

Students: ignore them—you know it makes sense.

A Twitter battle...

Your humble Devil has crossed swords with Richard Murphy on Twitter. I thought that my readers might be interested in the exchange...

DK:
Tell me, @richardjmurphy — you have since said that your tax avoidance was wrong. Have you since paid back the arrears that you "owe"…?

Murphy:
@devilskitchen Nonsense! I had HMRC come to my house and asked if I could pay additional rates - and they refused - because none are due

Quite right. Because tax avoidance is legal—tax evasion is illegal. But Richard advocates that avoidance should be illegal too.

Murphy:
@devilskitchen Let's put it another way - I walk my talk on tax compliance - so enough of your nonsense!

Really? I think not.

DK:
@RichardJMurphy So you do not seek to minimise your tax liability? And, despite advising others how to, you have not done so yourself? Ever?

DK:
@RichardJMurphy So, Richard, none of this is true? timworstall.com/2010/08/24/in-… And this isn't you? guardian.co.uk/money/2003/feb…

Murphy:
@devilskitchen I've explained that time & again & that I would not do in the same way again. So what? I can change my mind. That's maturity

Murphy:
@devilskitchen I'm sure I have never ever sought to minimise my tax bill - it's an absurd thing to do - and I'd never recommend it to anyone

So, Richard Murphy has never sought to minimise his tax bill? Your humble Devil and his readers know that this is a lie. Not just a dissemblance, but an outright lie.

Richard has sought to minimise his tax bill, by forming limited companies, paying low wages to avoid employers NICs, paying dividends in order to reduce income tax, etc. Murphy's assertion above is just not true. At all.

His argument at the time was that he had changed—he had come to realise that such arrangements were wrong. So, because I am a thoroughly nice chap, I decided to let him admit this. In 2010, Richard protested that he had changed since he was... Er, 27. About 20 years before Richard Murphy wrote this article in the Observer advising people how best to avoid tax...

DK:
@RichardJMurphy So, you are 53? In 2005, when you were 47, you were happy to take money to write an article advising people to minimise tax.

DK:
@RichardJMurphy You wrote that "I have come a long way since I was 27 – thankfully". taxresearch.org.uk/Blog/2010/08/2… But not that far, eh, Richard?

Murphy:
@devilskitchen Since it appears you know the answers to all the questions you're raising - all provided by me - shall we stop wasting time?

DK:
@RichardJMurphy Well, why don't you stop wasting everyone's time by hypocritically condemning tax avoidance whilst profiting by it?

DK:
@RichardJMurphy That's a rhetorical question, by the way. I suggest that you stand for Parliament—you'd fit right in.

DK:
@RichardJMurphy You're fatally compromised—like your Union paymasters, milking us for over £113m per annum. Time for dinosaurs to retire.

I make that—along with the rest of the Murphy's Law archive—about 83,000 to 1 in my favour...

Time to look to the future

It is time to face some hard facts.

Whether Greece holds a referendum, and whether or not its people vote yes or no, is irrelevant: the country is bust.

The Eurozone countries are pledging €1 trillion, €2 trillion... It doesn't matter: none of them have the money in the bank—or, indeed, the credit line—to pony up on their fantasy. No, not even Germany—which will soon struggle to service its own colossal debts.

The last hope of Merkel and Sarkozy was the Chinese—and they, sensibly, declined. The governments of the EU must attempt to recapitalise the European banks when they themselves have no capital.

Only the other week, several governments had to bail out three European banks who have almost all, as yet, failed to write down their EU state debts.

I have said it before and I will say it again: the social democratic model is bust—it is time for this country to cut its losses and look forwards—to prevent bankruptcy in the short term, and to promote prosperity and freedom in the long to medium term.

So, how do we do that?

The first step that this government needs to take is to announce immediate withdrawal from the EU—with the first step the immediate cessation of any payments to the EU (including MEPs salaries, etc.). This is a process that will take some time in any case—so better sooner than later.

There are three main drivers for this course of action:

1. to ensure that we are not on the hook for any more Euro bailouts—we are going to need every single penny that we can possibly save for the next steps;


2. to enable this government to take immediate and radical steps to reduce regulations on business—those that trade with Europe will need to continue abiding by the EU's rules, of course. However, since only 10% of our trade is done with the EU, that will considerably lighten burdens on businesses—especially the SMEs that create the most jobs and growth in the economy.


3. to be able to open dialogue with every other country in the world in order to gain advantage in uni- and multi-lateral trade agreements—something that we cannot do whilst part of the EU (which has total control over trade policy). Britain already has an advantage in being part of the loose network of countries known as the Commonwealth—a band of national states that roughly share the Common Law legal system and, in many cases, the same language.
   
   The aim should be to promote totally free trade throughout the world. Even if other countries will not acquiesce, then we should immediately declare the free movement of goods and capital through this country.

All of these measures will take time—so the best time to start is now.

The EU

Our erstwhile partners in the EU will not take too many steps against us—with the balance of trade in our favour (as far as negotiation is concerned), we can ensure that the 10% of trade that we do with them is not adversely affected. However, the medium term aim is to reduce that proportion.

The simple fact is this: we have placed far too many of our export eggs in one basket: now the bottom is falling out of that basket and we are about to loose an awful lot of cash. In negotiating uni-lateral deals with the other 150-odd countries around the world, we can minimise any future disruption.

Foreign Aid

The next step will be to reduce any foreign aid—unless used as a bargaining chip with solid economic gains attached.

Our money must be made to work for the monetary interests of the British taxpayers—not for the vanity projects of MPs. And nor can we afford to hand over colossal amounts of cash in order to insulate other people from the disastrous decisions of their own governments. That may sounds harsh, but we simply cannot.

