Punishment

The Tories today came up with a really lovely way to help with reducing the deficit. Not pump prime spending to encourage a recovery, thus leading to a growth led increase in government revenue that will rapidly erode the annual deficit and go some way to reducing the effect on long term debt.

No, raising the retirement age by a year, well ahead of current schedules, so that we all have to work an extra year (well, anyone under 59 will).

Basically, the recession was caused by the last generation of idiotic bankers, egged on by capitalist politicians and pundits – all of whom will be able to retire on a nice bunce ta very much. But the Tories want everyone to share the pain.

Oh, yeah, and hows about shunting thousands of people from incapacity benefit at the same time?

What’s more, I did hear the Tory ‘incentive’ plan to encourage jobs. To give new companies a two year tax break on National Insurance for up to ten employees. Sounds like a good idea, but I see a few flaws. Firstly, what about existing companies? Won’t they be up against subsidised opposition? Seems pretty unfair to me. Secondly, what’s to stop this idea for a tax wheeze: If you already have a small business, close it down and restart it. Bob’s your uncle, a tax break. You don’t need to have ‘created’ any jobs – you could even lay people off and still qualify.

Anyone get the impression that Osborne is just an ingenue?

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Do the Tories care?

A little history first. In the 1990-1, we had a recession in the UK. It was pretty bad, and it was the first one to seriously affect white-collar workers and middle management rather than just the manual trades.

The John Major government, through the genius of Norman Lamont had the job of seeing us through this period, and it was from these two giants that the following phrases came:

“If it isn’t hurting, it isn’t working”

“Unemployment is a price worth paying” (for low inflation)

As a result of their careful stewardship, the 1990s recession took us years to recover from. You can see how compassionate they were about the effects of their policies.

So to today, and have the Conservatives changed? It appears not. While the government is taking action to reduce the threat of recession and to help those affected (rescuing banks, extending lines of credit so that they can lend, reducing VAT, increasing income tax allowances and tax credits, restricting repossessions, assisting small businesses with their tax bills, investing in public services etc etc etc…), all the Conservatives can do is to oppose.

Take our local Tory councillor-blogger Duncan Crow. He’s quick to tell us that everything is the fault of Gordon Brown, but a little reticent to actually come up with any concrete proposals. It’s easy to sit around pronouncing doom and gloom, and using the benefit of hindsight, but surely our ‘natural rulers’ have some actual ideas for how to best deal with the current economic situation.

What is it that the Tories would actually be doing now, if they were in power? Doing nothing didn’t work very well last time, but I seen very little, other than to say whatever the government does is either bad or would have no effect.

For example, when the government announces a cut in VAT by 2.5%, the Tories tell us that it’s insignificant. Yet when they think that VAT may have been going up by 1% it would have been a disaster. Surely it would have less of an effect, being a smaller change, but I don’t suppose such logic comes into play when you are on a mission to oppose the government at all costs

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It’s the Economy, Stupid

Is George Osborne an idiot? Or does he just think that the voters are all fools?

Over the last few weeks, the Tories have been demanding tax cuts, saying that they are the best way to release cash into the hands of people and spur consumer spending and company investment to help take us out of recession.

Then at the weekend, Osborne was saying that we can’t cut taxes because it would cause a run on the pound (which is is bit odd, because the currency rate is not directly related to the government’s finances, it’s to do with the value of the overall economy and predicted returns compared to other nations, and is more likely to be related to the interest rate).

It sounds to me like opposition for the sake of it. You can’t credibly go around contradicting yourself in the space of a few days and expect people to think that you have a clue about how to run the economy. Of course, if your plan is to attack the government for political gain at a time of national uncertainty, it might just work – as long as people don’t have those inconvenient memory things.

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Two kinds of hole

West Sussex have a problem with holes at the moment, it seems.

