Gordon's Weakness

There has been much said about Gordon Brown’s accession to Prime Minister.Most of it seems to revolve around how he has surprised the Tories, by not causing a massive poll slump after taking the keys to Number 10. Quite why anyone would have thought that Brown’s accession would have caused such a down-surge in popularity I do not know.

Image, one of the areas where people said Brown would err, has not got the same hold over the public that it did in 1997. The ‘Cool Britannia’ hysteria of that era has dissipated, to be replaced by a more image-weary media and public. And, in any case, all media appearances can be heavily managed and choreographed, interviewers can be handpicked and speeches carefully constructed; leaving little chance of the voters seeing the real personality of Brown shining through.

The other hope, I suppose, was that Brown would quickly be seen as a 1970s dinosaur, whose socialism would send the voters of the ‘middle’ ground back into the arms of the Conservatives. It should have been fairly obvious by now, however, that Brown does understand that you need wealth creation and lower-than-1970s direct taxation to make an economy tick.

In saying all that Brown does have some severe weaknesses. The economy has performed well in a number of ways, but it is certainly not the ‘miracle’ economy that Brown and his media Toadies like to paint out. Most damning of all is the question of who has benefited from Brown’s policies, who has lost out and what effects will they have on our country in the future.

The City has been full of praise for Brown, and why shouldn’t they be? He has kept direct taxation reasonably low, and resisted the temptation to clamp down on record bonuses. Furthermore, there is non-domicile tax status in which foreigners (many of whom hold British passports) pay about 25% tax rather than the 40% top rate. That is great for them, and many would argue that this has lead to top foreign talent descending on the City making it the powerhouse (or, indeed, the only working engine at all) of the British economy.

This windfall has allowed Brown to throw the money at the people he regards as either too important too annoy votes-wise, or as ‘worthy’ of government help. So we now have a protected public sector retirement age of 60; whilst those of my generation have been told that they must work till 68 before retiring. Then there are those who are technically called ‘economically inactive’, including all those who live off welfare, the black economy and crime. Many of these people are classed as ‘poor’ by the government and the likes of Polly Toynbee, but are, if they have plenty of children, more than likely far more cash-rich than those who work on low to middle incomes.

Brown’s recent machinations in which the income tax starting rate of 10% has been scrapped, is yet another kick in the teeth for these people. Indeed, the marginal tax rate for the poorest members of society who try to better themselves through work, is now 90%. True, many of these people have ‘benefited’ from House Price inflation over the last ten years, but nowhere near as much as the upper-echelons of society.

The effects of this are obvious: by subsidising the unproductive you breed more and more of these types of people, often alienated from general society and shorn of the civilizing nature which the act of working brings to a person. More than likely, you’ll also force those who are on the bread line to drop out of work and maybe even split-up relationships, to benefit from the Prime Minister’s beloved tax credits. This policy is, therefore, undermining the moral fabric of the country.

It is true that these policies will have pernicious economic effects too, but due to the strength of the City and the global economy, these problems will only manifest themselves of the long term. So what needs to be attacked now is the immoral aspect of Gordon Brown’s economic policies, not his financial policies. The degenerative aspects of this should be obvious to any conservative; why then does it seem that only a Member of Parliament for Labour, understands that?

Some Late Thoughts on Budget

The annual Budget was delivered on Wednesday.

Reading the Newspapers after the event, I'm firmly of the opnion that the Conservatives and their supporters, are going down the wrong path in attempting to paint Gordon as an unreformed old-Labour socialist. If they are going down that path they will have to explain to the public how a supposed socialist reduced income tax twice, and has now reduced corporation tax.

Now, don’t get me wrong, the budget is all smoke and mirrors. The tax reductions were measly, and will be more than cancelled out by the other increases, especially the National Insurance increment. But this was classic New Labour: panem et circem, headline-grabbing, single-mum sponsoring and, most of all, a lot of hot air which will make little difference to the overall fiscal picture. The problem is, they have been doing this, succesfully, for ten years. The media, especially the Sun, are still lapping it up, as their front page focused extensively on the 'cuts', whilst ignoring the rises.

If the Conservatives want to beat Gordon Brown's New Labour they need to paint Brown as a hammerer of the non-pensioner, non single-mother poor. Surely, by painting him as an old style socialist, the Conservatives give him the chance to play the ‘man-of-the-people’ card, when, in fact, that's something he is definitely not.

As for the rest of the budget, well, the logic of it confused me somewhat. For instance, why was corporation tax reduced, whilst small businesses have seen a tax rise to 22%? Surely, the ‘enterprise culture’ Brown desires relies on the very same small businesses prospering. And, we’re in a situation where many large corporations have recorded record profits – which makes the need to help them hardly pressing.

Green and cigarette taxes are politically a winner. But I’d imagine that a lot of the Mums who have gained with the child-benefit increase, will be the big losers if they’ve recently purchased a gas-guzzling vehicle. If that isn’t the definition of giving with one hand and taking with the other, then I don’t know what is!