The only way in which these various tyrannical governments around the world will be brought to heel—and brought to heel they must be—is if we make it extraordinarily clear that we will help their citizens to trade with us, and that's all.

I think that we will find that this will bring about property rights and free trade in some of the more backwards parts of the world far more swiftly than any "humanitarian" or "debt-foregiveness" interventions will.

The IMF

We should also withdraw from or severely renegotiate our relationship with the IMF. As with many other supranational organisations of which we are part, our presence at the "top table" seems merely to mean that we hand over huge chunks of money with absolutely no return (other than enabling our puffed-up peacocks of politicians to strut about like they own the fucking world).

Further, since the appeal to the Chinese has failed, it is now inevitable that the Eurozone will now appeal for funds from the IMF: this will mean, despite Osborne's blandishments, that we will suddenly be indirectly bailing out the Euro.

If we are to help out other countries, it will be on our terms and for our own advantage—neither for theirs nor that of the corrupt technocrats and bureaucrats of the IMF, UNESCO and all those other unaccountable world government structures.

On the home front

So, we need to boost business—especially SMEs—in this country. The simplest way to do this is to drop taxes on business, and on capital investment.

So, as I stated earlier, we are going to need some cash and a very sound business plan. Because we are almost certainly going to have to borrow some money ourselves. And we'll have to tread very carefully.

The first step will be the immediate sacking of the top three grades of civil servants (at least), and the voluntary retirement of anyone who would like to get out before the real cuts happen.

The next step is to cut National Insurance by 1% for employees and 8% for employers. Why this difference? Simple—there are far fewer employers creating jobs than there are employees looking to fill vacancies.

VAT (or its post-EU equivalent) can stay where it is—we need some income and, as I have said before, I believe consumption taxes (with the exemptions for "necessities") are the closest to voluntary that you can get.

Capital Gains taxes—for returns on money invested in businesses within the next three years—should be cut to 15%, with the expectation that they will rise thereafter. This should stimulate capital investment now, when we most need it.

Corporation Tax for businesses turning over less than £5 million should be reduced to 15% also. R&D; tax relief at the current level will continue to apply.

Plans to introduce a universal Flat Tax, with high Personal Tax Allowance, will be set in motion with a legislation to be moved at the end of three years.

The National Minimum Wage will be reduced to £2.50 per hour, with Local Authorities empowered to set a suitable top-up precent for their own area. In other words, Westminster Council might decide to bring that up to £8 per hour, whilst East Yorkshire might maintain it at the national rate. This will start to prepare Local Authorities for more autonomy over the next few years.

As far as energy policy goes, government backing for fracking for the production of gas will be immediately granted, ensuring Britain's supply of cheap, low(ish)-carbon energy. Planning permission for gas-fired power stations will be fast-tracked through the process, to ensure that we can take advantage of this wonderful new energy source.

Finally, the NHS will be reserved for essential medical work only, with all funding for non-essential treatments and "preventative" advertising campaigns, etc. slashed to nothing. The government will also start renegotiation of PFI contracts, with the backers involved quite openly threatened with default if concessions are not made.

Conclusion

The above measures are designed to provide a quick kick up the arse to the economy, and to help businesses in the short term. In the medium to long term, a number of other radical steps will be taken (which I shall expand on in a following post)—the above, however, should buy us some breathing space.

Much of it requires the state to act in a ruthless, devious and occasionally downright dishonest manner—however, I believe that both the short-term crisis and the medium-term gains merit it. And reparations—in the form of higher growth and productivity—will be made apparent, eventually.

I'm sure that I've not covered everything, but it's a start—and I commend the measures outlined above to the House.

Of cabbages and kings...

As is so often the case, an EUReferendum post sums up a great deal of the problem in this country (indeed, with the whole social democratic system).

It goes without saying, though, that it is not safe to give local councils more power until we have more power over those councils. And that means money. We must control the purse strings … the essence of the Referism concept. As long as we have "masters" who can decide year-year-on-year how much we will pay them, and our choice is only how we pay them, there can be no democracy.

As long-time readers will know, your humble Devil is not a fan of democracy as an endgame: liberty is the point—democracy is simply the best way that we have so far found to maintain freedom for the longest possible time. However, a proper democratic process—where the people actually have the power—is a half-decent goal.

And, as Richard has pointed out repeatedly, the only way that we can gain power is, in fact, to control the cash. Because as long as our lords and masters control the money, they control us: not simply because they demand said monies, but because it gives them limitless recourse to the law.

(As I am coming to believe, one of the biggest stumbling block to any kind of proper libertarian society is the lack of access to the law. But that is a post for later.)

When I endorsed EUReferendum's Referism concept, a great many commenters envinced a belief that people would simply got themselves more and more money—that, in effect, no savings would be made and we would end up in a situation just as bad (or worse) then the current one.

It is perhaps instructive, then, to find the time to link to a post that EUReferendum published a few days afterwards—pointing out that such referenda on taxation have been tried before.

From the school of nothing new under the sun, a reader points out that, in February 2001, Labour-controlled Bristol City Council held a referendum on its Council Tax, asking voters whether they preferred to increase it by two, four or six percent, or to freeze it at then current levels.

Much to the chagrin of the Council, which had expected otherwise, more than half of the voters opted for a freeze. Sentiment was such that, had a reduction been on offer, the indications are that this would have been the preferred choice.

And it was also tried by Croydon...

Nor was Bristol on its own. The Council was just beaten to the punch by the London Borough of Croydon, which on 14 February 2001 asked its 235,000 registered electors to decide whether Council Tax should be increased by two percent (in real terms, an effective freeze), 3.5 percent, or five percent. Council tenants also voted on whether their rents should be increased.

