Wednesday, 26 November 2008

The budget that wasn't a budget

It would be an understatement to say that I'm underwhelmed by Alastair Darling's latest tinkering; for reasons I've discussed many times, I don't think that the solutions on offer are going to save the world's financial institutions, merely ensure that Britain owes them an inconceivable amount of money.

What would I have liked to have seen? To the extent that money being put into the economy may at least cushion the worse of the recession, I would have liked to have seen the return of the 10p tax rate, and extending further upwards than before. Since those with low earnings are the most likely to spend their money it would tend to boost trade too. But doing that would of course require the Government to admit that they had been wrong to abolish it in the first place.

As far as possible, I'd have funded the tax cut by getting rid of most of the allowances and other mechanisms that enable the wealthy and big businesses to avoid paying taxes. An end to offshore subsidiaries selling 'services' to their UK parents for starters. An end to trust funds whose primary objective is to transfer property down succeeding generations of a family without the inconvenience of having to pay death duties. A firm clampdown on tax havens.

I suspect those two measures alone would fund the tax reductions, and have a far greater effect in reducing inequality in our society.

While we're about it, bin the ludicrously expensive, pointless and unwanted Identity Card scheme. If the Government were prepared to admit they'd got it wrong on that one they'd be able to save a few bob, that's for sure.

Trident. Do we need to renew it? No of course we don't.

VAT? Forget it; bringing it down to 15% is little more than pissing in the wind. Laughable. Some things are best left alone.

If our economy picks up, it will be because other rather better run economies have improved rather than the result of any efforts on the part of our Chancellor. He'd have served us far better if he'd looked for a way forward that called time on our credit culture once and for all. Even allowing for the unpopular nature of such a route, I'm not sure Mr Darling has even grasped the need to consider it.

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