The first is the kind that any driver, cyclist or motorbike rider in Crawley can tell you about – potholes. There are more and more of these things popping up all over town, along with growing cracks, raised or sunken metalwork, uneven pavements and any other signs of poor maintenance and the use of cheap materials.

To help them to know how people feel about the state of the roads (that we pay our ever increasing Council Tax to WSCC to maintain) a new website has, as trailed, been set up.

If you have tales of potholes that are not being fixed after having been reported, or were the repair is inadequate, pop along and either leave a comment or use the email address: Join the Crawley Potholes Club

One possible reason that WSCC could have for it’s failure to keep our roads up to standard could be that they are rubbish at handling money.

Firstly, they managed to overspend on Fastway by £6 millions and not notice until right at the end of the project. Cause – piss poor project management, and who led the project? West Sussex.

Secondly, when Henry Smith became leader of WSCC it had pretty much no debt. Now, even though they have been flogging off playing fields and old-people’s care homes* they have managed to accrue about £300 millions in long-term debt. Much of this in Government-enabled credit, where WSCC were lent money so that they could build all the new schools and things that Henry would like to take all the credit for. The Government arranged to pay the interest for the first few years, and WSCC should have been working out a way to minimise the balance before that interest holiday ended.

The holiday is over, and instead of reducing their debts, the Tories at County Hall are racking them up further, and the interest is being piled on top.

In contrast, the Tories at Crawley have inherited a well managed pot of money – £100 million. How long before they widdle that lot up the wall as they close down services?

And potholes? Well, I have been looking at the West Sussex council website, and in particular at the amount that they spend on roads. In 2005/6, the amount gross revenue amount spent on Highways and Transport was £63M. In 2006/7, it had fallen by over £5M to £58M. In the same period, they increased Council Tax by over 4%.

What’s more amazing is that in the budget for that year, the Tories has promised to increase spending by several million quid. So are they so inept that they can’t stick to a budget, or were they avoiding spending money on Highways & Transport so that they could pay for the Fastway SNAFU?

Who knows? All I know is that some Tory councillors are more concerned with arguing over who goes to meetings or not, rather than how the authority that they sit on and help run is seemingly unable to handle money. I thought that the Tories were supposed to be savvy with cash…

* I was going to put a note in here about the débacle following the sell-off and contracting out of care services for the elderly, but it deserves a post of its own

Local Tories at Play

The local Tories, having gained control of the Borough Council, have certainly been revealing their true colours.

First they tried to sell tenants a bunch of lies (or were they just ridiculously awful calculations that no-one bothered to check?), but thanks to the tenants, local opposition, the Government of the South East, the Audit Commission and the Advertising Standards Authority they failed. Still, the people of Crawley in their wisdom returned even more Tory councillors last May.

Now they are going for the Play Service. Last year proposals came out to ‘rationalise’ the play areas, which appear to have been put into abeyance for a while. Maidenbower will get a new play area though (which is fine, no problem at all, although the developers should have put it in years ago, not the taxpayers).

Instead of shutting down play areas, looks like the Tories are instead going to close down Play Centres. These are the places that stay open after schools close so that children can play in a secure environment before parents pick them up. They are incredibly popular during school holidays, because parents can’t all get time off in six week blocks.

The two centres that I know of being under the knife are Northgate and Southgate. Southgate has in the last two years voted for a Conservative councillor. In order, presumably, to avoid the risk that people around here see what the Tories are up to and vote accordingly, the decision has been postponed until June.

Typically, the Tories will tell you all about the 2% increase in Council Tax, but won’t tell you which services will be cut as a result. The truth is that they will be hitting the children, and given that delinquency is linked to a lack of provision for kids, adding to the problems of youths hanging around with ‘nothing to do’ until they get into trouble. It’s not just hugging hoodies, it’s increasing the problems for and associated with youth.

Vote Tory – have more kids hanging on the street corners!

Is this value for money?

The Crawley News reports that the Tory leader of Crawley Borough Council went on a 3 day training course in South Africa, partly funded out of the Council budget.

