The UK National Debt: Why It’s A Problem And How To Tackle It

The UK national debt is a ball and chain around the ankle of our society currently. It is an unnecessary burden which will be passed on to future generations, and I believe that the time has come to put aside party politics aside and agree to a long-term plan of debt elimination.

The recent tweet by Conservative MP Daniel Kawczynski (see below), highlighted three things for me. Firstly, it demonstrated the sheer idiocy of some of our elected representatives; secondly it showed just how far the buck-passing, playground bickering blame-game has embedded itself in Westminster culture; and thirdly, and most importantly, it also showed the extent to which the UK is saddled with enormous debt.

Amongst the retweets and the laughing, it is easy to forget that the topic of the tweet is where the importance lies, not in the ill-judged tweet itself. The growing national debt is a serious issue and it needs addressing.

Continue reading “The UK National Debt: Why It’s A Problem And How To Tackle It”

Despite Natalie Bennett’s Fumbling, The Money Is Available

Following Natalie Bennett’s car crash interview last month, I have decided to compile a list of get out clauses (for want of a better phrase) that she, or any member of the Green party, can freely use when backed into a corner on the issue of funding policies.

Bennett’s cringeworthy interview was one of the worst instances of a politician pressing the self-destruct button that I have ever seen. The naivety of Bennett to follow the line of questioning, even when she knew it was heading to disaster, proves that the Green leader still has much to learn.

Though it was very admirable and very human – something many politicians are not – to attempt to answer each and every question that was put to her, Bennett needs to be a little more clever in the future. With the televised debates just around the corner, and the Greens rightly participating in them, we can be sure that Bennett will face another moment in the spotlight, and she needs to be ready for this when it comes.

Many, if not all, of today’s top politicians have been trained and educated in the art of interview giving. It is PR, and it is an essential skill that you are able to hold your own when put under pressure and backed into a corner. With politics still very much a shallow image game, how you react to interviews and questioning can be a make or break moment in your career.

For politicians, and for anyone in the media’s crosshairs, interviews are not an occasion whereby you answer the questions that are given to you. What interviews represent are the opportunity to give the answers you wish to give. When you ask Nigel Farage a question, it will inevitably come back to the issue of immigration. When you ask David Cameron a question, it will inevitably come back to the economy. Politicians give the answers that they want to give, no matter the questions asked.

The reason they do this is because it empowers them. Rather than going blindly into a barrage of “Why is this?”, “What does this mean?”, and “What do you think?”, they have their answers prepared, their strategy dictated, and their chosen battleground in sight. Their strength lies in knowing where their weaknesses are and then managing to avoid them. This is where Bennett failed.

Rather than sticking to what she knew best and going on the attack, Bennett attempted to fight the battle on the ground that most suited the interviewer. As I said this is admirable, especially from a politician, but ultimately it is futile. When faced with questions relating to the funding of their proposed housing policy, Bennett attempted to find answers in the narrow confines that she had set herself. If Bennett had not have taken this route, she would not have faltered as she did.

When faced with the question “And how are you going to pay for that?”, here are just some of the answers Bennett could have given:

Raise Income Tax On Higher Earners
I am no economist, so I do not know the exact figures, but it seems fairly obvious that if you need to generate revenue, you raise the income tax. After being appointed Prime Minister, Cameron lowered the tax rate to 45% for those earning over £150,000. A simple way to generate extra funds would be to raise that figure back to 50% or perhaps even higher. Incidentally, a return to the 50% tax rate for those earning over £150,000 is something Labour are promoting as a policy for the next General Election.

Change The Tax Brackets
In the UK we have three brackets for income tax. These being 20% for those earning between £10,000 and £31,865 a year, 40% for those earning between £31,866 and £150,000, and 45% for those earning over £150,000 a year. France however has five brackets for income tax starting at 5.5%, rising to 14%, then 30%, then 41%, and 45% for the highest earners. This seems like a much fairer and progressive way of doing things, as quite obviously somebody in the UK earning £42,000 a year, and somebody earning £148,000 a year are living completely different lives, and yet they pay the same rate of tax. (Once again I should state that I am no economist, so if someone wished to check the maths and potential revenue on these suggestions then that would be welcome.)

Abolish The Monarchy
Already a policy of the Green party, according to Republic, this measure would save around £299 million a year. Although many would point to the fact that the monarchy is a great source of income for the UK, with high tourism and interest in the royals, it would still prove to be profitable even after they were removed. Take France once again as an example, they have not had a monarchy since September 1792 and yet the palaces, the gardens, and the history still provide the country with hundreds of millions each year. The fact is that monarchy tourism is not about seeing the Queen, just as a trip to Disneyland is not about Mickey Mouse. If one day Mickey were sick, people would still visit. Catherine Bennett of The Guardian – no relation to Natalie Bennett as far as I know – recently highlighted some of the ludicrous expenditures the royal family then charge to the UK tax payer. The worst amongst them was a scheduled flight on a private jet to South Africa for Prince Charles. The cost, £246,160.

