Wednesday, 22 April 2009

Poison the well

Since Alistair Darling finished his speech and sat down to the cynical applause of the New Labour backbenches, I had been struggling to make sense of today's budget. I have downloaded the budget statement from the Treasury website. But it is hard work digging through the morass of political cliches that have become the hallmark of New Labour budgets.

However, as my two previous posts amply demonstrate, this budget has comprehensively destroyed public finances for a least a generation. New Labour have generated the largest series of fiscal deficits and the most rapid growth in public debt since Hitler was contemplating the relative merits of cyanide and a bullet.

As usual the press have been distracted by a cheap publicity seeking move by New Labor. Journalist have focused on the income tax hike for the wealthy. It is an non-issue. There will be no brain drain and there will be no additional revenues from this headline grabbing measure.

Broadly speaking, there are only three groups of people who have large enough salaries to be potentially affected by this tax change. First, we have the bankers. Since the summer of 2007, banks across the planet have fired battalions of bankers. There is a worldwide surplus. Any UK banker wishing to try their luck abroad has my blessing. Go forth, my son. Try your best, but I suspect the pickings abroad are bare.

The second group are found in the public sector. These are the new Labour managers and consultants who have bled the taxpayer dry. These parasites are not going anywhere either. Although, it would be great if they tried.

The last group is found amongst the professional classes; lawyers and accountants. Again, the vast majority are closely tied to the UK.

Anyone else earning in excess of a hundred grand is probably an entrepreneur and they can hide their earnings in a thousand ways. So, the bottom line is no one is leaving, and very few will be paying anything extra.

The real story behind its budget is next year's election and the one after that. This is a "poison the well" budget. Brown, Darling and the rest of the New Labour crew know that the game is up. The election was lost 18 months ago. New Labour has nothing to lose and everything to gain from a totally irresponsible and reckless budget.

When they are finally kicked out of office, they will leave a fiscal disaster for the Conservatives. It will be Cameron and Osborne who will have to clean up this grotesque mess. It will be the Conservatives who will have to hike taxes, and cut public expenditure. While they are doing it, New Labour can relax on the opposition benches and point the finger at the callous Conservatives. Then, perhaps, five years down the track, New Labour might return to wreck public finances once again.


electro-kevin said...
This comment has been removed by the author.
electro-kevin said...

This is why I've said repeatedly on Guido over the year that the Tories must throw the next election.

They can't fix this mess and nor can they win. Nu Lab are experts only in sabotage and character assassination.

(Poison well is a far better expression than scorched earth btw.)

Man in a Shed said...

The 50% tax is all about politics, it won't raise significant sums. But it occupies the headlines and will support Brown's back to class hate agenda.

We should win and then do the job properly. That means putting a stake through the heart of socialism once and for all.

Mark Wadsworth said...

Re what EK says, I was always under the impression that the Tories threw the 2005 election because they guessed correctly that things would go *pop* fairly soon.

The next election is well worth winning because whatever you do, you can always blame it on Labour.

CityUnslicker said...

Maybe the Tories will bottle it too. Then the IMF can come in and do what our politico's won't do.

The politico's then howl at the IMF and blame them for everything, neatly side-stepping the blamestorming.

This is what banana republics do; this is where we are going.

Bill Quango MP said...

I have such low expectations of New Labour. I feel like the parent of a backward child who is overjoyed if the child can just tap the tambourine with their hand, never mind if its in time with the other kids.
Its almost impossible to be disappointed by such simple pleasure.

Sadly NL can't manage even that.
Any child of any intelligence could point to the skateboard half bowl U-shaped growth decline/rise graph of Darling's and see it would take a mighty great leap of faith to believe that was a likely projection.

Yet the retail numbers are not too bad. Tackling construction/car manufacturing is not a bad idea.Pick up the worst performers to help speed the overall recovery.
But why always smothered in the red flag of command economies.

Anonymous said...

But there is colossal fat to be trimmed. If the new government has the balls to attack immediately the public sector pensions: get rid if the BBC; end the pointless interference society - ID cards, cameras, etc; hacks the state in ways Mrs T was afraid of, then there is a chance we can escape from this mess before the next again election is due. They need to be brave and bold. And putting Baldrick on trial for negligence would be a good thing too.

Anonymous said...

One flaw in your argument for a return to Labour after one term of Conservatism occurs to me.

The pensioners and soon to retire generation are being have been comprehensively *****ed by Labour on pensions and care of the elderly and so on. The demographics mean these make up a large portion of the population and a larger portion of the _voting_ electorate.

Having long anticipated a house price crash, I never expected to be seeing the financial hit that is being suffered by the over 55's.

AntiCitizenOne said...

When a plane stalls it's wise to get rid of whatever is causing drag (tax) and not only fight the urge to pull the stick backwards (raise tax), but to push it forwards (lower tax) to regain speed (economic growth).

If you are not the pilot (P.M.) then it is wise to use the parachute (emigrate) as you will be a lot better off outside (abroad) than on-board the crashing plane (U.K.).

Laban said...

Won't any private sector types on 150K+ just do a salary sacrifce deal with the employers and have the pension funded (tax and NI free) by the employer ?

Anonymous said...

AC: "Anyone else earning in excess of a hundred grand is probably an entrepreneur and they can hide their earnings in a thousand ways."

Don't forget the MPs, with all their lying thieving graft, there are a good many on more than £100,000

Mark Wardsworth: "The next election is well worth winning because whatever you do, you can always blame it on Labour."

Yes fer Christ sake! MadNewLabour are still trying to blame the Tories a decade and some later.

Anonymous said...

Here is a question. Why would anyone who can't avoid the tax not just give everything over £150k to a charity of their choice and not use Gift Aid (thereby claiming the full 50% back in their tax return.)

If it is a choice between 50% to New Labour and 50% to their wallet or 50% to a charity and 50% to their wallet I know what most disgruntled voters would choose.

electro-kevin said...

For Mark Wordsworth.

I think I see our various problems holistically. Crime, dependancy, delinquency and uncontrolled immigration are all exacerbated by welfare - welfarism is but another word for socialism and in order to disguise the failings of socialism they've devalued so many things including our education system. Welfare has become corrosive and poisonous.

The socialist experiment is being tested to destruction in all things including our economy.

I don't feel that the Tories have the mettle to dismantle the welfare state (they are leftist by historical comparison). We must be rid of welfarism in its present form if we are to mend our society. The only way I can see it being dismantled is involuntarily through economic catastrophe. The Tory front bench are simply not up to the job. A bit of austerity and hardship may bring to the fore the man of the hour. Make or break for sure, but that's how dire I think Britain's condition is in all areas.

In short the Tories need to be radicalised in order to drag British politics back to the center of the political spectrum once more.

Anonymous said...

MPs hardly count - there are only 650 of them. You can't be an expat MP.

fajensen said...

MPs hardly count - there are only 650 of them. You can't be an expat MP.You silly twit, you ;-)

What purpose does the majority of the EU serve other than as a repository & very benevolent retirement fund for the most useless of our political "elite" - the ones that are in fact so useless that they need to be kept away from all media lest they make a mess of themselves*!

Then there is the UN, World Bank e.t.c. same old, same old.

Note that the EU's general incompetence and corruption(there are exceptions!) nicely diverts attention from whatever evil garbage our new Politburo, the EU commission, is about to inflict on the population. The system works as designed - and it desperately needs smashing.