Sunday, July 25, 2010

An open letter to UK’s Cameron and Clegg

My weekly opinion article in the on line African magazine. Link in title above.

The UK is experiencing something new – a real coalition in government. It is producing some interesting ideas and initiatives after so many years of New Labour, the party now in search of a leader. Before the election we knew that the real problem was the budget deficit.

Economies are necessary. Government borrowing is out of control. We even subsidised banks for fear of financial collapse. The big battle as ever is where the cuts come and who is to pay more. With an increase in VAT we will all pay more in indirect taxes. My pay slip shows I pay over a quarter of my income in direct taxation. Nearly another quarter is taken by indirect taxation.
Two areas for economies I favour have yet to be tackled. First, the growth of the public sector. People want the state to take care of them and provide public services. They would rather rely on the state than trust in God for security and take personal responsibility. The state encourages this idolatry. It grows and grows, controlling just about every aspect of life and encouraging dependency. Shrink the state, encourage people to work and the economy will be transformed.

But asking politicians to shrink the state and curtail its interference in all of life is asking the turkeys to vote for Christmas. We do not need the ridiculous expense of devolved government in Scotland and Wales. Get rid of it. Leave the European Union, a leviathan not to be trusted for it has no audited accounts. Let Westminster take full responsibility and get back to governing the UK on its own. If the Celtic fringes do not like this, let England give them their freedom and be economically richer for it. (Apologies to Her Majesty for suggesting this diminution of the last remnants of empire).

So, get rid of devolved government and back to being a sovereign state instead of a province of the EU. Shrink the public sector, all those unnecessary bums on public seats enforcing myriad regulations and collecting statistics. First of all, sack anyone who tells a poor person they will be better off out of work and on benefits. Of course, if you are to do this you will have to radically reform the system so that people realise that work is better than dependency. I speak from personal experience. I have had two employees, both single mothers, who were informed that the way out of their financial difficulties was not to earn more and manage their debts better but simply to stop working and take the hand outs on offer. One left my employ. One has gone part time and joined the black economy on the side. Neither of them wanted this advice. Both of them wanted to work for me full time. The system stinks. Reform it. Of course we must take care of those in real need but too many people play a system, which does not encourage them to take responsibility for their own finances.

Next, reform housing benefits. The neighbouring house to ours is newly enlarged so that the owner can get more rent from his property. Tenants are always on housing benefit. He can charge them a commercial rent. I am enriching this landlord through my taxes when the state subsidises his tenants. This is a factor in the increase of house prices over the years. Our property is now worth ten times what we paid for it in 1984 but my salary has only risen nearly five fold in that time. High rents are a factor in our shortage of affordable accommodation. Reform this subsidy of rented housing and rents will be reduced and housing prices fall making housing more affordable. So I suggest for starters a big increase in the taxation of the landlords’ rental income and property taxes on houses that are not owner occupied.

Do I ever expect this to happen? Of course not. Not when our politicians often come from that small proportion of the population who have more than one property to call home. Members of Parliament get the biggest housing benefits of all.

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