George, can you hear the pips squeaking?

Listening to the budget I think any sensible person would agree with the soundbites coming from the Chancellor of the Exchequer. As a reminder, George Osborne talked of rewarding work, committing to dealing with the debt, making the tax system simpler, and lifting the poorest out of tax; all very laudable, and, superficially at least, entirely supportable aims.

Talk is cheap, it is action that counts, and here is where the Chancellor failed. The middle has been squeezed, pensioners are worse off, and yet the very wealthiest are made wealthier. The detail will be discussed in much better places than this blog, but I think as a brief summation Ed Miliband got it spot on: we now know that we are not all in it together.

There has got to be a moral dimension to taxation policy. When the 50% tax rate is derided as not collecting as much as predicted I see this as largely irrelevant. The evidence I have gathered in doorstep conversations over the years is the people want fairness. I see no fairness in cutting taxes for the rich, not when the rest of us are hurting.

Whilst those who earn more than £150000 will be grateful for the boost to take-home pay, those who now find themselves paying 40% as this threshold kicks in earlier will wonder why the incentive argument does not apply to them. George is squeezing the middle until the pips squeak.

Tax is used to modify behaviour. Tax on tobacco, aside from the revenue considerations, is also seen as a tool to wean nicotine addicts from their drug of choice. I am an ex-smoker; I had my last cigarette on 19th February 1982. Knowing this date so well is testament to the draw of this enjoyable, if ultimately destructive, habit. I gave up as an aide to increasing longevity. I cannot recall the price of a packet of 20 in 1982, but one of the headline figures from today’s budget will doubtless be the 37p hike in the price of a packet of fags.

Oh George, what have you done?

Three years ago this country entered the deepest recession for seventy years, brought about by an international banking crisis. The last government steered us through some choppy waters and we emerged from the recession last year. They bequeathed the incoming coalition some very positive economic indicators.

In less than a year we have lurched from good growth figures to negative growth. This gives me no cheer, despite my repeated warnings that the coalition’s plans were bad and destructive. The cuts are not only going to be catastrophic for public services, it is damaging the economy.

With rising taxes and unemployment it is no wonder that public confidence is failing. The coalition’s plans for dealing with the deficit are cuts that go too deep, too fast, and do nothing to stimulate the economy. Growth is needed, and the private sector has not produced it. Remember that Osborne’s promises included job creation in the private sector.

I am no deficit denier; clearly the deficit should be tackled. I do deny that cuts are the only way – I think increased tax take through economic growth would have gone a long way to sorting out our debt. I also think that last year’s recovery was clearly fragile, and the coalition’s plans were too drastic and too soon.

In the eight short months of this Tory government we have seen a bust in double-quick time. 2011 promises to be a painful year.

And what does the Chancellor offer up by way of explanation for the latest set of bad economic figures – snow. Did it never snow during the Labour years?

We need a change of direction, and we need it now.

The Artful Dodger: Gideon, censorship and entropy

As a public service to Daily Mail and Daily telegraph readers denied the opportunity of seeing the Artful Dodger adverts, I have reproduced it here.

For the story behind the censorship see Mail and Telegraph pull anti-tax-dodging ads

See also Artful Dodger ads are causing a stir

entropy :
Inevitable and steady deterioration of a system or society.

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