You can’t have tax cuts with a deficit this big… can you?

What do you think? Here are LibertarianLou’s suggestions for recession-friendly, even deficit-friendly, tax cuts:

1. Cut VAT. Cut it back to what it was, then cut it some more. Yes, we need to pay down the deficit. But a tax on spending is not going to help any better than Labour’s ‘tax on jobs’ would help.

2. Keep cutting corporation tax – but only as a job creation incentive. We’re told this is the reason businesses get special treatment – let’s make sure they earn that treatment. Offset the employment costs of hiring new staff, on a sliding scale according to profit margins, with smaller tax cuts for companies who avoid making planned redundancies (assuming there is some way to prove they were, of course, going to make said redundancies). Any business of any size, not just corporations, could apply for these tax incentives. Creating a wealth of new taxpayers and consumers would pay down the deficit much better than the alternative policy of cutting Job Seeker‘s Allowance. Just cutting JSA will do nothing to get most unemployed people past the myriad of complicated barriers they face and into work. Neither, quite frankly, will it make much difference at all to the handful of people who actually are fiddling the system.

3. Iain Duncan-Smith wants people to look harder for jobs out of their home town. Meanwhile, housing benefit is being cut so that the unemployed, and people in low wage jobs, can no longer afford to live in areas where all the jobs actually are. Why not offer any moving claimants, as an alternative to expensive subsidised housing, subsidised travel to work? It would still cost less than subsiding houses in expensive areas. But don’t just hand out taxpayers money – invite employers to cover the cost and give them a tax cut for doing so. What difference does that make? Well, apart from the difference between people spending their own money, and the government spending yours, it would save the government paying people to administer it all, and stop it being regulated by the state.

4. Give small ‘risk incentive’ tax breaks to companies who hire anyone who has been out of work for over two years for the first six months of their new employment. The unemployed find it hardest of all to find work – why are they never mentioned in the discussion about positive discrimination?

4. Scrap council tax – or if that’s not possible, at the very least, don’t un-cap it! Then, while you’re at it, ring-fence – even increase – local government spending on all areas of healthcare, housing, social care, policing, and education (and that’s most of it, or so I’m told). Halve the remaining money given to local government, making the other half only available on application, when needed for specific projects which have local community support.

5. Cut NHS costs by offering a tax break for anyone who wants to use private healthcare. For lower rate taxpayers, the tax break would cover the cost of the private care. For middle rate taxpayers, the tax break would cover part of the care.

6. Means-test free entry to museums and cut all government spending on the arts by half – but give generous tax breaks to artists, actors, celebrities, and anybody else who wants to fund arts projects or exhibitions themselves. Tell Stephen Spielberg he’s entitled to give us the cash for our Film Council if it’s so important to him. I’m sure he could afford to…

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2 MINUTE RANT: Nice review. Not very comprehensive.

The coalition has some good ideas – most of which totally contradict each other.

People are being told to move to find jobs, at the same as housing benefit is being capped so the unemployed can only live in the poorest, most economically deceased areas. They are being told to travel further to work, while train fares are set to go up 30% and the bus network is being slimmed down. People are being told the government wants to make it pay to work, while cutting working tax credits. The country is being told to tighten their belts for the sake of the next generation, yet tuition fees are going to go up and Vince Cable has specifically said that students who want to pay off their fees quickly will actually be given financial disincentives to do so. Corporation tax is being cut to reward and help job creation – and rightly so – but it is given to all corporations, even the ones dishing out mass redundancies. People are being encouraged to volunteer more, at the same time as support for volunteering groups is being hacked. We are told civil liberties are being restored with less criminalisation and less incarceration, and proper inquests into torture allegations, and the death of Dr Kelly, yet the Communications Director is accused of overseeing phone-tapping and police corruption (these charges are, of course, thoroughly denied by Coulson who is said to be fully cooperating with the police).

It’s not that these are necessarily bad policies in themselves, but to implement them all at once shows a fundamental lack of joined-up thinking. No matter how good an individual policy is, if the policies from the ministry next door cancel it out, it just looks like your cabinet ministers don’t talk to each other for long enough to consider how each policy will affect each department, not to mention the rest of the country. Or, even worse, it looks like they just don’t care.

The Right to Die – and to not Procreate

This week furious opposition to, and support of, euthanasia, (largely based on the concept of the sanctity of life) has run rampantly alongside furious opposition to, and support of, financial incentives for heroin addicts to become sterilised. The moral questions surrounding these stories are enormous. And the answers overlap.