Again to the chagrin of the Council, 56 percent of the voters opted for the lowest possible rise in Council Tax. A total of 80,383 voted, a 34.2 percent turnout. Thirty-two percent voted for the 3.5 percent increase and a mere five percent went for the five percent hike.
...

Croydon was to repeat the experiment the following year, with 74 percent of the taxpayers who voted opting for the lowest rise on offer, at 3.65 percent, on a 35 percent turnout.

Although it was Milton Keynes that had started this trend...

Interestingly, this experiment in direct democracy had started in 1999, when Milton Keynes had put to its voters the choice of three levels of increase, ranging from five percent, 9.8 percent and 15 percent.

Residents were able to vote by post or by phone for their chosen option. A 9.8 percent rise would keep core spending at the same level, while the five percent increase would have meant cuts in the core budget and a 15 percent increase would have provided extra revenue). Forty-six percent of those who voted opted for the 9.8 percent rise, thirty percent for the five percent increase and twenty-four percent for the 15 percent hike. The turnout was 45 percent.

Council leader Kevin Wilson told the BBC he was "delighted" by the result. "The referendum gave the people an opportunity to be masters rather than servants," he added, declaring that the referendum had succeeded in its aim of reconnecting people with local government and gave public backing for council tax rises.

Buoyed by the result the following year, Bristol announced that the public would get a chance to vote on their council tax levels, "under plans drawn up to tackle voter apathy". The scheme had the backing of government ministers and, if the public had responded "positively", the plan was to repeat referendums across the country. Clearly, the response was not "positive" enough.

Clearly.

Although, clearly (for your humble Devil, at least), when people are given the choice, they vote to pay less money. And they do so at turn-out levels that are more respectable than the vast majority of elections in this country.

Despite (or, possibly, because of) the carping of the left-wing media.

At the time, The Independent was to lament that, "in a victory for the maxim that people vote with their wallets, the results showed few people in favour of extra spending". "Voters of Bristol pick school cuts over taxes", it headlined. The Bristol experiment was not repeated by Labour.

But did the Coalition not promise something similar...?

As of July last year Communities Secretary Eric Pickles has declared that by 2012, he wants people to be able to reject Council Tax levels "if they exceed a ceiling agreed annually by MPs", by voting on them in referendums.

This is based on a promise made in 2007. Pickles calls the plan a "radical extension of direct democracy". It is not. Instead, it is a considerably watered-down version of the earlier referendums – which themselves did not allow for an outright veto. And, needless to say, there is absolutely no suggestion that referendums should apply to central government spending.

The simple fact is that when people are given the chance to vote solely on the levels of taxation—rather than a whole collection of other policies and tribal dog-whistles—they vote to pay less.

As such, putting the Finance Bill to the electorate every year—not just Parliament—would be likely to drive taxes down considerably. Coupled with a legally binding restrictions on borrowing levels, this policy would force the government to form its spending plans depending on how much taxpayers let it raise.

Such fiscal restraint would force governments to spend less money more wisely. And lower taxes would lead to higher growth.

What's not to like...?

A discourse on the Coalition Tax strategy

I have been mulling over the general tax-raising policies of the Coalition recently, and come to the conclusion that—barring a few jarring issues—the general movement is in the right direction.

Before I move onto the specifics, however, there are a few assumptions that should be stated.

1. Tax is theft and therefore a bad thing.
   Tax is simply legalised theft, and is therefore, at best, a necessary evil. If one is to have a state then one almost certainly needs taxes to support it. But, simply from a moral perspective, should be kept as low as possible: most importantly, the level of tax should not be levied at such a level that people are then struggling to survive.


But, given the above, the best taxes are those that are, at least partially, voluntary. I have, for many years, opined that a sales tax (with VAT-style exemptions for "essential goods") as being the best tax precisely because people do not have to go out and buy shit. And the shit that they do have to buy—such as unprocessed food—is exempt.

2. Different types of taxes have different effects on the economy.
   This should be self-evident: if you tax savings, people will save less. If you tax work, then fewer people will work. And if you tax jobs, then fewer jobs will be created. This is not rocket science.


3. Tax incidence is important.
   With any tax, it is not necessarily those on whom it is immediately levied who actually pay the tax. Companies, for instance, do not pay tax—no, really, they don't. All taxes, everywhere, must at some point come out of the pocket of a living, breathing human being. And companies aren't.
   
   Companies do not pay corporation tax: the tax incidence falls on the shareholders (in lower dividends) and the workers (in the form of lower wages). Most studies find that it is the workers who bear the greater part of corporation tax.


4. People spend their own money better than the state can.
   It is not simply that people spend their money more efficiently than the state—although they do. It is that people spend their own money on things that they themselves want: the state has to guess what many millions of people want. And, in any case, the state tends to spend money on what will get its politicians re-elected.

So, given all of the above, you are now in the Coalition government and economic growth is absolutely critical to your strategy—what do you do? Bearing in mind, of course, that you have a crippling deficit which needs to be reduced and so you cannot cut taxes across the board.

The vast majority of employment in the country is provided by companies, and the vast majority of new jobs are created by small and medium size enterprises (SMEs). Quite apart from the historical significance of unemployment figures, people with jobs have money: this enables them to buy stuff, and it also reduces the benefits that the state has to pay out.

Companies generally need some capital backing to operate and grow, especially in the early stages—and especially if they are making an actual product (because, largely, the product needs to be researched, designed and made before it can be sold).

So, you want to encourage people to invest capital into companies; you want to ensure that companies produce valuable products; you want to ensure that companies can afford to employ people, and you want to ensure that companies can pay their workers a decent wage.

So, let's see what the Coalition have done.

• Raised Capital Gains Tax:FAIL. This discourages people from investing in companies because their capital returns will be reduced.


