George Osborne

George Osborne’s Last Straw vs My Back

Samuel Hooper2 Comments

George Osborne is receiving a lot of stick for his last-minute decision to postpone the planned 3p/litre increase in fuel tax left intact in his most recent, politically disastrous budget. Most recently he has been accused of cowardice for sending an unprepared junior minister – Economic Secretary Chloe Smith – to defend the government’s short notice U-turn on the BBC’s flagship ‘Newsnight’ programme.

Reports The Telegraph:

Chloe Smith last night strugged to answer questions about the decision to postpone the 3p rise in petrol duty.

After she refused to say when she found out about it or how it will be funded, the Economic Secretary was accused of being “incompetent” by Jeremy Paxman, the BBC’s Newsnight interviewer.

Mr Paxman also asked her whether she ever woke up and thought: “My God, what am I going to be told today?”

I think that we can now safely add political incompetence to the list of charges being levelled against Mr. Osborne in the wake of this all-too-avoidable mess up.

This is supposed to be a Conservative-led, tax-cutting government. It was bad enough that the 3p/litre increase in fuel duty was allowed to remain in George Osborne’s most recent budget in the first place, but the fact that it’s postponement was only announced yesterday, and that senior ministers had no prior notice whatsoever is an almost unforgivable act of political stupidity, for which David Cameron was predictably savaged during Prime Minister’s Questions today.

But more concerning to me even than the incompetent way that this – and almost every single other political decision of any significance recently – has been handled by the government is the fact that the Conservatives are boasting about their policy U-turn and rather petulantly demanding praise for their actions.

Take this typical tweet from Robert Halfon MP:

“In Welsh questions said to Minister that stoppage of August fuel tax rise means £16 million injected into Welsh economy”

I despair, I really do. I thought that it was only in the dystopian, nightmarish land that was Gordon Brown’s Britain that cancelling a planned tax increase could be said in any way to be injecting cash into the economy. How is making the decision to not do something monumentally stupid and increase a key tax that would punish many already-squeezed households in any way an injection of cash into the economy? At best it could very charitably be called a preservation of the status quo, or the maintenance of steady-state, though given the economic uncertainty created by arbitrary and last-minute changes of key fiscal policy such as this, even that assessment is doubtful.

This is almost as bad as the risible time when a desperate Gordon Brown and Peter Mandelson tried to claim that the Conservatives’ election manifesto promise to cancel the planned increase in employers’ National Insurance tax contributions would “take millions of pounds out of the economy”, as though the state were the ‘real economy’ and not the other way around.

I’m done with all this, I really am. I actively campaigned for the Conservative Party at the last general election in 2010. I delivered leaflets, probably annoyed my friends on Facebook and Twitter with my political posts, and talked to countless people on the high street. And for my efforts, and those of all the many people who did far more than me to try to end Labour’s grip on power in this country, all we get is a government with a broken political radar, one which betrays core conservative principles and apparently one which pouts and expects praise and candy for doing precisely the things that it should be doing without any outside pressure from their political base, such as not raising taxes on squeezed households during a recession.

Michael Gove for PM, as soon as possible. Anyone else with me?

In Praise of David Laws

Samuel HooperLeave a comment

David Laws

 

Yesterday I recently read some of the most refreshing words on economic policy to have been uttered by a British politician in recent months, and they came not from a Conservative but from a Liberal Democrat MP.

In an interview with the Sunday Telegraph, David Laws, briefly Chief Secretary to the Treasury but now a lowly backbencher, made the case for reduced tax rates, deeper (but more wisely targeted) cuts in public spending and reform of the public sector:

… Mr Laws said the share of the economy accounted for by the state was “out of kilter” with the amount of tax the public were willing to pay.

Only spending on health, education and pensions should not fall as a share of GDP, the MP said.

The former chief secretary to the Treasury’s views will alarm many Lib Dems who have opposed the Coalition’s spending cuts. However,

Mr Laws argues that cutting state spending would be in keeping with the founding fathers of the Liberal Party.

“Even after the existing fiscal consolidations, state spending will account for some 40 per cent of GDP, a figure that would have shocked not only Adam Smith, William Gladstone, and John Stuart Mill, but also John Maynard Keynes and David Lloyd George,” he says.

“The implication of the state spending 40 per cent of national income is that there is likely to be too much resource misallocation and too much waste and inefficiency.”