Two unrelated stories appeared in the news this week. Cristina Odone wrote a deeply personal piece in the Daily Telegraph on refusing to help her father terminate his life, foreshadowing the publication of her report for the Centre for Policy Studies, entitled Assisted Suicide: How the Chattering Classes Got it Wrong. Meanwhile, the first ever UK heroin addict took American charity Project Prevention up on their offer to pay him £200 to have a vasectomy.

One resolves around the circumstances under which we can terminate our own lives; the other revolves around the circumstances under which we can create new ones. Or rather, the circumstances under which we can make sure we don’t create new ones.

Cristina Odone argues that we should channel far more resources into improving palliative care, or even care for our sick loved ones at home if we can. Her argument is that we should not be ending someone’s life just because we, as a nation, are too cheap, lazy or incompetent to give them the necessary care to make their lives bearable. Well, that’s all true, and I doubt any supporters of euthanasia would argue that palliative care shouldn’t be improved for those who choose it. My question is, should people whose suffering won’t end no matter how good their care is, be forced to go on suffering indefinitely, just because Cristina Odone’s own story turned out the way it did?

Because while Odone’s story is incredibly moving, it doesn’t apply universally. As with most personal anecdotes, it is about the personal; the specific. It is, as such, not sound basis for policy-making. If euthanasia was legal – with proper safeguards as is the case in the Netherlands – nobody would force Odone to allow her father’s life to be terminated. But while it is not legal, other people are denied that same luxury of choice that she enjoyed.

Meanwhile, Barbara Harris from North Carolina has found her first UK ‘customer’ for her charity Project Prevention.

Barbara Harris set up her charity after adopting four children whose mother was a crack addict. Their suffering prompted her to give incentives to drug addicts for using long-term or irreversible birth control methods.

Coming hot on the heels of comments from Culture Minister Jeremy Hunt that poorer parents should not expect unlimited government support for large families, a debate about the rights and responsibilities of parenthood has been well and truly sparked.

Drugs charities like Addaction have lambasted the scheme, saying it “has no place” in the UK, and exploits drug addicts at their most vulnerable.

And if the state was bribing drug addicts to have vasectomies or use long-term birth control methods (something else Project Preventions offer), I would agree with them. It would be sinister, verging on horrifying. But a free transaction between two private individuals? If we make those our business, how many other similar transactions are we going to object to? Alcoholics being sold beer? People with learning difficulties going on reality TV shows? Obese people being sold chips? Stupid people being sold, well, anything at all?

If this anonymous man – ‘John’, as the papers are calling him – had decided to have this operation of his own volition, which he says he was planning to do at some point anyway (and surely no-one who one day hopes to be, or more to the point, is ever going to be, a loving, nurturing parent, would change their mind when presented with the offer of £200?) would his ‘vulnerable’ status as a drug addict mean that he would be denied that right to choose?

Both Cristina Odone and Addaction risk creating a society in which the most vulnerable amongst us are not able to make choices for themselves. Sometimes those we deem to be “vulnerable” will base important, life-changing decisions on factors that other people don’t consider valid, be it severe distress, or the prospect of being given two hundred quid. Just as everybody else does.

No matter how “vulnerable” an individual is, they are further invalidated in society when we start making their choices for them. While people are still in control of their faculties, while they are able to love, hate, vote and generally have an opinion one way or the other about any particular issue, surely we shouldn’t presume that we know better than they do, just because they are “vulnerable”? Indeed, these are the very people in society to whom liberty is the most important of all.

IN THE DOCK: Lord Browne

The charge: that the Browne Report compromises a crucial principle of free education and threatens equality of opportunity.

It can’t really be disputed that our university funding is in urgent need of reform, especially given the significance of opportunity and training in the current economic environment, and indeed it isn’t really disputed by anyone serious. That’s why Labour commissioned the report from Lord Browne in the first place, and why all the major political parties had to to take a position on higher education funding during the election – with the Liberal Democrats famously promising to oppose any rise in tuition fees. Their democratic accountability to their own voters, incidentally, is an entirely separate issue from the rights and wrongs of Lord Browne’s proposals.

Labour’s original introduction of tuition fees to let the costs fall on those who’ve actually benefited from a university education was, although controversial, not a morally repugnant idea. University education is not the only way to secure a well-paid job, and, depending on the course, isn’t even a particularly significant factor in future earnings. A study undertaken by the Higher Education Statistics Agency just before the recession showed the average graduate salary to be only £18k per annum, and that 7% of graduates are unemployed. Dr Nigel O’Leary (senior economics lecturer at the University of Wales) pointed out as early as 2005 a “growing number of graduates were chasing a fixed number of jobs” – a situation leaving more and more graduates very obviously destined for disappointment.

