Thursday, 24 January 2013

It's the economy stupid

Back to reality with a bump, after the euphoria of the ‘EU Speech’ Dave has a nasty reminder of the real world politics that he has to face down.  The Economist (god bless them in their St James’s ivory tower) spend good money on a survey of what ordinary voters think is important and here is the latest chart.

No surprise results.  The chart shows that 71% of us think the economy or unemployment (the economy for non-economists) is the most important issue facing the UK today. There are then a bunch of the usual suspects – health, immigration etc and …er … Europe (which didn’t make the top 10).

So forget the pygmies in UKIP and the pathetic meanderings of RedEd, there is work to be done on the economy.  The dismal performance of the coalition to reduce the deficit and to unlock private capital that is sitting around in bank accounts earning negative (real) interest needs to come back to the top of the agenda NOW.  So what could be done?

1.   First up Dave needs to have a clear out at the Treasury – Little George has proved that the step up from a small time soft furnishing business to running the National economy has been a step too far.  Dave should get his best brains on the subject now – my guess is that Gove could do it but my preference would be for Ken Clarke, he did it 20 years ago so let’s unleash him on the Treasury mandarins who have been so poor at raising tax receipts and bring down the borrowing requirement.  Bring on the Hush Puppy shoes!

2.   Next we should take away the self-inflicted restrictions of protecting the Health service and Pensions budgets which are obviously un-affordable.

a.    My bet is that the NHS is still ripe for massive improvements both in clinical care and efficiency – we should nationalise this tottering smoke stack this summer.  Some sensible insurance scheme to cover those most vulnerable could be  rushed through – but my painstaking estimates tell me that privatising 20% health service would solve the 2013/14 deficit in a single transaction

b.    The pensionable age should be raised immediately to 68 for both sexes and some tax breaks for the over 60ies could help smooth the pain

3.    We should privatise 50% of Universities to create a more dynamic market for further education and government support for all universities should be based on the number of graduates going into full time employment

4.    Welfare payments could be reduced (not raised by 1%) to be in line with the real fall in incomes that the private sector have had to bear

5.    A flat rate of corporation tax should be imposed on foreign business, which would be calculated as a % of turnover, directly calculated from the VAT statements and paid quarterly.  This will have a number of benefits:

a.     It would force more business registered in the UK to pay tax

b.     It would drive away low margin / capital extensive businesses that we should be able to start up with domestic capital

c.     It would reduce the cost of collecting these taxes

d.     It would attract high margin / high value add business to the UK

e.     It would stop foreign companies setting up here that choose to operate at a loss to gain market share

6.   We should cut National Insurance for the under 25 year old's to 50% of the full rate to help with youth unemployment 

7.   We should sell off the remnants of the empire – except the Falklands just to keep the Argies on their toes!

8.     There needs to be some investments incentives to get business out of their risk adverse habituĂ©, maybe knighthoods for agreeable Chairmen might be considered.

Anyway I hope that’s helpful – it made me feel better anyway!!

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