Then there’s the crux of the matter: how does this budget affect me? Well, I am, as a single childless-man earning less than £19,000 a year, in effect worse off. The Lib Dems said that people like myself will be ‘subsidising the rich’, more than likely, however, it will be child-benefit and tax credit receiving single-mothers, who will be the ones who gain from my pain. How I can - despite having that thought in my mind and after working a 45-hour week - contain myself from foaming at the mouth with anger, I’ll never know.

Finally, we have a 2p petrol increase, although it will be frozen for six months. So, to say that he has tried to keep ‘inflation and interest rates under control’ seems ludicrous. The price of oil is volatile, and if it increased to the mid-60s or even early-70s in the summer, coupled with this Increase would set the inflationary cat, already on the verge of escaping, free. If that happens then it wouldn’t just be the likes of me who are worse-off, because everyone feels the pain of stagflation.

Propping-up Fundamentals

What was it Tony Blair said about marriage and single parentage? Do I look bovvered? No, that's not it, although it does show that Tony missed his true vocation in life. It was, in fact, said to be a 'good thing', but we shouldn't see it as a 'marriage versus lone parentage', contest.

Well, Tony, your Chancellor does see it as a contest, and he comes down hard on the side of single-parents:

Parents who earn less than £50,000 a year would be better off splitting up, it was claimed.

Benefits and taxes are weighed so heavily in favour of lone-parent families that couples need to bring in twice the national average income before staying together has a financial advantage, a report said.

Research by Patricia Morgan for the Institute of Economic Affairs think-tank, has provided more evidence that large numbers are either living apart or hiding the fact they are a couple just so they can hold on to tax credits and benefits.

Brown's motivation is an interesting question. I'd suggest that the housing market may be one of his main concerns, and with the twin policies of mass-immigration and encouragement of living alone, the current government has created a demand for 250,000 new houses per year. Like I've said before, the fundamentals are probably the most important part of the housing market's increase, although I still believe that speculation is also a main cause for the boom, so to shore them up probably seems like a good idea. And, the recent havoc created by the American market's decline, probably strengthened this belief.

The social consequences, however, will far outweigh any temporary benefits derived from this easy-money non wealth-creating situation. So, we now know where to look for the where and when of our society's further descent into the abyss.

A Christmas Carol........

There is no more perfect day for bad economic data to come out, than this. It gives us the opportunity to paint Gordon Brown as a latter-day Ebenezer Scrooge. No bad thing in my mind!

The BBC may call the economy 'impressive', due to hardly sparkling GDP growth, but who has benefited from this impressive economy? Young people who have entered into the much vaunted 'New Deal', clearly haven't. Perhaps that's why Tony fails to mention it now, when talking about New Labour's 'achievments'. And then there is your average worker, facing inflation creeping ever higher. Add in Gordon's obsession with taxing things like petrol, and council tax rises, and you find the poor now pay a higher share of taxes.

The link to today's news? I think that there is a direct link between this impoverishing tax burden and crime. And that this has been starkly illustrated in a leaked report:

MINISTERS have been warned that crime is to rise for the first time in 12 years, according to a leaked Downing Street report.

A newspaper reported last night that the document, drawn up by the No 10 strategy unit, warned that a slowdown in economic growth was threatening to reverse recent falls in crime levels. Also, the report was said to predict that the prison population would rise by 25% over the next five years, from 80,000 to more than 100,000 - outstripping the planned rate of growth in prison places.

It suggested that the government consider other remedies, such as rationing the amount of alcohol people can buy, prescribing heroin instead of methadone to addicts, and "chemical castration" for sex offenders.

The report said that 80% of the recent decrease in crime was due to economic factors, but that improvement was now in jeopardy.

"Unless action is taken, economic and social pressures are expected to put recent falls in crime under threat," it said.

Now, I am not a marxist (obviously!) , so I do not believe in a solely 'homo-economicus' explanation for crime. A large percentage of the decrease in crime figures has been automotive and, in my opinion, more than likely due to increasingly sophisticated alarms. That said, economic reasons are a factor that will motivate many opportunist crimes. A snatched handbag, a mobile phone swiped (happened to me) and an unlocked car, all provide an opportunity to the desperate and capricious. The capriciousness and feeble mindedness of petty criminals will remain locked in their personality; it's more than likely they would commit crimes whatever the circumstances. But when desperation, caused by the economic policies pursued by the government, is factored in, the mix becomes particualry toxic. So, to see an increase in this sort of crime would be quite simply the most damming indictment of Gordon Brown's Chancellorship, yet.

Finally, I would like to wish everybody a merry Christmas, yes, even dear old Gordon, and a happy new year. I would also like to thank those bloggers who who have been kind enough to link to me, God bless you and your families.