• Raised Employers and Employees National Insurance Contributions (NICs): FAIL. Quite simply, employers NICs are a tax on job creation.


• Lowered Corporation Tax: MINOR WIN. For the obvious reason that, as stated above, companies do not pay taxes. This might also help to offset the NICs rise: however, this only benefits profitable companies, which many start-ups, initially, are not.


• Raised the Personal Tax Allowance significantly: WIN. Quite simply, workers see more of their own cash—and they have the choice of how to spend it. Or, of course, to save it.
  
  On another note, taxing the poor and then handing them back some of their own money in benefits is colossally wasteful. And, as I've argued many times, deeply immoral. Letting them keep more of their money is a very good thing.


• Raised VAT to 20%: MINOR WIN. In the context of other tax rises, this is a fail. However, VAT is the closest that we have to a voluntary tax and, coupled with the rise in the personal allowance, the Coalition is shifting (in however small a way) the burden of tax from earnings onto spending.

So, the general direction of the Coalition's tax policy is not too bad—not great, but not bad. And, as far as we know, the general continuing direction is as laid out above.

So, whilst the Buttered New Potato and his merry men might be fucking things up generally, in this area it is not all bad.

Good question, Mr Potato Head

The story about the bar owners in Michigan banning politicians reminded me of the Ban Darling campaign that did the rounds a couple of years ago—so I went and looked up some old posts. This piece included a video of Cameron mentioning the campaign at PMQs and attacking Brown for... Well, just watch...



Did you catch the pertinent line? No? Well, here it is...

Can he [Brown] name one other major country that is responding to the down-turn by putting up taxes? Name one.

I do not know if the Gobblin' King could name one (I didn't preserve that part of the debate), but I bet good ol' David "20% VAT & Oodles of Green Taxes" Cameron can, eh?

But, given the intervening events, I think that the question needs some modification...

So, Davey-boy: can you name one other major country that has successfully got themselves out of the down-turn by raising taxes? Name one.

Dave? Dave? Bueller...?

Flatter is better

Yesterday Guido pointed out that the Baltic states still have very healthy growth, and that they all share a similar tax regime.

[LabourList's] graph showing Britain’s tragically anaemic growth while tragic has unintended consequences for the tax and spenders. Have a look at the three countries leading the growth figures:



We on this blog are huge fans of the Baltic model, but apart from pretty blonde girls, what do Estonia, Latvia and Lithuania have in common? Well flat taxes of 24%, 25% and 33% respectively for one. Discuss…

There's not actually a lot to discuss—unless you are an accountant, flat taxes are better. Back in May, parlaying off Timmy's post at the ASI, I wrote a post about the fact that flat taxes are, pretty much, a free lunch in terms of tax raising; plus, of course, they ensure that companies and individuals have to spend considerably less on accountants just to work out how much tax they should be paying.

Those faithful (few) readers who have been perusing The Kitchen for many years might remember that it was over the issue of Flat Tax that Richard Murphy first came to our attention. Back in October 2006—when Timmy and I were reasonably involved in UKIP—I published an assessment of the party's Flat Tax policy. After doing so, I was solicited to write a letter on the topic for the Evening Standard (which was written in a rush, on a shared computer in Brighton, IIRC).

The letter that appeared above mine was submitted by one Richard Murphy of taxresearch.org.uk. Establishing the trend which he has so conspicuously continued to this day, Richard Murphy's missive was short on words and long on bollocks.

Flat taxes are not "simple". More than 83 per cent of people in Estonia, where they have flat taxes, submit a tax return; only 16 per cent do in the UK.

Well, you might be able to anticipate your humble Devil's reaction to that...

Erm...

What.

The.

Fuck?
...

Dear Richard—can I call you "Richard"? It's better than "dickhead" after all—has it occurred to you that many people in Britain do not submit tax returns because our tax regime is so complicated (as I said, the tax helper document is 56 pages long)? And that more people in Estonia do so because the taxes are... er... simpler? I mean, for fuck's sake, are you stupid or what?

Inevitably, Murphy talks yet more arse-wibble...

And while [flat taxes] might cut overall tax rates for the rich, all credible calculations show they increase them for middle-income earners.

Richard, I am trying to remain patient, really I am, but over the last six months I have drawn attention to several models of flat tax, many of which are credible, that demonstrate that they do not increase taxes for middle earners. For fuck's sake, man, who the hell are you trying to kid? Or is The Adam Smith Institute not credible enough for you? Or, of course, UKIP's Flat Tax policy document shows precisely how flat tax, coupled with a high PTA [dead link], does, in fact, make everyone better off.

The real point is that taxes should low and simple: then we really can have a free lunch.

Who cares about the purpose?

Ugh.

Whilst I tend to think that George Osborne looks like a particularly unpleasant fucking demon, it is good news that our rat-nibbled Chancellor is looking at the 50p tax rate to see whether it, you know, actually raises any more fucking tax.

Chancellor George Osborne has asked the Inland Revenue to check whether the 50p top rate of income tax is actually making money for the government.

Some economists have claimed that tax avoidance and evasion mean the rate is raising less income than expected.

Speaking on BBC Radio 4's Today programme, Mr Osborne hinted that the 50p rate remained under review.

He added: "There's not much point in having taxes that are very economically inefficient."

You would have thought that this would be a good move, and welcomed by a very cash-strapped government that is attempting to squeeze every last penny from its citizens whilst also relying on economic growth to slash its debt-to-GDP ratio.

Sorry—did I say "government"? I meant, of course, that the Tories were trying to bring some common sense to bear, whilst baby-faced wanker Nick Clegg and his tedious bunch of sandal-wearing, tofu-munching Green zealots have a rather different agenda.

Nick Clegg ruled out any cut in the 50p top rate of tax yesterday until Lib Dem demands to give tax cuts to the poor are completed.