Obviously, Lanzer will justify the cost of the trip, as he learnt a lot and was fired up on his return. The CBC payment only amounted to about £675, which is not a huge amount. The rest was from grants, which may or may not be funded by the national taxpayer.

The course involved looking at ‘law and order’ issues. The thing about this is that the Borough Council doesn’t have a great deal of responsiblity for these. The Police Authority is a seperate body, with delegates from local authorities, but from West Sussex, not Crawley. So Bob Lanzer isn’t on it. He might be on Police Liaison, but that’s not really a ‘leadership’ position.

Of course, councillors do need to be trained up, and they should be exposed to external practices, otherwise they risk being too ingrained in parochialism. However, it appears that there will be some raised eyebrows at this particular item. Especially as the News has put it on their front page this week.

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Inheriting the wind

Inheritance tax. Apparently, it’s a bigger issue for voters than any other political subject.

Why would this be? After all, currently less than 10% of estates are liable to the tax. When it comes to tax, it’s far less widely felt than VAT, National Insurance, Income Tax, or duties on fuel, alcohol and cigarettes. Of course, everybody who owns a newspaper is likely to be affected. Many of the senior journalists on national newspapers and on the TV could potentially be. I’d be surprised if most of the Tory front bench are not likely to need to pay some death duties.

However, the vast majority of people will be totally unaffected by increases to thresholds for Inheritance Tax. So why are people so worked up? Of course, everybody hopes (can I use the Brownite word ‘aspires’) to be rich enough by the time they die to leave a substantial amount. More to the point, everybody secretly hopes that aunty Mabel is sitting on a pile of cash and that she’s put it aside for us. However, the reality is that the average person is unlikely to be so fortunate. Even if you are lucky enough to inherit, say, a 1 million pound estate, the current taxes would still leave you with over £700,000. If aunty Mabel was only worth half a million, you’d get 84% of the value.

The Tories may have wanted to get rid of it completely, but have come up with a new threshold of £1 million. Given that it’s the super-rich who are likely to be able to spend a bit of time and money on tax planning away much of their obligations, and they’d be getting a cut of £280,000 anyway, this would be a long way towards removing the tax completely. Given that the Tories are not telling us that we can cut overall taxes, that means that billions would have to be found somehow.

Alistair Darling has announced changes, which effectively mean that the £300,000 allowance is transferred to a widow(er). As no inheritance tax is liable on estates passed between husband and wife (or, I believe, civil partners), it means that when the remaining partner dies, the estate gets an allowance of £600,000. Fine if you’re married, a but annoying if you aren’t.

Skuds has an idea – rather than tax the estate, why not tax each inheritor according to how much they get? Lateral thinking there.

My feeling is that Inheritance Tax is fair – it’s no more unfair than any other taxation at least – although the quick increase in property values has caused people to worry that the middle classes might come under the cosh (and we can’t have that now, can we?). I think that it would make sense for either the main home to be exempt, or for the average house price to be a factor in determining the allowance (I quite like the idea of a formula rather than the Treasury every now and again picking an arbitrary number for allowances on tax).

Mind you, on a related note, it’s quite odd to hear the Tories complain about their policies being stolen. They nicked the idea of a flat rate for non-domiciles from the Lib Dems (and they attacked it as unworkable at the time).

Bribing the Electorate

Further to my previous post, it seems that the Tories are really trying to prove that they have some policies (having spent the past 18 months proving that David Cameron is a ‘nice guy’ and little else).

The next big idea is tax breaks for married couples. On the basis that marriage will solve all of the social problems in the UK.

Now, I have a lot of respect for marriage. So much so that I am not married because I see it as a serious commitment that should not be entered into lightly. However, if the Tories get in and will pay me £1,000 a year to get married, perhaps I should regard it a less of an onerous promise. Thinking about it, if this is brought in, and it encourages people who are a bit dubious about marriage to get hitched, wouldn’t we see more marriages break up later on (when the people realise that money isn’t the only thing that should keep them together). Then there is the idea that people in failed and abusive marriages are to be encouraged to stay together because of cash. ‘Family Values’, anyone?

