The UK is currently enduring the general election campaigns of its political parties prior to the vote on May 7th. Needless to say this is provoking the usual raft of daily daft headlines where the balloted buffoons attempt to outdo each other in promising us endless rounds of goodies paid for with our own money. This is exacerbated by the fact that the total lack of fundamental ideological difference between the main contenders makes a hung parliament the most likely result. This essay comments on a number of them that have appeared over the past few weeks.

Healthcare

“We’ll find £8bn more for the NHS!” (Conservative)

£8bn makes for a pretty fantastic headline. Unfortunately the only thing that the NHS will be nursing with it is itself, as this crippled corner of the welfare state experiences spiralling costs which claim an increasing proportionate share of the UK’s GDP and whose waiting times for operations have hit a seven year high this month.

Taxes

“End the non-dom status!” (Labour)

This refers to the non-domiciled tax status where certain foreign UK residents can exclude their non-UK income from their tax liability. The allowance is seen to be a bone of contention among the less well-off British public who had the misfortune to be born in the UK and hence have to pay tax on all of their worldly income. Needless to say, creating “tax fairness” is about increasing the taxes of the rich instead of just cutting them for everyone else. Talking of tax loopholes…

“Labour will raise an extra £7.5bn a year through closing tax loopholes and imposing bigger fines on tax avoiders”

Politicians seem to be promising endlessly to “close tax loopholes” in order to either increase revenue or induce tax equality. By their own standards, we have to wonder what is taking them so long to do this. Aren’t we going to run out of loopholes at some point? Or maybe if you set up a compulsory monopoly of violence the wealthy will always have the greater wherewithal to infiltrate it and tune it to its benefits. Yet again there is also the blurring of the legal distinction between tax evasion, which is illegal, and tax avoidance which is legal. So a Labour government would believe that it is OK to fine you for behaving legally.

“Raise the inheritance threshold to £1m for family homes” (Conservative)

Undoubtedly the reduction of any tax should be applauded, particularly the especially egregious inheritance tax as it is a charge on accumulated capital. You can tax income all you want but so long as there is enough left over to replenish the capital stock then the standard of living will be maintained. When you start taxing that capital stock itself, however – as any kind of wealth tax does – you destroy the very machinery of production. This measure by the Conservatives would therefore appear to be welcome, although not quite as welcome as abolishing the entirety of wealth taxes altogether. Unfortunately, it is designed to be “revenue neutral” and will be “paid for” by reducing tax relief on the pension contributions of people earning more than £150K. Although this proposal is supposed to alleviate the fiscal drag of rising house prices, it is likely that inflation will push those who benefit from it into the £150K tax bracket anyway.

“The Liberal Democrats will eliminate the deficit by 2017/18 by raising taxes by an additional £12bn, cutting public spending by 12bn and cutting welfare by £3bn.”

Kudos to the Lib Dems for at least making the (probably empty) promise that spending cuts will exceed tax rises. Unfortunately the figures are altogether too miniscule. The problem is not just the deficit – the discrepancy between the government’s revenue and expenditure in any fiscal year. It is the enormous debt to which that deficit contributes. The UK government’s official debt is £1.56trn. The total saving of £27bn from this proposal amounts to a mere 1.7% of that debt. Even if we were to assume that this figure will amount to a budget surplus, it will still take another two generations to pay off the debt. However, that is not what the Lib Dems are proposing and it also ignores the unfunded liabilities that do not form a part of the official debt.

Housing

“George Osborne [Chancellor of the Exchequer] promises to get 2.4m first-time buyers onto housing ladder with property ‘revolution’ (Conservative)”

Will this so-called “revolution” involve cutting the incessant inflation of the money supply that blows up housing bubbles? Probably not. Labour’s turn…

“£5bn for funding 125K homes” (Labour)

It seems that both parties feel that a government solution is necessary for a government created problem. Far better to remove the source of the problem.

Transport

Freeze Rail Fares for Five Years” (Conservative)

This will be the same railway that is nominally privatised but whose track, signalling and infrastructure is owned by a statutory corporation and the train operating companies are geographic monopoly franchises that are parcelled out to private companies by the government. In economics it is of course a travesty that a good can be both overpriced and overcrowded, yet somehow government – including a £4bn subsidy from the taxpayer – manages to achieve this and so the age old remedy of price fixing is brought out of retirement. Making the railways a true free market enterprise by selling them off completely is not considered.

Jobs

“We’ll create a 1000 new jobs every day” (Conservative)

They’ve been in government for five years – why haven’t the been doing it already? That aside however, will these be genuine, productive, free enterprise jobs that genuinely meet the needs of consumers? Or will they be a part of the bloated public sector and paid for through loot mulcted from taxpayers?

“An end to zero-hours contracts” (Labour)

Apart from the fact that zero hours contracts (previously known as “casual labour”) are likely to be a beneficial arrangement for some employers and employees, perhaps their abundance is less to do with corporate greed and more to do with the fact that the government has made it so ridiculously expensive to hire low skilled workers for a committed number of hours per week?

UKIP has proposed a UK-controlled fishing zone to replace involvement in the EU Common Fisheries Policy to revive the British fishing industry”

What would benefit the British fishing industry is government leaving it alone and opening areas of the sea to private ownership so that fish stocks can be cultivated through a genuine aquaculture industry. Although UKIP’s replacement of the words “EU controlled” with “British controlled” may appeal to voters it doesn’t hide the fact that an industry will be still be subject to the stifling interference of government.

“£800m to protect 10,000 police jobs (Labour)”

Why? How do we know that these jobs are needed? Does Labour have any profit and loss statement to show that these jobs in the security industry benefit the consumer through their protection?

And Finally…

“Lib Dems promise £1bn to ‘build a better Wales’”

As we noted above, the Tories are dredging up £8bn for the NHS. The Liberal Democrats think that one eigth of that figure is enough for an entire country.

Give “respect” to teachers” (Labour)

This stunningly innovative piece of education policy alludes to the alleged breakdown in the relationship between education ministers and teachers. Far better would be for that relationship to be severed altogether rather that the government have any further wherewithal to indoctrinate the next generation of voters.

“UKIP hopes to woo women with plan to scrap the Tampon tax”

No doubt all of Britain’s female voters will be delighted to learn that UKIP believes that the contents of their underwear is the most pressing political issue burning away in women’s minds. It is no small wonder that, amongst other things, UKIP is seen to be sexist.

View the video version of this post.

Advertisements