In a blow for Tory demands to slash the highest income tax band, the Deputy Prime Minister said he would not sanction a cut for the rich unless the limit at which people beginning to pay income tax is raised to £10,000.

But Mr Clegg did suggest he would accept the abolition of the 50p rate in exchange for a so-called 'mansion tax' on those with expensive properties and fresh moves to crackdown on tax avoidance.

Nick Clegg really is a fucking moron, isn't he?

Look, Nick, this isn't an either-or situation, OK? Famously, when Lawson dropped the top rate of income tax from 60p to 40p, the total tax take went up. If—as all the data seems to indicate—the 50p tax rate is harming Treasury receipts, then dropping it will facilitate your £10,000 tax limit (which I applaud, even if it does not go nearly far enough).

How about you actually wait until the data is in before you start your piss-poor posturing?

Scottish Water is unique*

Over at EUReferendum, Richard points out that Scottish Water's bosses have decided to award themselves massive bonuses.

For sure, the latest dose of corporate greed doesn't help, when you see five directors of the publicly owned Scottish Water sharing in a one-off bonus pay-out of more than £450,000 for "meeting performance targets".

Chief executive Richard Ackroyd was handed £78,900 as part of the deal, meaning he took home £420,000 in total last year. Finance chief Douglas Millican and "asset management director" Geoff Aitkenhead both got bonuses of £103,000 to top up their total pay of £230,000.

Yet a spokeswoman for Scottish Water insists that the business is "unique" and that the salaries were below those of directors at water firms south of the Border. So that's alright then?

Actually, Scottish Water is unique, so far as I know.

Why?

Well, in most places in the UK, one pays a fixed bill for one's water and sewerage (mine is currently about £320 per year)—unless, of course, you are metered. It's very true that one doesn't have an awful lot of choice in one's supplier, but at least the bill is there in front of you.

In Scotland, however, the only supplier is, of course, Scottish Water but, more egregiously, the water rates are included in your Council Tax bill. That's right, Scottish Power not only have the entire power of government behind their bill collection, but they do not even have to make the effort to collect their payment from the consumers themselves.

This leads of course, to a particular loathing of students in large university towns (and most towns or cities in Scotland have a hefty student to resident ratio) because, of course, students do not pay Council Tax.

Edinburgh, for instance, has a population of 477,660: the University of Edinburgh alone has 28,394 students, or about 6%. If you add in Heriot Watt (10,225) and Napier (17,605) then you are at some getting on for 12% of the population using water but not paying for it (and I haven't included the one or two smaller institutions).

As long-time readers will know, your humble Devil lived in Edinburgh for ten years, and it almost goes without saying that the water part of my Council tax went up extremely rapidly: indeed, I remember one year in which the water precept went up by 18%!

So, yes, Scottish Water are pretty unique: but only in that they are able to rape the Scottish taxpayer in a way not open to their brethren south of the border...

* So far as I know, this payment system does not exist elsewhere in the UK.

A "horrifying figure"

Neil Clark's bullshit encomium to a "less greedy" Britain is ripped to shreds by Timmy in typically terse fashion.

What interested me—in the context of Scottish Power raising their prices by 19% for gas and 10% for electricity—was the figure for the rise in electricity prices under the nationalised company, as recorded in Hansard.

Gas and Electricity Prices

HC Deb 22 March 1976 vol 908 cc11-3

Mr. Peter Morrison asked the Secretary of State for Energy what is the percentage increase in the cost of electricity since 28th February 1974.

Mr. Eadie: I am informed by the Electricity Council that it is about 86 per cent. overall in England and Wales.

Mr. Morrison: Is the hon. Gentleman aware that that is a horrifying figure? Perhaps he will explain why the prices of the goods and services supplied by nationalised industries seem to rise much faster than the prices of those supplied by the private sector.

Yes, that figure is correct: under the benign state management of the national electricity company, over two years the price of electricity rose by 86%! Eighty-six percent!

No doubt that arsehole Huhne would say that this was because people just weren't shopping around enough.

As concern grows that the other five major energy companies are preparing to follow Scottish Power and announce big rises within weeks, the energy secretary, Chris Huhne, told the Observer that consumers should not accept the increases "lying down" but "hurt" their supplier by finding cheaper alternatives.

"Consumers don't have to take price increases lying down," he said. "If an energy company hits you with a price increase, you can hit them back where it hurts—by shopping around and voting with your feet."

Given that a great part of these price rises are caused by the fucking government—both the EU and our pretendy local government in Westminster—slapping taxes and alternative fuel contributions onto the energy companies, I think that Chris Huhne's witterings are somewhat cunting cheeky, frankly.

"Right now, only one in five people switch suppliers. I want to see more switching, more competition and more companies in the market," Huhne said. "The big six only have a few minnows snapping at them, who are kept artificially small. By scrapping red tape for small players they can become serious challengers and help keep bills down."

Yeah? And what will happen when those companies start getting big? We all know—you'll slap a massive fucking windfall tax on them, or just put more taxes onto their suppliers* so that the "minnows" cannot even compete on price.

Seriously, why don't you fuck off, you total fucking Huhne.

* In fact, they'll probably do something really fucking stupid like linking both gas and oil taxes to the oil price. Oh, wait, that's precisely what Osborne did, the stupid fucknuts.

A smoke and mirrors Budget

George Osborne: "look into my eyes, not around the eyes, into the eyes, you are feeling sleepy—now you are feeling wealthier..."

Many people have cautiously welcomed George Osborne's first non-emergency Budget, but the simple fact is that we are being soaked for even more money—it's just that George is clever enough to know how to grab the positive headlines.

You can see the key points on the Beeb website, but I would like to put some of the current situation in perspective.

