Growth or Bust

Growth or Bust

On the 20^th of March George Osborn will deliver his annual budget, in which he intends to stick to plan A, but has forgot what plan A is.  The government’s original plan was for the private sector to lead the recovery and subsequently pay of public sector bills.  This is a good plan one I agree with and has my full backing but the government has pursued policies which have restricted private sector growth and subsequently have led to greater borrowing and prevented a reduction in the deficit.  For the Conservatives to stand a real chance at the next election the chancellor needs to produce a Tory plan for growth or be prepared to return to opposition.  March 20^th is a fantastic opportunity to unveil such a budget.

For a start they need to stop attacking the banks by forcing them to hold more cash and capital they are restricting lending to small and medium sized businesses,  this means businesses can’t expand and subsequently supply extra jobs and increase demand (they must also fight the proposed EU cap on bankers bonuses which will only lead to an exodus of talent).  This policy is anti-enterprise, that makes it anti Tory, and the last time I checked the Tories were supposed to be in government.  We also need to cut the high taxes on fuel this will not only be great for haulage firms but will subsequently lower costs for small and medium businesses it will also lower the cost of living for your average family, as the cost of running a car is unacceptable.  A cut in VAT reducing it back down to 17.5% or greater, combining this with a cut to fuel tax and your average families spending power will increase. We also need to lower the top rate of tax from 45% to 40% to encourage investment and a bottom rate tax of 10p would also be desirable.  The growth which will come from such a growth plan will allow the government to start reducing the deficit.  Also the growth will allow for a rise in interest rates to tackle inflation and again lower the cost of living however the timing of a rise in interest rates is important as it could have a drastic effect on people’s mortgages.  As the economy grows due to a Tory growth plan similar to this, the government will still need to implement some more cuts to spending this means international aid and the NHS cannot be spared.  It is the Chancellor’s choice growth or bust. 

Credit rating downgrade leaves Osborn feeling moody

Credit rating downgrade leaves Osborn feeling moody

Moody’s one of the world’s largest credit rating agencies has downgraded Britain from a AAA rating to a Aa1 rating leaving Britain in the same situation as France and the USA where after they were downgraded in 2012 and 2011 respectively.  As seen in the USA and France the downgrade in the UK’s credit rating is unlikely to have much impact on the economy but it is still a huge blow for Chancellor George Osborn who has in the past pledged to keep the UK’s triple A rating and has used it a benchmark for the government’s economic competency.  Although more recently he has changed that line, saying interest rates on government bonds are more important when assessing the government’s economic policy.

The reason given by Moody’s for the downgrade was, “continuing weakness in the UK's medium-term growth outlook.”  So this can be claimed as a victory for Labour as they have constantly said that the government needs to concentrate on growth however further reading reveals this is far from a Labour victory.  As Moody’s predicts that on its current course, the UK will eventually regain its AAA status, and any relaxation in the deficit-reduction could lead to another downgrade.  So basically if Labours economic plan was followed our credit rating would be even lower, but this still does not hide the fact that even if this is not a win for Labour it is still a difficult loss for the Chancellor.  The news of the downgrade only added to the Chancellor’s woes as the sale of the 4g network came in £1 billion less than predicted however despite the mounting pressure he intends to stick with plan A which after reading what Moody’s have said is probably for the best. 

Labour Try To Show Economic Competence

Labour Try To Show Economic Competence

Today in Bedford Ed Miliband announced how he intended to raise living standards for the working poor, what was notable about this speech however was that is showed some economic competence it could even be described as the start of a credible economic plan.  The plan is to reintroduce a starter rate tax of 10p for those who earn between £10,000 and £12,500 this tax was abolished under the last Labour government.  This new 10p tax would affect around 25 million people who currently pay the 20p basic rate of tax and according to the daily politics, it would give people an extra £2 per week so around an extra £104 a year.  I don’t believe anyone would turn their nose up at an extra £104 a year and it may help to increase demand in the economy, but what shocked me was Labour had a credible plan to fund the tax which was not borrow more money.  Labour intends to implement the Lib Dem policy of a mansion tax for all houses over £2 million, and Ed Balls said the amount of people who would receive the new tax would be based on how much they would earn from the mansion tax.

