The Chancellor’s Budget speech today gives me cause for concern. The first and foremost concern is the size of the Government’s borrowing deficit that will result from this budget, assumed by the Chancellor to be £175bn.
This is s huge figure by any standards, and the Chancellor’s estimation that the UK economy will quickly grow our of deflation and recession, by next year, is highly optimistic, and frankly quite unrealistic. It assumes we will rise above the worst situation this economy has experienced in 60 years, and that it will regain its unusual and record growth rate almost without delay. This is simply totally unrealistic, and I can see no good reasoning behind this assumption.
This therefore gives me great cause for concern, as Government borrowing is far more likely to be balanced once again well beyond the Chancellor’s date of 2017, based on his highly optimistic assumptions.
It is in my view, also a mistake to increase taxes. The fact the Chancellor has raised tax for earners of over £150k from 45% to 50% means there is a greater danger that this will work against generating more income for the Exchequer. These same high income earners are highly likely to re-assess their circumstances after this hike, and consider leaving the UK altogether.
A Mixed Low-Tech Bag
The new technology investment fund is welcome, but unfortunately does not go far enough, in fact it is well short of the real need the Green Party reckons by a factor of 10. If the Government is serious about stimulating the economy and providing real jobs for real needs, then it needs to commit the appropriate moneys to finance this. Throwing the money that is needed in the wrong direction - i.e. trying to save the unsaveable and actually purchasing the so called toxic assets is a bad move - as I’ve said already, these harmful ‘assets’ should have been cancelled, and debtors freed of their loans due to reckless investment practice by the banks. A fraction of this money could have been directed at new technologies development. The Money we needed here has simply been squandered. It is a missed opportunity.
Committing £435m towards energy efficiency measures is sadly not anywhere near enough. We could be making real savings here on costly energy usage, or rather wastage. But we have yet another half-hearted measure, a shortfall I’m afraid.
The £525m earmarked for off-shore wind projects should be effective - for a community of around 3m homes, but this is hardly the answer for addressing the greater part of the country’s needs.
The 405m earmarked for small-scale project development of new technologies in energy generation is probably one of the more likely effective solutions, but again, I see no clear Government initiatives that show any signs of joined-up government. I expect a government to take a lead in showing the way forward, so I am sceptical about our fortunes here, but very glad something is being done, however little. Human endeavour - especially in the UK - is constantly triumphant in the face of tall challenges, and this will be no exception.
The £750m emerging technologies investment fund is again a little less than could have been expected, but is still good news, and I can think of one such project a good deal of this money could be ploughed into - a UK equivalent of a biomimicry research centre. This is on my agenda, but it remains to be seen if the Government will see the light when confronted with this proposal.
Giving Businesses & Shoppers A Break
The 40% capital allowance is a good move, especially as it is retrospective. But businesses need far more help. One way I suggest is to de-couple business rates form rental values, as town centre businesses especially are invariably hit by greedy landlords, and often cannot survive in town and city centre locations, which is a pity, as the bespoke retailers for instance are what makes our towns and cities bespoke and interesting. As it is, they have a tendency to look the same. Now would be a great time to give such businesses a chance.
And the businesses I mention here would also benefit from shoppers who are not worried about leaving their cars on meters that suck out their life-blood. To encourage greater spending, you must incentivise shoppers to shop. To spend more time in town, in a relaxed way. So, government - more especially here local government, has to give some slack and allow shoppers to breather a little more easily. Cut the exorbitant cost of parking in-town, and you’d be doing everyone a favour - shoppers and businesses alike. We are developing an aggressive and stressful climate in our town centres, an uncivilised climate, where not only shoppers, but businesses and all who want or need to be in town, are having to constantly look over their shoulders or at their watch, and invariably do battle with the ubiquitous traffic wardens. These poor guys are fast becoming the most reviled people on our streets due to the punitive measures local government have implemented up and down the country. It is about time this was addressed, taking a fresh and fairer look at the situation. I suggest here what I consider to be a fairer system of charging for town centre parking, by limiting cash based meter charges to 10p per 10 minutes, and additionally, as a more convenient way to pay for parking - as who of us has always got the right change in the car? - using a scratchcard system, where you purchase the card you want form say the Post Office, scratch to card to redeem your parking date time required, either for a day, a week, month, quarter or year. Charges could be as follows:-
Suggested In-Town Car Parking Fees
Day Rate - £5
Weekly - £20
Monthly - £50
Quarterly - £100
Annually - £300
Carrots v Sticks
It makes sense to reduce the pressure all around, taking such measures as I have suggested here. Moreover, to address the pressing need to re-ignite confidence and stimulate the economy, surely it is obvious one must use a carrot, not a stick. This would be more civilised and better for everyone, including the Treasury.
I say empower those that can make things happen - us the tax-payers! Us the savers - given incentive to save, and us the spenders - given a civilised town and city centre to seduce us into parting with our hard earned money.
Lets drop the punitive measures, lets be fair, be sensible and start using carrots, not sticks to engender relaxed confidence. All else will only send those with money to spend to the hills - cash n’ all.
Stimulating economic activity creates wealth all around - for the so called consumer, for business and for the Treasury. It sounds obvious, but, in order to stimulate economic activity, nothing works better than incentives. These can come in the form of lower taxes, lower business rates, sounds silly but lower parking fees - people spend longer in town and therefore spend more, which benefits business, which provides more taxes and more constant revenue from business rates from businesses who are not forced to close down or move on due to punitive rates.
Co-ordination For The Nation
It is the small things that we need to look to, as much as the large-scale projects. Putting these in tandem, and having a more co-ordinated approach to tackling big and small problems, will for sure, address issues more effectively. Micro and Macro together. Joined-up government has been a much muttered myth until now. Could we possibly have it? Please? If we don’t get it right, the red ink that represents the huge moneys that are being thrown hither and thither, and not necessarily in the right order or quantities, or at the right things, will dry up, only to find a red letter day from the IMF, and it won’t be informing the Chancellor of a free ride courtesy of the tax payer.
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