Monday, 4 May 2009

Crisis Budget 22nd April 2009

The headline writers were on top form today, ‘Alastair in Wonderland’, and ‘At least it’s sunny’ all referring to the Chancellor’s budget speech yesterday.

It’s easy to criticise. I have been wondering what else he could have done. The problem is that there are conflicting demands on him. He wants people to spend, but he wants people to save, but he doesn’t want them to increase their personal debt and the interest rate returns are so low as to be silly.

I can’t see the real sense of the scrapped car deal. Most people with a car ten years old or more are not in a position to buy a new one, even with £2000 off the price.

The much discussed 50% tax rate for high earners (over £100,000 pa) affects only 1 % of the workforce. That sounds a bit like the thinking that brought down the VAT rate by 2.14pence in the pound last December. All that did was to ensure the Government took in less revenue and was no effective encouragement at all to go out and spend more on Christmas presents. The same applies here really. Apart from the rate not kicking in for some while it does very little except to hack off people who are in top jobs. Fine if you are in a low paid job, but not really effective.

Have you ever watched the TV news on a Budget night where the BBC analysed a typical family of four and after analysing the pennies on the pint and on the fags concluded they would be £1.75 a week worse off or some other minor sum. Have you ever thought it didn’t actually make much difference?

I wonder , leaving aside the political vote seeking that has obviously tied the chancellor’s hand behind his back, would it have been okay to say ‘Look people of Britain, we are in a crisis and although it isn’t entirely our fault,  it is us that has to deal with it. Many of you have benefitted from the lower borrowing rates on Mortgages and other lendings and we are going to take a little more in tax for a short period to lift the country and give the government the ammunition to deal with the current mess. For a short time only we are going to ask for an increase in contribution from the working tax payer of 4 pence in the pound.’ The same rule would apply as those above. Overall it would make a big difference. Individually we would hardly miss it.

Politically unacceptable the pundits would cry. I don’t care. It would get my vote.

Other thinking lately has seen a further public shove towards  electric cars. The cost of producing them and the infrastructure for running them  outweighs their benefit and will take years to swing the other way. We can’t use biofuels overmuch – we need the food crops instead. What about other forms of energy?

 People have developed and considered magnet motors for many years now. You know the force you get with two opposing magnets facing each other? Recent developments have increased the cope for building more powerful magnets and once they are made they  go on almost forever. Or surely someone is thinking about solar power to boost batteries and keep them running at a greater efficiency?

The country is in a mess. Go to your room and Tidy it Up!

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