1. Fuel duty cut by 1p.
   Which is very nice for those who drive, but rather ignores the fact that the VAT rise in January put more like 3p on a litre of fuel. As such, both this cut and the scrapping of future taxes is hardly putting more money in people's pockets right now. Especially as some 62.2% of the price of fuel is already tax.


2. Fuel duty cut to be paid for by increasing tax on North Sea oil producers.
   Now this is absolute pure barking insanity. From a personal point of view, it has hit some of my shares—although not to the extent that it has hammered City Unslicker (simply because I have less skin in the game).
   

   Today's budget has cost me £10,00 on the nose thank so to the collapse in share prices of our North Sea oil companies. Such companies have been doing really well of late, discovering bigger fields and eeking out a longer future for the UK as an oil producer—all the time with 50%+ of the profit going straight to the Treasury.

   
   But that alone is not enough for your humble Devil to describe this measure as lunatic—no, what leads me to make that comment is far more fundamental...
   
   As readers will know, your humble Devil is not—in any way—a trained economist. Nor have I read any books on economics. However, even I can understand the theory of supply and demand—and Timmy is able to explain how it applies to this situation with some force.
   

   Yes, that’s right, you’re taxing the excess profits of those who supply it thus making them, and possible new entrants, less likely to go and find more, so as to increase the supply and bring prices down.
   
   This is, you’ll have to agree, fairly stupid.
   
   What lifts is up into the realms of rampant lunacy is that the money so raised is going to be used to reduce the price of the fuel itself: that is, to increase demand.
   
   So, our solution to prices rising because of tight supply and increasing demand is going to be further restricting supply and increasing demand.

   
   Quite simply, with fuel prices lowered, people will buy more of it—demand increases. But Osborne is going to tax the suppliers of this good, so that they produce less of it. Is the man a complete moron?
   
   This lunacy is further compounded when you consider how much the Coalition has been wibbling on about "energy security" and all that other bullshit. The man's a nutter.


3. Personal Tax Allowance rise.
   So, let us move on from fuelling this fuel fuckwittery and edge cautiously into the realm of personal taxation. In the emergency Budget last June, Osborne raised the Personal Tax Allowance to £7,475...
   

   ... worth £170 a year to basic rate taxpayers. It is expected that 880,000 of the lowest-paid will be taken out of income tax altogether...

   
   ... and effective this April; and from next April, the PTA will be raised by another £630 to £8,105. Which is nice.
   
   However, what has been rather less dwelt upon is the fact that National Insurance—for both employers and employees—is going up by 1% to 12% and 13.8% respectively. My humble salary sees the following changes (calculated by Listen To Taxman):
   
   • 2010/11: Income Tax of £4,905.00 and National Insurance of £2,780.80 = £7,685.80
     Employers' NI Contributions: £3,968.00
   
   
   • 2011/12: Income Tax of £4,705.00 and National Insurance of £2,852.64 = £7,557.64
     Employers' NI Contributions: £3,302.06
   
   
   • Total: I am up by £128.16 a year, apparently. And my employer seems to be too—which is odd... Is this right?
   
   Perhaps the "squeezed middle" is not quite so squeezed? Except, of course, that I am not really much better off since the VAT rise makes just about everything that I buy 3% more expensive than it was in December 2010.
   
   As with the fuel duty, the Chancellor has made a headline-grabbing reduction in one tax, to mask the fact that he is taking much more from us elsewhere.
   
   However, these large rises in the PTA are actually rather clever from a PR point of view since they have alerted people to the fact that such allowances exist and can be significant. If a Labour government were to come in and reverse these rises or, as Nulabour did, simply limit them to below inflation—measures which would explicitly hit the poorest hardest—they would be in a very difficult position.


4. Consultation on the merging of Income Tax and National Insurance.
   This has been mooted for the last few months—or rather longer by both the Adam Smith Institute and UKIP—and is a definite plus as far as your humble Devil is concerned.
   
   As I have long pointed out, although NI is supposed to pay for your pension, your healthcare and your unemployment benefit, it does not. In reality, there has never been a National Insurance Fund and NI is simply another tax—a colossal £120 billion per annum Ponzi Scheme.
   
   What it has allowed certain governments to do—as with the below-wage-inflation PTA rises—is to raise more tax whilst dropping the headline rate of income tax.
   
   What this measure would do is to drop the pretence that NI is anything other than an income tax, thus making it far more difficult to raise direct taxes by stealth.
   
   It would also hammer home to people that NI does not pay money into a fund for your use but into the general pot of cash for government-delivered services that you access on sufferance.
   
   It would also bring home to the population in general just how much they pay in direct taxation. A slight caveat, however: as Dizzy points out, despite the glee of pro-campaigners, one would not, in fact, be paying a 32% rate of income tax.
   

   You see, we have, irritatingly, a progressive tax system. That means you pay NI on the gross before tax. Then you pay Income Tax on the taxable amount, which is the gross less the free 7Kish. Then you pay one rate on the next 20 odd thousand. If you go up into the 40% rate you only pay it on the amount you are in it by.
   
   In other words, if you earn £1 over the threshold you would pay 40p to the taxman on that £1. Horribly confusing I know.
   
   Anyway, the bottom line here is that not even someone earning £150,000 per year pays 52% of their income in taxes. In fact, someone on £150K (the 50% tax rate) will pay a combined amount of NI and Income Tax to the tune of £58,900, that 39% of their earnings in tax. Someone on £50K (the so-called 40% higher rate) will pay £13,910 in NI and tax, that's 27% in total.
   
   Now don't get me wrong, I still think that is way too much. However, trying to win the argument for lower taxes on the basis of exploiting the confusing nature of a "progressive" system to make it sound much worse than it is is the wrong argument to be making because you'll be called on it.
   
