The link between taxation &
government spending, or the lack of it in some minds
To balance
the UK books and to keep the money markets happy government spending must be
funded by taxation and borrowing. When the money markets think it’s not balanced
we end up in a Trussenomics mess, indeed a catastrophic mess.
The latest
Tory wheeze is to cut Inheritance Tax, a tax cut that only benefits a very
small percentage of the taxpaying public. The vast majority of us will never
encounter it and maybe as little as 5% of us will actually pay IT. Yet this
proposed tax cut is sold by Tories and their tame right-wing press so as to
give the impression that it will benefit the many when it will only benefit the
few.
Some of those
supporting the cut, but not benefiting from it at all, fall for this political
stunt. It would be more honest of the supporters of this move to say ‘put up my
personal taxes instead because I don’t think Inheritance tax is fair’. I’d have
more respect for them if they did because they seem to be living in a world
where you can have something for nothing and decent public services whilst
cutting taxes for the most wealthy.
Wrong-footing Labour
Of course,
the proposed cut is also meant to wrong-foot Labour who don’t like to be seen
as opposing a tax cuts so are muted in response despite such cuts putting them
a worse financial mess if and when they do get control of the public finances.
Politicians
have always tried to give the impression that taxes can be cut without any
effect on public services and that’s one very big reason why our public services
are in such an appalling state. For me Blair started the modern tax cuts/no tax
rises with no consequences rot but he did so when the economy was booming so
tax revenues remained high as we were doing reasonably well. But the grey man Starmer
is in one hell of a hole because our economy is doing badly presently so tax
revenues are not buoyant and we are borrowing to support public services and potentially
even more tax cuts for the few!
It’s likely
that the Tories are running the economy into the buffers, as they know they’ll
lose the next election, so want it to be in a poor state thereby putting Labour
in an impossible position. That’s why, in turn, Labour is backing off the very few
pledges they have previously made and look more Tory by the day.
Electoral Reform
The Tory
thinking will be ‘we know we’re going to take a hammering but when Labour fails
to turn things around we’ll be back in business as voters will blame Starmer,
Reeves and Streeting etc. for not sorting things out or seriously addressing
problems such as the NHS and Social Care crisis’.
Trouble is
Labour do know what’s going on but their leadership steadfastly refuses to
support the only reasonable solution to having another slash and burn Tory government
in 5 or 10 years’ time, electoral reform.
Decent public services
We’ll only
ever have decent public services if they are funded properly, the workers in
vital public services such as the NHS and Social Care are paid wages consistent
with retaining them and we all accept that if we want something for nothing the
consequence will be poor public services. All sounds very logical until some of
us listen to lying politicians telling us we can have something for nothing and
enough of us are fooled again!
The BBC
Another
analogy, which follows the something for nothing line, is the TV License fee.
Many who oppose it also complain that the BBC’s output is poor. A friend of
mine point blank refuses to pay the License Fee and has done for years but
continually complains about how bad BBC programmes are. It’s as though he does
not see, or want to see, that without his contribution and that of others like
him it all adds up to less money hence the poorer output! Yes, by all means
suggest other ways of funding the BBC but don’t complain its output is poor
when it is underfunded; that’s just daft.*
No such thing as something for
nothing
The bottom
line is the something for nothing line is simply nonsense, yet look at the
Scandinavian countries that generally seem to get it right. Yes, their taxes
are high (and so are their wages) but in the main they have high quality public
services.
* I do have issues with the BBC’s
news and current affairs output which, like the rest of its output, is clearly affected
by an ever diminishing budget. But my issues are about its use of political
balance which at times is bizarre. It’s as though they allow one extremist air
time to say whatever nonsense they like but then try to get another opposing
extremist to say just the opposite! How is that good news and current affairs
output?