The other side to this, of course, is that it will cost over £3 billion to implement. Who is going to pay that extra tax – or who is going to lose the services of the same value? Could it be that single people will pay the price? Or even single parents? Are the children of parents who split up (or where one died) deserving of less support, so that married but childless couples can be better off?

Not to mention that it was actually the Tories who set in place the tax reforms which led to the abolition of the married couples’ allowance in the first place (in 1990, the then Chancellor of the Exchequer, John Major, started the trend to reduce its value). By the time it was abolished ten years later, it was worth about $400 per year, and benefited about 6 million childless couples.

Tesco fined £10,000

More on this (and the original post here).

I was mistaken in that I thought that today one of the Crawley Tesco stores would hear it’s appeal against the decision to suspend it’s alcohol license. In my defence, my information came from the BBC. The appeals for Downland Drive and Dobbins Place are due to be held on the 16th of July.

What actually happened today was the hearing for the Dobbins Place outlet which not only was caught selling alcohol to minors, but also did not have a proper supervisor (equivalent to a licensee for a pub) for a period of over two months.

The multinational corporation has, as a result, been fined £10,000 (source: the Brighton Argus). With takings from alcohol sales of £4,000 a week, I reckon that if the store makes a margin of about 25% of the retail price, the fine has wiped out the profit from that over the period for which the store lacked the proper management cover.

Now, it also happens that this week the Tories are unveiling their new ‘policies’ on Society. One of the ideas from Iain Duncan-Smith’s groupthink session is to combat binge drinking and alcohol abuse by increasing taxes. Apart from the obvious question over the fact that the Tories have spent the last ten years whining about indirect (‘stealth’) taxes and have opposed every Gordon Brown budget which increased duty on alcohol and yet now they propose the exact opposite, should we not start off by enforcing the laws we do have?

In fact, as the councils in Crawley and Worthing are trying to do, having been notified by Sussex Police and West Sussex Trading Standards.

As much as a fine for breaking the law is a positive thing, £10K is hardly going to cause much of a dent to a company the size of Tescos operations, and if a spot check can find three shops in West Sussex which freely sell booze to minors, it would appear that the problem is more widespread (and that’s before we even consider other outlets). Rather than increasing taxes for all drinkers, encouraging a black market and annoying much of the country, couldn’t we just get the government to enforce the laws that are in place?

Labour’s 41 Stealth Tax CUTS

We all know about ‘stealth taxes’. The Daily Mail will relish in describing how Middle England is being ravished by a miriad of tax increases, all introduced in secret by the evil gnome Gordon Brown. Such as in this article: Tax rises under Labour

Gosh. Thats a lot.

But wait, Gordon Brown doesn’t just raise taxes. He also cuts them. In effect, the ‘tax burden’ or the average amount we pay in tax is about the same as in 1997, it’s just that the balance between the lower earners and higher earners has shifted. ‘Middle England’ is really not that badly off – How often do we see figures of ‘£50,000’ or ‘£100,000’ as ‘middle england’ type wages or household incomes, and how many people actually have that kind of money coming in? The Average salary is less than £25,000.

But, courtesy of snowflake who got the details from the Treasury, I can list 41 of the tax cuts since 1997 you may not even have noticed! Now we can reveal how that sneaky Mr Brown has been putting money right into your pocket. Do you wonder why you feel better off under Labour, while people around you are moaning…

1. Cutting VAT on domestic fuel (electicity and gas) from 8% in 1997 to 5% now.

2. Cutting basic income tax from 23% in 1997 to 22%.

3. Introduction of the 10p starting rate of tax (lowest starting rate since 1962) for £2150 of earnings above the personal allowance.

