Thursday 28 October 2021

Want to know what's wrong with the UK, just look at the pantomime that is the Budget

 Of all the traditions of UK politics, I believe that there is none more corrosive than the biannual budget announcements. The whole concept is ridiculous from start to finish. It is a pantomime that is simply not fit for purpose in a modern economy. I've long believed that things such as infrastructure spending should be planned over decades and ring fenced. If you look at the ongoing haggling over HS2, the Heathrow runway, Crossrail and just about every other major project in the UK, you will soon realise that we are a dysfunctional nation. Yesterday the chancellor announced £42 billion for 'transport projects'. I searched in vain to find out what these were. The UK is hosting the COP26 climate summate shortly, having just announced that we are incentivising short haul flights in the UK. 

Not only that but the chancellor has given the banks a huge tax break. I am at a loss to see how this will stimulate the UK economy. A thriving banking sector is good for London and the UK, but it has been on the receiving end of a decade of public support, yet we see higher charges, branch closures and the withdrawal of the abaility to speak to a human being in almost all circumstances. If Sunak had attached a few strings, such as protection for branches in places where they are needed, better regulation of charges, I may feel different but as someone comfortable in the company of bankers and possibly with an eye on his next (but one?) job, he has given them a huge bung for no discernable benefit for Joe public taxpayer.

Then there are the duties on alcohol. A 3p a pint cut on duty in two years time is bonkers. Either the industry is struggling now and needs assistance now, or it doesn't. I'm all for cheaper beer, but if you are going to give away money, it make sense to give it away when it's needed.

Sunak was trumpeting the success of his policies for dealing with Covid. The Furlough scheme was undoubtedly a life saver for many small companies, my own included. It would be churlish and ungracious to not say well done for that, but we are not out of the woods and I'd suggest that he'd do well to wait and see how things settle down as we open up before being too triumphal. The decline in unemployment is as much the result of Brexit and a mass departure of skilled European workers. It is great that British people are stepping in to fill gaps, but there is a labour crisis in UK industry. Sunak talks of being a "high wage, high skills economy" but even in such an economy, you need people to wash floors in hospitals and unblock drains.

I was reminded of a rather humourous scene a few years ago in a local Mill Hill pub. I happened to be at the bar when a well known local politician, who shall remain nameless waltzed in. As I was chatting, a rather the worse for wear elderly Irishman wandered up to us and told a rather filthy joke, then departed. The Politician looked disgusted and said "Who is that?". I said "He's the most important man in Mill Hill". He replied "What do you mean?" and looked puzzled. I said "He's the bloke who unblocks our sewers when they get blocked". A puzzled look came over his face. I said "Without him, the whole area would soon be knee deep in ****". Sadly such people are overlooked when the great and good talk about essential skills. There is no budget bung for them.

If ever I got into a position of power (which isn't going to happen), I'd abolish the whole sorry process of annual budget announcements. I'd like to see Parliamentary committee's oversee long term strategic plans. I'd curtail the ability of the Chancellor to rig the economy to serve the electoral cycle. I'd like to see monthly, non politica progress statements produced by the treasury. 

I'm all for different parties setting different priorities and policies, but these should be within the framework of manifesto commitments (and unmanageable global events). I'd like to see the Treasury deliver a plan that shows us where the UK wants to be in fifteen years time. I'd like to know that as someone who has paid tax  all of my life, I won't have my pension nicked at the whim of a transient politician (as happened to the WASPI's). 

I've felt for a very long time that the UK works in spite of politicians rather than because of their 'initiatives'. I work in an industry that is almost completely unregulated and by coincidence the UK leads the world in (the music industry). We are so niche we fit no easy category in what the government deems a 'sector'. When covid support was dished out, some local authorities (I'm pleased to say that Barnet was very good for once) supported music studios as leisure industries and some didn't, until pressure was brought to bear.  Some local authorities actually forced businesses to the wall, by not giving assistance that they were entitled to. These were businesses that had paid taxes for decades. having campaigned for the industry for decades, it brought home just how unimportant small business is to politicians. They have simply no idea what the sector contributes to the economy. The Federation of Small Business stated yesterdayBudget not enough to meet ambition for high-growth, high-productivity, high-wage, low-tax economy"

To me the biggest problem with these bi-annual budget announcements is that there is too much in them at once to have a proepr debate. Measures like cuts to beer duty catch the headlines, but they are not the things that will really make a difference to the long term future of the UK. Sector by sector reports throughout the year, with reports on progress would make more sense. So often the budget plans last as long as the newspapers that we read about them on. There are always commitments to efficiency, talk of making the UK a low tax economy, talk of encouraging entrepreneurs, yet nothing ever seems to happen.

If Rishi Sunak wanted to really modernise the UK economy, he'd do away with parading a red box and start a process of proper long term planning, with consultation and proper oversight. 

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