Too much resource misallocation and too much waste and inefficiency. Yes!

I have found it irritating beyond measure to see minister after government minister talk about the need to reduce the ridiculous proportion of national output accounted for by government spending as a sad necessity resulting from the economic recession rather than as something desirable as an end in itself. When critics accuse the Conservative-led coalition government of using the recession as a trojan horse to impose ideologically-inspired reductions in the size of the state, I actually wish that they had the impetus to do just that – but this accusation greatly overestimates the political savvy and core convictions of the current Conservative Party leadership and instead, government spending continues to increase in real terms, and no big-name Tories are speaking out in favour of a leaner public sector.

David Laws (together with other likeminded libertarian-leaning types such as Michael Gove MP) is one of the few politicians to actually come out and make the case that the British public sector has grown far too large and bloated, and that reducing its size is both necessary and worthy, not just because of the present economic difficulties but because it is the right thing to do.

But why do we only hear this call for a  from a backbench Liberal Democrat MP and not from a frontbencher in the Conservative party, who should hold these views just as dearly? Why isn’t David Cameron acting as head cheerleader for shrinking government and making the case that important services can still be provided – often to a higher standard – when the government does not have ownership of them? Where is George Osborne, and where are the urgently-needed supply-side reforms so glaringly missing from his last Budget?

In short, why did I campaign for and help the Conservative Party fight the last general election, when it has fallen to a Liberal Democrat to make the case for a small, lean state and for economic liberty?

George Osborne Must Avoid The Urge To Become A Control Freak

Samuel Hooper4 Comments

George Osborne - Chancellor of the Exchequer - Budget

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This well-written piece from The Freedom Association is worth reading, warning the Chancellor of the Exchequer to avoid raising taxes on beer in his upcoming budget announcement.

As an avid beer drinker myself, I can argue from a position of self-interest alone that it would be bad to raise the level of tax on a pint of beer.

But let’s forget about that particular issue for a moment, and concentrate instead on the ludicrous yearly spectacle of the Chancellor of the Exchequer standing at the despatch box in the House of Commons, and reeling off a list of everyday products that he intends to extract more tax from in the coming year.

Could there be a greater example of heavy-handed, over-centralised, petty, British authoritarianism than this?

Why should the central government, in addition to raiding our personal incomes and (if we are so fortunate as to have them) corporate profits or capital gains, also be allowed to decide that it wants a slice of the pie every time we buy a pint at the local pub, or a pack of cigarettes, or a bottle of wine to drink at dinner?

Is the punishingly high rate of VAT (currently 20%) paid on most goods insufficient? Are the higher (40%) and top (50%) rates of income tax not enough, or the additional national insurance “contributions” that we all make (an additional tax in all but name, meaning that the highest marginal rate of income tax is now well over 50% – why bother to work at all when the government snatches more than half of every pound you make before it even hits your bank account?)

Since the Second World War, and for some time before, government in Britain – and the raising and spending of government funds – have been far too centralised. Wouldn’t it be a wonderful thing if taxes were simplified in this country, so that there was one deduction for income tax, one for VAT, one for capital gains, one for corporation tax and nothing else to worry about? Forget “national insurance” and sneaky tax increases on a pint of cider here, or a pack of cigarettes there, or doubling the tax we pay for the privilege of passing through any of Britain’s dilapidated airports (air passenger duty), or any other thing that the Chancellor thinks he can extract revenue from?

If that’s an impossible pipe dream, how about restoring some semblance of a link between the stealth taxes that are raised and what that money is spent on, so that I can be reasonably sure that the ridiculous amount of tax I pay when I fly from Heathrow Airport actually goes to make air travel or general transport better in this country, rather than being added to some massive central pot and disbursed to fund a score of other schemes that I probably either object to, or don’t benefit from?

And since no government will ever do this in the foreseeable future, can we at least implement Ben Gummer MP’s idea to give each taxpayer a yearly statement, personalised for their salary and annual tax contributions, showing where their contributions are going.

And when, for example,  people buy petrol at the pump (or rather, go inside the shop to pay, because this is Britain and paying at the pump is still proving too great a technical feat for us to master in 2012), it would be nice if the receipts would show the original price charged by the company, and then the price payable by the consumer once the onerously high rate of fuel duty is added on.

Government should be transparent, open and accountable, and I for one would like to see where my money is going.