The Budget

The following article was originally published on http://topofthecops.com

This week’s budget debate shows the stark economic choice facing the country. Cutting your way out of a recession doesn’t work: cutting the public sector too far and too fast has hit the economy so hard the deficit will actually grow over the next few years, rather than reducing. It didn’t work in the 1930s or the 1980s. Keynes theorised and the New Deal in the United States demonstrated that if you put people to work – even if they are only digging holes and filling them in again – you will get the economy back on track.

Public services are so much more useful than that! Whether it is reassuring the public through visible policing, teaching, caring or looking after our local environment, public servants improve our quality of life. Investing in schools, hospitals, housing and transport infrastructure isn’t wasting money: it is an investment which will be good for the long term. And by making these decisions now, we could really get the economy going again.

So what will Police & Crime Commissioners inherit in November? Other agencies have been told their funding is transferring – but actually it is being cut. The CSR included totals for 2013-14 which have now disappeared. Will we be given the actual figures before the elections?

It is not that savings cannot be made from public services: they can. There is always more to be squeezed out by doing things better. But the benefits of outsourcing are overstated. What is needed is good leadership: managers who work with their teams to find a better way of doing things. But the savings are at the margins: if you cut one in ten of the people doing the job, the remaining people will get less done. The thin blue line is thinner now than it was a year ago.

So given a little wiggle room, what does George Osborne do? He cuts the top rate of tax. There’s no point in it because people like him find a way not to pay. So here’s an idea. Why not tax property properly? As the following graph shows, the wealthy pay a much smaller percentage of the cost of their dwelling than the poor:

Image

The red line is proportionate and a sharper line would be required to be redistributive.

 All properties valued over £320,000 in 1991 (worth about £650,000 in late 2010) pay the same rate – except in Wales where there is one further band. What’s more, second homes get a discount instead of being charged a higher rate. This tax would be difficult to avoid: the number of people willing to rebuild their mansions brick by brick in a foreign country must be fairly limited but if they did, it would help the economy…

What do you think?

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