Blog 2023 Malcolm Blair-Robinson

National Insurance

This has become an election issue. It appears to be a good Tory move, in line with their supposed philosophy of being a low tax party. Cameron explains it better than Osborne, yet neither explain convincingly how it is to be paid for. Nevertheless the slight widening of the Tory lead in the polls is holding steady, so it has done them no harm. Moreover it puts them in the limelight, making the running, with Labour responding. This is a much better campaign position for them.

How to pay for it is a good point. All these efficiency savings are spent many times over and are not comparable to expenditure, simply because spending is factual from the beginning, efficiencies only so after they have been achieved, which will be after the expenditure has been paid for. It raises a wider issue. As a society we expect from Government, both local and national, more than we are willing to pay for willingly in taxation. At the moment by a huge margin.

Moreover there is too much emphasis on tax rates and too little on tax take. We do not really know whether one cancels the other in many cases. We need a much more clear cut approach. We need a clear idea of what we want to spend. We need a clear idea how much tax must be raised. We need a simple balance between tax on income and tax on spending which is open and transparent as well as cheap to run. None of this do we have at present and none of the parties are offering it.

We also need to ask whether in present circumstances we should be offering everything free to everyone. Have we got this right? It is right that  those on the tiniest incomes to say £25000 a year get free healthcare, but those on £150,000? Is that right? If so why? Now that so many are earning so much should we give freebies to those who do not need them? Politicians think they can win elections on the promise of tax cuts and lose them if they talk about service cuts. The problem is they have promised and provided more than there is money coming in to pay for. Hoping for economic recovery will ease, but not resolve, this fundamental problem of too much spending with too little income.

The time is fast arriving when we really will have to grasp this nettle. It will sting. According to ancient wisdoms, nettles are very good medicine. It will work better if the dose is seen to be socially just and fair.

This entry was posted on Thursday, April 1st, 2010 at 4:56 pm and is filed under Malcolm Blair Robinson. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.