UK Budget 2009: The Triumph of Silliness

Alistair Darling Rides AgainThe Slovene philosopher Slavoj Zizek once said you could learn a great deal about a country from its toilets. He cited three main examples: the lavatories of France, Germany, and Britain tell us, in his opinion, all we need to know about French politics, German philosophy and British economics. French toilets are basically a hole, the design’s intent is to get rid of waste as quickly as possible; French politics similarly is about disposal, as we can see in the number of changes in their government since the French Revolution. German toilets have a “pan” whereby the waste can be examined; the reflective nature of German philosophy, mostly concerning itself with the matter of existence is similarly referential. British economics emphasise efficiency, as do British toilets.

Yesterday’s budget led me to think about this, not only because we are far up “Excrement Creek” and the politicians are full of faeces, but because if one thinks about it, the budget is an attempt at French disposal using a German implement. It is a highly silly budget, based on highly silly assumptions; the Government hopes it will dispose of trouble, but in reality we’re going to end up being stuck with it for quite a long time.

A good a place to begin as any is with the Government’s “eye-catching initiative”, the increase in income tax rates to 50p in the pound for those earning more than £150,000 per annum. There are distinct problems with this policy: first, the government is trying to paint everyone in this bracket as rich. Yes, they are better off than most, however there are swings and roundabouts associated with this calculation: if one lives in London, for example, that money goes less far than it would, say, in Hull. That said, there also is the problem of misidentification: when the government says “rich” or “high earners”, the public generally believes they are talking about the likes of Sir Fred Goodwin, the former Royal Bank of Scotland chief who not only destroyed the company, but managed to collect a huge pension in the process. Everyone can agree that someone like him ought to pay more: however, this tax is unlikely to catch the likes of Sir Fred, as people like him are able to tap into complex tax avoidance schemes. Rather, in order to snag these individuals, the Government needed to strengthen enforcement: I did not see any measures which indicated this was going to be significantly tackled. At the same time, there are professionals, such as highly skilled doctors, who will be negatively affected by this increase in tax; according to the Guardian, British income tax rates are now only second to Italy among the G20 nations. I imagine that Australia and Canada are salivating at the prospect of luring skilled Britons to their shores.

Worse still, the indications have been that this rise in income tax will not raise a tremendous amount of extra revenue; again, the priority should have been to eliminate avoidance, thus increasing revenues without increasing the perception of the burden.

There are other items which are just as bad: for example, the rise in alcohol duty is a killer blow to pubs. Alcohol abuse is a problem in the United Kingdom, however there is a public health question associated with how much the problem should be public or private: if drinking happens in a pub, then it is more of a social activity, which can be controlled by the bouncer and the barman. However, by raising alcohol duty without putting in a place a minimum alcohol price which would apply to supermarkets, we are pushing the problem out of the public sphere into a form of substance abuse which largely takes place at home. There is nothing in this budget which indicates the Government has taken this thought on board. Rather, they appear more concerned about raising revenue, whatever the source, rather than actually assisting public health.

The same money-raising logic applies to fuel duty. One of the main criticisms that the Green Party has levelled at this government is the fact that they make it difficult to be green. Quite so, and there should be no hesitation in saying that green taxes without green alternatives are not green at all. Rather, they are a shakedown and a scam. The increases in fuel duty, which will continue well into the future, are not going to be ameliorated by increases in the subsidy for rail transport, for example. Drivers will still be in their cars out of necessity, thus emitting carbon, but they are going to have to pay more for the privilege of getting to work.

A government spokesman might retort that the new scheme for drivers to replace their old cars with new, more efficient ones will have a beneficial effect on the environment. I wonder about this. Is it a given that a newer car is necessarily more efficient than one made ten years ago? Vehicle licensing statistics published by the Department of Transport in 2007 indicate:

The average engine capacity of all licensed cars in 2007 was 1,751 cc, an increase of 6 per cent over the average 10 years ago. The engine size of new car registrations is also increasing, up from 1,750 cc in 2003 to 1,789 cc in 2007. For motorcycles, the average engine capacity amongst the licensed stock increased by 17 per cent between 1998 and 2007.

While no doubt technology has moved on in the quoted period, there was obviously an emphasis on developing vehicles which had greater power; this is not necessarily conducive to greater efficiency. Rather, the concentration on more efficient cars has been a relatively recent development. Furthermore, the environmental cost of producing the new cars, including gathering the raw materials, should be taken into account. Truth be told, this is a sop to the car makers, not really for the environment nor even for the drivers’ benefit.

The other headline green measures, such as £1 billion for supporting low-carbon industries and green jobs are a joke: this indicates that the environment is not at the centre of an economic strategy, rather, it is on the periphery as window dressing.

All this said, perhaps the silliest element of the budget is its predictions for the future. The Chancellor believes that the economy will grow by 1.25% in 2010 and in excess of 3% from 2011 for three years. This contradicts the IMF which believes the British economy will again shrink next year, albeit by a smaller amount than in 2009.

I have to wonder why the Chancellor believes there is the remotest chance that his sunny predictions will come true. Growth has to come from somewhere, and up until recently the financial sector had been one of the key pillars of the economy. While this is not entirely gone, the nationalisation of key banks, the lack of trust in the financial sector, and the rolling back of the City of London’s present culture means that it will not be able to assist in boosting the economy, on the contrary, it will be a drag. This is actually a good thing: as we’ve discovered, the financial industry is actually a more dishonest business than gambling. At least with a casino one can be certain that the house always wins, and this fact is not hidden. The financial industry peddles the illusion that gambling can go on forever, and apart from a fine print disclaimer that shares may go down as well as up, they seem to suggest that everyone can emerge with a jackpot.

Britain does have other things upon which it can rely: pharmaceuticals and aerospace have a substantial role to play. However, it is going to take some time for the economy to rebalance itself: major economic shifts of this type generally take longer than 12-24 months to play out. The Chancellor is either not being honest with himself or the public, or both, if he thinks this change can somehow be condensed. Worse still, this is being accompanied by a clampdown in the number of university places for young students: ergo, education is being restricted just as its lubricating qualities for this process to occur are needed most.

If the budget does not achieve fiscal, economic nor environmental goals, the question remains: what is its real purpose? Sadly, the only answer that makes sense is a political one: it is an attempt to divide the rich and poor, and to present some semblance of economic sanity in order to give the impression of control. Even the “efficiency savings” it purports to make are window dressing; they have much more to do with staff rather than processes: to examine that would be to undermine the “public private partnership” model with its attendant consultants and managerial costs upon which Labour has staked its credibility – though that is precisely where much of the waste actually lies. Overall, it’s a badly packaged pile of excrement poured into the mould of a layer cake with birthday candles stuck into it which when lit are revealed to be sticks of dynamite.

Sadly, the public won’t get a say on this particular budget until over a year from now. However, there comes a point where spin gets old, and an even more tragi-comic point where the spinner doesn’t realise that the spin is dated and no longer believed. Above all else, the Budget indicates that Labour has reached this stage. Ironically, given such a “Germanic” budget in the Zizekian sense, the government can now only expect to be flushed away à la française.

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