Standard forms of evasion….
So, it was worth holding your breath for since the promised tax on banker bonuses did happen. It was well trailed and will be well received I believe; so, it is a little disappointing to see us condemn it as ‘impractical’ and therefore by implication pointless measure. I am beginning to suspect this is a standard form of evasion we employ when a Labour government takes an essentially correct measure that addresses the side of ‘fairness’ that means the wealthier and therefore more able pay their way.
It gets us around actually being seen to oppose it (so we don’t alienate Labour voters) but makes us sound critical enough that we can’t be accused of acceptance and therefore scare-off voters in the vulnerable southern seats. The rich and well-off will always try and avoid tax; even our ‘Mansion Tax’ is vulnerable to evasion so the point of its likelihood does nothing to invalidate the correctness of the core principle.
If there are problems with implementing such a tax then it is fair to raise them on a technical level but this should not detract from an open statement of support for the principle inherent in the measures.The real problem with the ‘windfall tax’ is it goes nowhere near far enough. It should be followed by a ‘Tobin Tax’; something Nick Clegg mysteriously sees as unworkable at precisely the moment when the international community is starting to talk seriously about the practicalities of its introduction.
Much of Alistair Darling’s ‘Pre-Budget Report’ was actually good and that which wasn’t isn’t within our gift to criticise. For example, the notion that £2.5 billion should be spent in Afghanistan is abhorrent but it is worse that this money should be spent and National Insurance Contributions should, in the next breath, be raised by 0.5% for both employers and employees. It does not matter that this will not come into effect until 2011; the signal sent out to potential employers is still wrong and counterproductive, making the money earmarked to combat unemployment of questionable impact-value.
Also, this outlay is outrageous while at the same time asking the entire civil service to except a cap on pay rises of 1%. Justified for the top-end but in a deflationary crisis wrong for those lower down the scale in terms of ‘fairness’ and economically counterproductive in terms of stimulating growth. Whether our proposals or Labour’s turn out to be ‘fairer’ will depend on how inflation behaves.
Predictably, the Conservatives have focused on the size of the debt and promised to wave a magic wand and make it disappear. The ‘Debt Panic’ really is totally divorced from economic reality and is a purely ideological construct and shows that a Conservative government is a real threat to both Britain’s economy and those caught in the aftermath of the financial landslide. Even Conservative Home tacitly acknowledges the lack of a positive Conservative economic strategy saying George Osborne must become ‘Mr Growth’ though how he is supposed to do this weighed down with the ideological baggage that states that the way to rapid growth is rapid spending cuts is beyond me. You can see how this would impact the poor in its championing of this proposal from the Institute of Directors;
Cancellation of proposed increases in National Insurance and the top rate of Income Tax – funded by higher VAT.
I agree about National Insurance but making the consumer fund tax breaks for the wealthy is defiantly not ‘Red Toryism’ and more ‘Real Toryism’; besides funding the maintenance of National Insurance at current levels this way is the living definition of robbing Peter to pay Paul.
It was a pre-election pre-budget report (something that really shouldn’t be surprising, politicians play politics) and it will be interesting to see if Labour’s ‘poll bounce’ continues; I rather think it will…..