Scrap Trident
Another Green policy which Bennett could have called on when fretting over finances is scrapping the nuclear missile system that is Trident. Both in terms of international safety and money-management, this policy seems like a no-brainer. Plaid Cymru, the Scottish National Party, and 75% of Labour’s candidates also wish to abolish the weapons system. The cost of Trident varies between £1.86 billion a year and over £2 billion a year over the space of between 30 and 50 years. Greenpeace have estimated that it could cost as much as £97 billion in order to maintain and update it in the years to come.

Tax Financial Transactions – The Robin Hood Tax
Once again, another already existing Green policy – I feel Bennett may have missed a trick not dropping these into the interview – and one that could bring in a fairly substantial sum each year is the so called Robin Hood Tax. This, as it’s website explains, is a “tiny tax on financial transactions” set at 0.05% and would apply to stocks, bonds, foreign currencies and derivatives. It is believed that this could raise £20 billion a year in extra income.

Introduce a Mansion Tax
Here is one taken from the Labour manifesto, and sure to rile popstars across the UK, Ed Miliband proposes a mansion tax on homes worth more than £2 million. The Institute for Fiscal Studies has said that there is “sensible logic underpinning” the policy which would affect between 50,000 and 110,000 properties, depending on which estate agents valuations you use. Labour believe that this would raise somewhere in the region of £1.2 billion a year.

Stop Sending UK Troops Overseas and Stop Bombing ISIS
Following the disasters that were both Iraq and Afghanistan, this policy should not be too controversial. In 2013, blogging for the Financial Times, Jim Pickard estimated that £33 billion had been spent in the previous two decades on UK military operations overseas – the vast majority of that money was spent on the Afghan invasion. Of course, that money has already been spent, so we cannot get that back, but we can prevent such money being wasted once again. Added to this £33 billion is the often overlooked cost of having to rehabilitate and treat those soldiers and military personnel that return to the UK and need help. Recent studies have shown that this may cost a further £30 billion.
Though touted as the most evil presence on Earth since the Nazis, it is possible that the fight against ISIS is one that the UK should not actively be involved in. As well as the arguments against war and Western imperialism there is also the small matter of the finances. Whilst UK citizens are forced into austerity measures, huge sums of money are quite literally thrown at terrorist forces in the Middle East. Brimstone missiles cost around £155,000 each, Paveway IV bombs cost around £30,000 each, and long-range Storm Shadow missiles are close to £800,000 apiece. Tomahawk missiles are said to be around £500,000 each, and the cost of flying one Tornado jet is around £38,000 an hour.

Day Fines Rather Than Speeding Tickets
A brief shift away from the obvious methods of raising money, this is something that has stuck with me ever since I heard it a few years ago. In a handful of European states fines are paid judged on what a person earns, so this means that when you break the law and you get a fine, the amount you are fined is directly related to your income. A day fine is equivalent to one days pay, a two-day fine is two days pay, and so forth. This method has been used in Finland since 1921, though I recognise it most due to stories from Germany. Most recently in Germany, Borussia Dortmund footballer Marco Reus was given a 90-day fine due to multiple driving offences. This racked up a cost of £427,000.
The Guardian recently ran an article on the issue, which can be found here.

Scrap All MP’s Expenses
Sure to be a winner with the electorate, but unlikely to make you many friends in Parliament would be scrapping all MP’s expenses. With MPs earning roughly £67,000 a year, you would think that they would be able to afford such luxury items as toilet roll holders, ovens, tin openers, and lightbulbs, yet for Labour MP Paul Murphy it seems he could not quite manage. Essentially MPs expenses are benefits for the rich, and seeing as we are here to save money and tackle “scroungers”, this should be the first port of call. MP’s expenses for the year 2013-14 stood at £103 million, money which could be better spent elsewhere.

Increase The Number of People Paying Income Tax
Sounds rather simple to say this, but the more people that are paying tax, the more income is received by the government. The obvious method of increasing income tax revenue is by getting more people into work. Something that the Coalition has prided itself on is the fall in unemployment figures, but these statistics hide the true reality of the situation. It should come as no surprise that the Coalition missed their own target for income tax revenue at the end of 2014, because when you look past the unemployment figures, you see that there are large numbers of people employed in low-paying jobs. Workfare schemes, employers hiring people on zero hour contracts, businesses paying less than the living wage, and many people who are self-employed means that income tax revenue is nowhere near as high as it should be.