   A much sounder platform to be on is to make the case that the tax system is so utterly confusing that tax rates should be flatter, instead of this crap where you pay a percentage on the gross, then you get a pay one rate on one part, and another rate on another part, less your free part.

   
   And, of course, this is the other big bonus: such a system would be far simpler to administer, thus allowing the state to get rid of a goodly number of pointless pen-pushers thus leading—hopefully—to a lower rate of tax altogether.
   
   I wouldn't hold your breath though—with 32% being the figure bandied around, I wouldn't be surprised if that it where it starts.
   
5. Corporation Tax dropped by 2%.
   As a shareholder in the company that I work for, I naturally applaud any cuts to Corporation Tax: in fact, I am (in theory) a double winner here since, as we all know (don't we...?), that the actual tax burden ("incidence") of Corporation Tax falls on two groups of people: the workers (some 70%) and the shareholders. Being both, this move will—in theory, I stress—make me rather better off on two fronts.


6. R&D; Taxes Allowances.
   Another rather good piece of news for our business are the changes to Research and Development taxes, as highlighted by Timmy at El Reg.
   

   Here's (suitably adjusted for the new rules) what HMRC says about the scheme:
   

   [T]he tax relief on allowable R&D; costs is 200 per cent – that is, for each £100 of qualifying costs, your company or organisation could have the income on which Corporation Tax is paid reduced by an additional £100 on top of the £100 spent. It also includes a payable credit in some circumstances.

   
   That's really rather attractive: if you're paying £100k in R&D; a year, and making £100k in profits even after doing so, then you've just wiped out your entire tax bill.

   
   Now, this is rather super, to be honest. In my day job, one of my many hats is that of (effective) head of research and development*; as such, one of your humble Devil's yearly rituals is to write our R&D; submission to the government, upon which we get a pretty decent tax rebate (mainly on people's salaries).
   
   Whilst the amount of R&D; that we do is hardly likely to wipe out all tax on our profits, it should go some way to mitigating our liabilities—and thus allow us to invest even more into creating even better software.


7. Pension Age.
   One of the final things that I am going to comment on (it hardly seems worth mentioning that "sin" taxes are going up again), is the proposed rise in pension age. Once again, Timmy's Register article explains what this is about.
   

   Almost everyone therefore expects to live to an age to collect a pension: it has become assurance instead of the original insurance**. The proposal therefore is to tie (as some other places, Denmark among them, already have done) the pension age to the average age of death. In a perfect world, to the average age of death of the previous cohort... Thus the pension becomes what it was originally, insurance against outliving your rational level of savings.
   
   A useful byproduct of so limiting the concept is that it could become a reasonable and serious payment again. If it is something that's paid to only half of old people and paid to all only for six or seven years rather than 12 or 14, then it could be more generous, while still reducing the total cost.
   
   Yes, this is rather bloodthirsty, but something must indeed be done about the long-term costs of rising lifespans.

   
   Bloodthirsty it may be, but the scale of the government's pension liabilities is truly terrifying: it is the largest component of the various studies that have put the British state's true debt at somewhere near £8 trillion—a truly colossal sum that is roughly six times our yearly GDP.

And on the question of the public debt, the news is not so good...

2011 growth forecast downgraded from 2.1% to 1.7%

2012 forecast also down from 2.6% to 2.5%
...

Forecast borrowing of £146bn this year, £2.5bn lower than anticipated

Borrowing to fall to £122bn next year, dropping to £29bn by 2015-16

National debt forecast to be 60% of national income this year, rising to 71% in 2012 before falling to 69% by 2015

As Booker highlighted this weekend, despite the optimistic projections, the government is still spending money like water.

Despite the general impression that our new Government is cutting back on public spending – as Channel 4’s Jon Snow put it, we are facing the most severe cuts since World War Two – the Budget revealed that our spending will in fact increase even faster than we were told it would last October.

In the small print of last year’s spending review, Mr Osborne told us that annual spending was due to rise from £696 billion to £739 billion in four years’ time. In the small print of last week’s Budget, spending is projected to rise from £694 billion this year to £743.6 billion in 2014-15, an increase of some £50 billion.

Then there was Mr Osborne’s claim that, to encourage small businesses, he is planning to save £350 million by scrapping unnecessary regulations. What again only emerged from other official sources was that, as usual, “deregulation” cannot include any regulations originating from the EU, although these now account for the vast majority of our regulatory burden.

This point was neatly put forward by England Expects.

The Government has set great stock by its red tape cutting approach. One in, One out is the cry. Here is the Department for Business, Innovation and Skills statement from last year,

a new approach that will control and reduce the burden of regulation. A “one-in, one-out” approach, designed to change the culture of government, would make sure that new regulatory burdens on business are only brought in when reductions can be made to existing regulation.

Pretty good stuff you must agree.

Indeed. And more hope was engendered when iDave Cameron pointed out that we needed to stop the "huge amount of regulations—particularly coming out of Europe." Hoorah!

Unfortunately, this is but a pipe dream, as Priti Patel found out when she asked a question about this "one in, one out" rule.

Priti Patel (Witham, Conservative)
To ask the Secretary of State for Business, Innovation and Skills whether his Department's one-in, one-out policy applies to EU regulations.

Fair Question one might have thought, what with the Government being so proud of this policy. The answer? Ah that is a little difficult,

Mark Prisk (Minister of State (Business and Enterprise), Business, Innovation and Skills; Hertford and Stortford, Conservative)
At present EU measures will not be counted as INs unless a Department exceptionally imposes a measure that goes beyond the minimum requirements (i.e. if it is gold-plated, in which case the gold-plated element will be cost as an IN). Existing EU legislation can be counted as an OUT if it is repealed or revoked, or if gold-plating is removed or if a derogation that imposed costs to business is voluntarily curtailed ahead of its maximum term expiring.