So whether you agree with a mansion tax or like me disagree with it you will still say this policy sounds credible.  It will increase demand in the economy (probably not by that much but it would only be part of a greater economic plan) it shows Labour is on the side of the working poor by giving them a tax cut and most importantly they have explained how they will fund it.  This is all very good so far big thumbs up, however when Ed Balls was questioned how they would implement the mansion tax he had no idea of how it would be implemented.  Also he refused to say if the policy would be in the manifesto in 2015 so once you scratch the surface of the policy it is same old incompetent Labour.  To conclude I like the idea of returning to the 10p tax and the Conservative Voice group has been campaigning for such a policy, however I would rather see this funded through benefit reforms rather than a mansion tax.  However if even though I disagree with a mansion tax and think it would be a highly damaging tax hence counterproductive tax.  If Labour could come up with a plan to implement such a tax to fund the tax cut, this would be a step in the right direction for Labour in terms of economic competence although they still would have a long way to go, but at least they have found another source of income rather than borrowing.      

True tolerance embraces all

True tolerance embraces all

This week three things have coincided which have made me write about the subject of tolerance, the first being gay marriage, the second being a repeat of an episode of the daily show and the third being a Simon Jenkins article in the guardian.  These three apparently unrelated things are tied together by a central issue of tolerance.  Gay marriage is clearly about tolerance and as the bill was passed last night it was another step forward for homosexual equality and it also showed how tolerant the UK is of all types of different people.  The episode of the daily show was set at the Democrat party conference and it showed members describing how open, welcoming and inclusive the Democrats are. However at the same times delegates were making fun of how stupid and racist Republicans were which showed arrogance and an inability to listen from Democrats.  Finally the guardian article was mainly about gay marriage but it also mentioned how liberals are not truly tolerant until they embrace those who disagree with them.

I have been keeping an eye on the gay marriage debate as it has developed and I have noticed one thing about many of the bill’s supporters.  They have a tendency to be extremely derogatory to those who disagree with them, opponents of the bill have been termed bigots, backward and religious nut jobs. This is simply not the words of a tolerant person in fact it is completely intolerant of those who oppose gay marriage and it is rather arrogant to portray opponents of gay marriage in such a light.  Many of those who I have seen speaking in opposition to gay marriage have had perfectly valid points such as marriage is a religious ceremony between a man and a woman, and that gays should be allowed to have an equal institution which is not called marriage. Many opponents of the bill had nothing against gays but just had a core belief that marriage is between a man and a woman, this does not make them a bigot or a bad person.  In my own view I think that legalising gay marriage is a real triumph for equality but I totally understand the opposition and have great respect for some of the arguments against gay marriage.

Intolerance from liberals is not new thing it is actually rather common, if you look at most of the recent parliamentary debates liberals are quite happy to call anyone who does not agree with them out of touch or just plain nasty. It is interesting that those parties and people who describe themselves as liberal are happy to launch such personal attacks on people when they are supposed to be tolerant. The gay marriage debate has really showed the lack of real liberals in the UK, it is fine to support minorities but it is unacceptable to think that all those who don’t agree with you are bigots or small minded.  Before I finish I am going to illustrate my point using Vice President Joe Biden who is a true liberal and shows tolerance of all views which is why he is such a good Vice President. Anyway in the US Senate there is a belief that opposition politicians may be wrong but they are rarely bad, this was show when Biden was in his early Senate days he believed Republican Jesse Helms to be heartless for not supporting disabled rights.  Now unknown to Senator Biden Jesse Helms had adopted a disabled orphan, so was no more against the disabled than Senator Biden himself.  An older Democrat explained this to Biden as you can question people’s judgement but you should never question their motives.  So taking this in context of gay marriage yes in mine and many other people’s views the opposition to gay marriage may be wrong and we may not agree with their arguments.  However many of these people are vicars, grandparents and upstanding members of the community who are motivated to oppose gay marriage through a belief that it is a union between a man and a woman.  This is similar to the situation with Senator Biden, yes it is fine to criticise the judgement of the opponents of gay marriage but it is not ok to label them bigots. After all your either tolerant of all including your opposition or you are intolerant.