Over the years Mil Williams and I have exchanged views on Twitter and on each other’s blogs. Mil thinks that another five years of Tory rule would be a disaster and so we should do all possible to see Labour end up with a majority in 2015. I believe that the last thing the country needs right now is a Labour government.
So, let’s see why I am against a Labour administration – which is not to say tat I am in favour of a Tory administration either )although I shall probably end up by viewing it as the best of a bunch of evils). Mind you, what I think matters not. I live in a safe seat so my vote really won’t make any difference one way or the other.
Whilst it is true that the present government has been unable to achieve all it wanted to achieve – indeed all it said it would achieve – I do not agree that they have done all that badly. A profound truth (assuming I am right) is that governments are really not all that powerful. Whether we like it or many large global corporations can do more things that effect the everyday life of each and all of us than can the government. Then there are other global events.
Probably the most significant increase in the cost of living for many people has been the increase in the cost of power. This was way outside the control of the government as it was caused by one such global event. Mr Milliband has realised that this is having a serious impact on many people and so would like to regulate energy prices. That would, in my view, be a disaster (every time any government of any colour tries to control market forces they face innumerable unintended consequences which usually hit the very people they are trying to help).
This tendency on the part of Labour to look at regulation and more regulation as the answer to our problems is, in my view, totally wrong.
Having said that governments have less power than many global companies, there are two areas where they have great influence over what happens here, in the UK: regulation and taxation.
Like all families, the UK family has to earn its own living. That is not to say that every person in the family will be able to create the income the family needs – some will have to depend on others for a variety of reasons. That is the way in families – they look after their own (or they should, to be more accurate).
But the family has to earn its own living. That means creating wealth. That requires wealth creators. If the UK is a difficult place in which to create wealth, those who have it in them to do just that will find somewhere else in which to do it.
It follows that to encourage the creation of wealth we need to reduce the regulations on the wealth creators and create a tax system which is as benign to business as possible. Everything that the present Labour leadership says demonstrates that they just do not understand how business works.
We should accept that the problem with reducing regulation is that many of them were designed to protect the weak and vulnerable (be they workers or customers). Some, and I am one, would argue that the pendulum has swung too far in the direction of protection so that business is hampered in its business of creating wealth and that some corrections are needed.
You cannot create an environment in which nobody is at risk of injury or even death. Far more people are killed or maimed on the roads than are at work – if the risk of death or injury is anathema then all vehicles should be banned forthwith. That will not happen because the people of this country have accepted the risks involved in motorised mobility: a similar “risk assessment” of workplaces is required (and nobody wants to return to the work conditions of Victorian times).
The problem with reducing tax on the wealth creators is that they are already wealthy and there is a reasonable argument that they really should be squeezed until the pips squeak (to quote Dennis Healey). What right have they to have these wonderful lifestyles when millions are far worse off?
There are two answers to that question.
The first is that generally speaking they have earned it. The days of vast inherited wealth are over – we are talking about are people like David and Victoria Beckham, Richard Branson and, of course, those who by some means (not all admirable) have become ultra-rich.
Here we have a problem – these people are so rich that (a) they take very good advice from expensive accountants to ensure that they keep within the law and can afford to risk high legal fees in battles with HMRC (when the legality of their actions is challenged) and (b) they can (and do) go and live elsewhere in order to minimise taxes due in the UK.
I am reminded of something that Jean-Baptiste Colbert said back in the 17th Century: “The art of taxation consists of plucking the goose so as to obtain the most feathers with the least hissing”. Sadly, Labour’s approach has, at times, done the exact opposite. It has been proved that an increase in tax rates above a certain level results in a decrease in the tax take – a pointless exercise.
The second is that these wealthy people employ goods and services – and people. They do not just sit in splendid isolation: they spend their money (which benefits a lot of other people) or they invest it: directly by providing capital for corporations or indirectly to other people (by funding mortgages and bank loans to those businesses).
Thus I see the Labour party diminishing the funds available to spend on the members of the UK family who need support. The Tory approach to welfare strikes me as an example of an attempt to ensure that what money is available is properly targeted. I can see what they are trying to do and have much sympathy with that. Unfortunately it is not working as intended – there is a genuine lack of compassion amongst those tasked with administering such matters as the “bedroom tax”. I am not sure how this can be resolved but I remain convinced that we must somehow live within our means. The era of borrowing (national and personal) on the basis that inflation will gradually eliminate the debt should be consigned to history – apart from anything else it hits hardest those who have lived within their incomes and have saved to look after themselves and their offspring. That is most unfair.
Really, I suppose that what I am saying is that party politics as we have then are no longer fit for purpose.