Just watched Ed Balls on BBC2’s Budget Special. Apart from the unblinking stary eyes, which are always a little disconcerting, I’m finding his position on the economy increasingly confusing.
He says the Government should borrow more in order to drive growth, then criticises it for government borrowing having risen above its projections. He, like most on the opposition benches, goes on endlessly about the “tax cut for millionaires”, i.e. the reduced top rate of income tax. Yet it’s still lower than in any year of the last administration and moreover, the Shadow Chancellor refuses to commit to putting it back up to 50p should Labour return to power. In addition, certain Labour MPs speaking in the House today acknowledged that lowering the tax on beer would actually produce more income. “Dynamic taxation” as the BBC’s Nick Robinson described it.
I’ve long believed that the attack on the top tax rate issue is much more to do with the campaign of Class War than the real purpose of taxation policy, which is to raise the maximum amount of revenue for the country. I’m no expert, but the figures appear to confirm that you get more out of the rich in cash terms by applying lower rates of tax … however counter-intuitive that may sound.
We have to accept that we are in a very deep hole, which has been dug over decades. If the financial meltdown of 2008/9 showed anything, it’s that the worlds’ economies were built on billions of pounds worth of IOUs and non-existent money. It was a disaster waiting to happen. Well it happened and it’s going to be a long and painful clamber to the surface.
In the freelance world, we’re used to fluctuating income. It’s hard for us, or indeed anyone in the private sector, to feel sympathy for public sector workers whose pay rises will “only” be 1% for the next couple of years. The writer and broadcaster Jonathan Maitland was on Sky News last night saying that some people in the organisation he works for had their salaries cut by 50%.
I’ve been a professional composer since 1985 and in the last couple of years I’ve done jobs that on a per minute of music basis have paid less than my very first commission 28 years ago. A 1% annual increase? In the words of Monty Python’s Yorkshiremen, “I dream of a 1% increase.”