Force Tax Avoiding Companies To Pay What They Owe
Whilst we are on the topic of tax, here is another no brainer. A suggestion that is not only morally correct, but also financially correct. Whenever a question is raised asking where funding will come from, this suggestion should be the go to answer, and until every penny is rightfully paid, it should be high on the agenda for all politicians. Companies that owe the UK tax payer money should pay it, and the loopholes that allow them to “get away with it” in the first place should all be closed.
The BBC reported: In 2012 Starbucks had sales of £400 million, but paid no corporation tax. “Amazon, which had sales in the UK of £3.35bn in 2011, only reported a “tax expense” of £1.8m.” Google UK had turnover of £395 million in 2011, and yet they paid just £6 million in tax.
Add to this list the likes of Facebook who have only paid £1 million in corporation tax since 2007; eBay who recently paid less than £1 million in tax despite sales of over £800 million; Boots shifted their headquarters to a post box in Switzerland in order to pay less corporation tax, saving a purported £150 million a year; and Vodafone avoided paying any tax when they sold £84 billion worth of shares in Verizon. And this, it seems, is just the tip of the iceberg. Cadbury, Walkers, Tesco, BP, Shell, dyson, Nando’s, BHS, Maplin, Pizza Express, Pret A Manger, and the Arcadia Group all participate in similar tax avoidance. And this list is by no means complete.

Force Banks To Pay What Is Owed Due To Their Tax Avoidance Schemes
Similar to the suggestion above, all banks that participate in schemes that allow clients to avoid paying tax should be fined, and the activity deemed illegal. The most notorious of the banks that participate in this disgusting practice are Barclays and HSBC. Though Barclays has said that it has closed its tax avoidance unit, between 2007 and 2010 it generated revenue of more than £1 billion a year. HSBC is the latest bank to be hit with criticism after it emerged that the bank helped its clients dodge hundreds of millions of pounds in tax. The 7000 UK clients accounts, held in Switzerland, are valued at over £14 billion, and it is believed that over 1000 of these clients have deliberately avoided tax.

Legalise Marijuana/Cannabis And Then Tax It
This policy is already becoming practice in some states in the US, and has grown in popularity worldwide in recent years. Jamaica have recently chosen to decriminalise it, Portugal decriminalised all drugs 14 years ago, Amsterdam is famous for their coffee shops, Barcelona have now chosen a similar path, and Uruguay have government dispensaries which sell cannabis to those wanting to buy it. It is high time (see what I did there) that the UK join the movement to decriminalise this plant. In Colorado, in 2014, its first full year of recreational marijuana selling, $700 million worth of marijuana was sold. Over $60 million was brought in through taxing the industry in just the first 10 months of the year. The Liberal Democrats are behind a reformed drugs policy, and as it is now widely accepted that the War on Drugs has failed, I am sure there would be many other supporters.
The decriminalisation of cannabis would also have the added effect of saving money and time on policing and law enforcement, and would ultimately lead to fewer criminals and prisoners, saving yet more government expenditure.
As if by magic, here is a piece by The Telegraph written mere hours before I wrote the above. It is entitled: “The economic case for legalising cannabis“.

Nationalise All Railways
This is yet another already existing proposal put forward in the Greens manifesto, but yet another policy which Bennett failed to mention when asked about the issue of funding. Before being privatised by the Coalition in their sickening make-a-quick-buck auction of tax payers property, East Coast railway was not only the most successful and well-managed railway in the UK, it was also the most profitable. In the financial year 2013-14 East Coast railway added an extra £6.2 million to the UK’s coffers.

End The Tax Free Status of Religions
Religious institutions in the UK are not classed as businesses, and they do not pay any tax thanks to their inclusion under the Charities Act of 2006. As if this wasn’t help enough, they are also entitled to claim back 25% in gift aid from donations. Though religion in the UK is nowhere near as profitable as religion across the pond in the US, there are still discounts and exemptions open to religious institutions allowing them to forego tax payments. In late 2013 the movement of Scientology, more cult than religion, was in fact deemed a religion by the Supreme Court. It’s London  headquarters near St Paul’s cathedral saves itself £1.3 million in tax payments each year.

Introduce A Wealth Tax
Another of the Green party’s proposals, which was again forgotten by Bennett during her torturous interview. From a July 2014 Green Party document it says: “The Green Party proposes a Wealth Tax on the top 1% – UK individuals with assets of more than £3 million.” This tax, set at a rate of 1% or 2% would raise a reported “£21 billion to £43 billion a year.” Though this may be controversial in the UK, it is practiced in France, Spain, Netherlands, Norway and Switzerland.

Recommended further reading:
http://www.theguardian.com/commentisfree/2015/feb/24/natalie-bennett-shrug-off-humiliation-vision

If anyone has any other suggestions, then please do add them below in the comments section. This list is by no means exhaustive, and I welcome input. 

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