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Deficit Deniers in Bankrupt Britain – A 13 point plan for change

Tom Winnifrith Thursday 20 December 2012

 

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This article first appeared in my Tomogrraph Newsletter a couple of weeks ago but prompted my an angry response or two to my article of yesterday (Being on Welfare is NOT a Job) I am goaded into republishing the piece to a wider audience. One chap thinks I am “ bitter and twisted” and a “sad man” for arguing that taxpayers have no obligation to support a life of Sky, fags and booze on welfare. Whatever…folks need to face up to the problem.

This piece deals with those deficit deniers who cannot accept that Britain is heading for bankruptcy and offers up a 13 point plan to deal with the issue – needless to say I do not expect the cowardly Conservatives to adopt even one of my suggestions.

The Autumn statement came and went. George Osborne laughed and smiled. Ed Balls stammered. The left bleated on about wicked Tories and even more wicked cuts. The Tories claimed to be satisfied with the job being in hand. But we are as a nation kidding ourselves. We are all deficit deniers.

Two and a half years into this Parliament, Osborne has missed his forecasts again. Government spending has, in absolute terms risen year on year since the election. We will next year run a budget deficit of £100 billion. I believe the forecasts made by Osborne about growth and tax receipts as much as I believe in the tooth fairy. His track record on this matter is dire. No longer is he talking about a balanced budget by 2015 but now it is 2017 or 2018. And that is if his growth and tax forecasts are right which they never have been to date.

The reality is that Osborne is tinkering with spending at the edges. Tweaking pension contribution limits, getting Starbucks to pay £20 million as a tax “donation” will make sod all difference to tax receipts. Penning welfare increases to 1% or promising to cut Whitehall bureaucracy ( that old Chestnut) will make no real impact.

If we continue as we are then by 2020 the UK will have a debt/GDP ratio where Greece was two or three years ago. We will be bust. We will look back on the days when we worried we “might lose our AAA rating” as a golden halcyon era of success and stability.

In the Telegraph Jeremy Warner had it right when he argued that to solve this mess you need to axe whole departments. Ron Paul argued a similar line in the US saying that he would axe five departments in order to balance the budget. But for now those of us who argue that we have to make such changes are viewed as deranged loons. The reality is there is no choice.

Some in UKIP argue that leaving the Evil Empire would solve all our problems. They too are dreaming. One sort of UKIP supporter just assumes that the deficit will go away and so the £15 billion or whatever we pay net of rebate can be used on Schools, Hospitals, etc. That is fantasy. The other sort of UKIP dreamer argues that without EU red tape the UK economy would flourish and grow so tax receipts go up. Well that might happen. But you cannot spend growth until it happens. And even were this to be the case it would take years to filter through.

I am afraid that if cuts are to be made they must be savage. What would I cut? Well to save £100 million without trainwrecking the economy I would start with

1. Scrap all foreign aid. We cannot afford it. £11 billion
2. Yes I would leave the EU call it £10 billion.
3. Privatise/close the BBC & fire all staff involved in collecting license fees £4 billion
4. Merge local councils. There are c326 in England. Bring them down to 50 ( the counties plus the big Cities). And severely restrict what local councils do ( no 72 climate change officer as there are at Islington) down to core services £6 billion
5. Raise the retirement age to 80 with immediate effect. We spend c£70 billion a year on state pensions. The savings would tot up from ( perhaps ) £3 billion in year one to £40 billion by year 15. So by 2020 the saving would be, perhaps, £20 billion.
6. Abolish Child benefit, cap housing benefits, abolish unemployment benefit for those losing their jobs as of next year who have not paid five years NI £10 billion.
7. We all know that student loans will not be repaid. End the pretence. Shut down one third of Universities. £4 billion.
8. Introduce a minimum charge of £5 for use of any NHS service and refuse to offer free non medical procedures (sec change ops etc), sack ¼ of all NHS back office staff – £15 billion.
9. Abolish the Department of Energy and Climate Change £1.5 billion
10. Reduce the number of MPs to 250 and reduce Whitehall staffing accordingly – end all state subsidies for political parties – £2 billion.
11. Simplify the tax system by increasing the threshhold to £20,000 and by merging NI with income tax and halving employers NI at once and then phasing it out 1.2% at a time until 2010. This would actually cost money ( notwithstanding the vast savings from firing HMRC staff) of around £30 billion. But it would create incentives for employers to hire and give spending power to exactly the sort of folk who will spend it on domestic goods and so most of that would come back via tax receipts. It gives a real incentive for folks to get off welfare and accept “lower paid jobs” currently filled by young people from Eastern Europe.
12. I cannot quite see how any UK military intervention overseas in recent years has made the UK or the world a better or safer place. Shut down all UK military bases outside the UK and the Falklands. Bring the troops home. Saving £5 billion.
13. Legalise drugs. That accounts for 80% of crime. Police numbers can be cut accordingly ( with the back office and diversity trainers) taking the big hit. Saving £4 billion. Tax receipts from treating drugs like cigarettes would double that.

So far so good. £68 billion net saved (or generated as extra tax) already and an additional £30 billion ploughed back into the productive economy to generate more (real) jobs and tax receipts. That should push Britain to a stage where the deficit can be closed pretty rapidly indeed.

Those losing their jobs at the BBC, in Whitehall and the New Universities always argue that they merit salaries far greater than the private sector because they have unique skills are so much in demand. Go prove it in the private sector or pick up a, much reduced, welfare cheque. The scrapping of employers NI will leave the private sector hiring – let’s see how much demand there is for a former diversity facilitator from De Montfort University out in the real world.

You see it could all be done. But can you see anyone in power implementing any of the changes suggested? Nope. Even little Osborne’s pathetic tinkerings are viewed as savage and inhumane. And as such the nation denies the scale of the deficit and Britain hurtles ever closer to bankruptcy.

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About Tom Winnifrith
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Tom Winnifrith is the editor of TomWinnifrith.com. When he is not harvesting olives in Greece, he is (planning to) raise goats in Wales.
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