4. Cutting large company corporation tax from 33% to 30%

5. Cutting small business corporation tax from 23% to 19%

6. Capital gain tax for long term business assets cut from 40% to 10%

7. Stamp Duty threshold raised from £60,000 in 1997 to £125,000 now

8. Vehicle excise duty for 38 tonne and 41 tonne lorries cut by 500 pounds; the 40 tonne class lorries rate cut by 1,800 pounds; for all other heavy lorries rates frozen. (2000 budget)

9. Abolition of the 2% employee N.I. “entry fee” payable on earnings from £0 – LEL, when earnings crossed the lower earnings limit.

10. Abolition of the 3% employer N.I. “entry fee” payable on earnings from £0 – LEL, when earnings crossed the lower earnings limit.

11. Abolition of the “stepped” employer N.I. rates, saving companies administration hassles.

12. Alignment of the LEL with the Income tax personal allowance. This involved increasing the LEL sharply from £64 per week in 1998 to £87 in 2001 and £97 per week today, which means the exempt threshold has increased by 51% since 1998 (or at a rate of 5.33% per annum, considerably faster than the rate of inflation).

13. Class 2 flat rate of self-employed N.I. reduced from £6.55 to £2.10 per week.

14. Freeze on duty on spirits since 1997.

15. Employee shareholders capital gains tax cut to 10%

16. Business investors in new and unquoted companies who invest between 5% and 25% have capital gains tax cut to 10% on investments above 5% held for four or more years

17. For small and medium companies, the 40% capital allowances are made permanent

18. Research and development tax relief introduced for business

19. Tax relief for intellectual property and goodwill introduced (2001 budget)

20. Abolition of withholding tax on payments of interest and royalties between companies in the UK.

21. Abolition of withholding tax on interest paid on international bonds

22. Working families tax credit introduced

23. Child tax credit introduced and extended for families who earn £58,000 and below

24. Introduction of stakeholder pensions which for the first time are available to the unwaged, giving then a tax-free savings vehicle where a contribution up to £2808 also attracts tax relief of 22%.

25. For businesses with turnover of up to £58,000, VAT is not charged at all.

26. To bring disused properties back into use, VAT on residential property conversions cut from 17.5% to 5%

27. For cleaning up contaminated land, an accelerated tax relief, set at 150%

28. To help revitalise high streets, government provided 150% first year capital allowances for bringing empty flats over shops back into the residential market.

29. For churchs, for repairs started after April 1st 2001, a new grant, the equivalent of a VAT reduction from 17.5% to 5%. This was further abolished to 0% in the 2004 budget.

30. Vehicle excise duty abolished for tractors

31. Betting duty abolished for pools.

32. Exemption for companies from corporation tax on the gains from the sale of substantial shareholdings. (2002 budget)

33. Automatic entitlement for business to reclaim VAT on bad debts after six months, introduced for the first time.

34. Betting duty abolished for bingo players

35. A 20p per litre reduction in fuel-duty for bio-ethanol

36. A 20p per litre reduction in fuel-duty for bio-diesal

37. Fuel-duty frozen for petrol and diesal since 2003.

38. Halving of beer duty for pubs that brew their own beer

39. People with disabilities who got back to work entitled to tax credit

40. Child-care tax-credit introduced for people who place their children in nurseries

41. Vehicle excise duty cut to £0 for cars emitting less than 100 CO2 g/km (saving of £65), cut to £40 for cars emitting between 101-120 CO2 g/km (saving of £35) and cut to £100 for cars emitting 121-150 CO2 g/km (saving of £5).

Please note that while the Mail lists 80 rises, they had more time than snowflake to do the research, and they put every single year for Council Tax (so if it was the Tory County Council who whacked up the bill, they still blame Labour). There may be more than these 41 cuts. Who knows, that Brown is so sneaky, he could be cutting more taxes AS YOU READ THIS!!!

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