So that is a No then.

Poor Priti, there she is asking the right questions, and even getting interesting answers, but what can she do with them? If she goes public the whips will crush her kittens.

And Booker spells out just how much these EU regulations might cost us.

Then there was Mr Osborne’s claim that, to encourage small businesses, he is planning to save £350 million by scrapping unnecessary regulations. What again only emerged from other official sources was that, as usual, “deregulation” cannot include any regulations originating from the EU, although these now account for the vast majority of our regulatory burden.

Coming into force next October, for instance, will be the Agency Workers Regulations, implementing a 2008 EU directive giving temporary workers similar employment rights to full-time employees. This was fiercely resisted by our Government at the time because it will hit Britain much harder than other EU countries. The Government’s own estimate of its annual cost is a staggering £1.9 billion. So, while the Chancellor boasts about saving £350 million, what he doesn’t mention is that the cost of just one EU regulation which we cannot repeal will be nearly £2 billion a year.

Not to mention the fact that we are on the hook for the bail outs of Eurozone countries—a measure that our rat-faced Chancellor nodded through.

Then there was the peculiar farce of David Cameron’s trip to Brussels last Thursday, to sign up to an amendment to the EU Treaty creating a European Financial Stability Mechanism. Under this, it is estimated that we may have to stump up £5 billion to help bail out countries such as Portugal, the latest victim in the slow-motion collapse of the euro, even though we are not in the eurozone. (Weren’t we meant to be given a referendum on any further amendments to that EU treaty?)

Ah, no, Christopher. You see, as I pointed out, there are any number of excuses that the government can deploy to get around their pointless referendum lock—Douglas Carswell enunciated a number of them, so feel free to take your pick...

Anyway, to return to the point of this post, overall the Budget was not too bad—despite containing a number of barkingly insane measures. However, the EU remains the elephant in the room, issuing regulations that not only threaten to stifle the Coalition's plans for lighter business regulation but also puts us on the hook to for a likely imminent bail out of Portugal—which could wipe out a great deal of the Coalition's proposed savings.

If we are also required to dip into our pockets to shore up the collapse of the increasingly creaky-looking Spain—whose banks are suspected to have a €100 billion exposure to Portuguese debt—then we will be in real trouble.

Intimately linked to the EU, of course, is the whole Green agenda.

Can we leave yet...?

In the meantime, there are two other Budget points that I want to mention, although I may cover the former in more detail later: that is the move "to introduce a carbon price floor for the power sector". Quite simply, this will make power a hell of a lot more expensive than it currently is—and it has risen considerably over the last ten years.

A rise in power costs will lead to considerable cost rises in just about every damn thing—wiping out any tax advantages that you might gain, and driving inflation upwards.

The final point have been condemned—like the tax on North Sea oil companies—as a piece of absolute insanity...

The Firstbuy scheme would see the government and house builders offer loan help for first-time buyers purchasing a newly-built home.

Buyers must save a deposit worth 5% of their property's value, with the government and housebuilders putting up 10% each through an equity loan, enabling people to qualify for 75% loan-to-value mortgage.

The equity loan would be interest-free for the first five years, with interest charged at 1.75% in year six, and at inflation plus 1% thereafter.

We have just had a near-complete economic collapse driven by people buying houses that they cannot afford: what the government is proposing to do is to help people to buy houses that they cannot afford. However, to many people this measure would appear to be a sensible one.

Why?

Well, despite the supposed problems with bad mortgages, we have not actually seen much of a house price crash in this country—and certainly not in the more affluent south east. However, we have seen a severe contraction in lending by the banks, meaning that first-time buyers are, indeed, finding it difficult to get a mortgage.

This, of course, has impacts all the way up the chain: if the buyers of your first home cannot get a loan, then you cannot sell your first home. And, if you cannot sell your first home, the likelihood is that you will be unable to move to your next house. And the owners of your next house will not be able to move to their next house if you cannot buy theirs, and so on.

As such, as people find it harder to get loans, we will see a truly colossal house price crash start to move through the system. Which means more bad mortgages, the housing market grinding to a halt, builders going to the wall and banks collapsing again.

So, Osborne's proposed idea might be seen to be quite sensible. Except for two things...

This would be funded by the levy on banks, Mr Osborne said. Some £210m will be spent in England, with the other £40m in Wales, Scotland and Northern Ireland.

Riiiight. So, what Osborne will do is to take money from the banks, giving them less capital to lend; he will then filter it through government bureaucracies—which will significantly reduce the amount of money available—and then hand what remains to people so that they can give this reduced sum back to the banks from which it was taken in the first place.

That's absolutely fucking brilliant, George. You moron.

Second, I believe that this fund is only available to those purchasing new builds—which is fine for the building industry, but does absolutely nothing to help the general housing chain. So, despite this £250 million, you still won't be able to find someone to buy your first home so that you can move on to your second.

Let's all look forward to that super new crash, shall we?

Overall, this Budget could have been worse, but let us not delude ourselves—economically, Britain is still in pretty dicey waters. And I fear that is it going to take rather more than this to enable Britain to prosper again.

But, on the bright side, at least George Osborne is not Gordon Brown or Ed Balls...

* Actually, I am the Product Manager but, in a small company, that means that I lead the Development team and, at least partly, design the software. Part of my remit is to understand our customers' needs, the market at large (including the politics) and the wider technological developments in the web software world. As such, I effectively lead research and development for the company.

** As Timmy explains in the article, assurance is payment against something that will happen, e.g. your funeral costs. Insurance is payment against an event that might happen, e.g. a meteorite falling on your house.