The coalition’s Graduate Tax has since helped balance out the corresponding debt burden that the lowest earning graduates are saddled with, but it still doesn’t address the fundamental problem that having a degree isn’t much good if there aren’t enough high-paying, skilled jobs at the end of it.

So, given that there are going to be increasingly fewer jobs as the government’s cuts plow on, would Lord Browne’s proposals be a disaster if implemented, or do they actually have some practical merit?

Well, best things first: Lord Browne has proposed that graduates don’t pay back a penny of their loans until they are earning at least £21,000 a year. Potential students from low income backgrounds – not to mention low-paid or recently made redundant mature students – seeking to boost skills without any guarantee of a corresponding wage hike don’t need to be so cautious about taking the plunge as they might have been when they’d start paying back the debt on a salary of only £15,000. To the same end, Browne has also proposed a simple, comprehensive grant system for the poorest students, which has been praised even by the New Statesman for its progressiveness.

So why the controversy?

The main point of disquiet in the Browne Report is the proposal to free up the universities, and allow them to charge whatever they like for their courses. This policy would, naturally, cause tuition fees to shoot skyward, potentially hitting around £12,000 for the most popular institutions. Critics argue that this will discourage poorer students from applying to Oxbridge or the LSE, causing (well, increasing, really) a cap in educational opportunities between rich and poor.

A fair concern, except the very poorest students won’t be facing these fees, because of the new, simplified grant proposals (in place of means-tested loans), and even those on the cusp of being able to pay their own fees will not have to pay back the money until – or rather, unless – they earn enough after they graduate.

Some critics complain that the raising of fees is wrong because of a fundamental principle that educational institutions shouldn’t make a profit out of their services. Such critics will be comforted to know that Browne also advocates imposing a levy on any universities charging over a fixed amount, which means in practice that any university charging the estimated £12,000 would be paying a 27% tax back to the government. The rest of the money would of course go to towards maintaining themselves, which is unlikely to constitute raking in any great profit at a time when higher education is tipped to be soon facing cuts to the tune of 70-80%.

But there is also a broader principle here. Not only is a university education not right for everybody (or even necessarily right for the 40% that Labour asserted it would be), not everybody wants a university education. Because not everyone wants a graduate job. Lots of people would rather (often earning considerably more than than the Higher Education Statistics Agency’s average of £17k) train as a plumber, or work their way up in a sector like retail to top positions, or set up their own business. I, with my office job (and fairly average salary), wouldn’t expect those people to have paid my tuition fees – moreover, as an ex-graduate now in a decent job, I would be happy to see my own taxes go up accordingly, to make sure they don’t.

It’s not that we can be sure there won’t ever be any snobbery amongst richer students choosing their future universities based on costs, or even on the part of universities during admissions selections. These things, if and when they arise, do of course deserve addressing. But there’s a different kind of snobbery going on here, too, and, crucially, it’s proving quite expensive to taxpayers. That is the notion that academic achievement is the only important kind, and that going to university is the only real way to validate yourself as a member of society.

Verdict: innocent.

Soldiers are not the only people with mental health problems

Liam Fox’s announcement that there will be a special 24-hour helpline for soldiers, and his promise of more mental health nurses for servicemen and women is very welcome indeed, given that this has allegedly been barely increased at all since the war in Iraq began. But war is not the only cause of mental illness.

The study, and the immediate policy action that followed addressing the sad reality of mental illness in our returning troops is a laudable step. After all, it’s been widely reported that 1 in 20 service men and women suffer from post traumatic stress disorder, and 1 in 4 returning soldiers have other serious mental health issues. It’s disgraceful for a government to find the money to send troops into battle but not to give them the support they deserve and need when they get back.

But while this development is excellent news, the new support services are being targeted at just one group of sufferers. 1 in 4 returning soldiers experience mental illness; 1 in 5 members of the general public experience mental illness.

No-one wants to diminish the severity of the army experience, or the brave contribution our soldiers make. But it is far from the only, or even the most common, cause of psychological distress.

Here are just two examples. Abuse victims, and the homeless. Both are cited by MIND as key factors in causing mental illness.

For example, Counselling Directory say that 20% of women who have been sexually abused suffer long-term mental health problems, while 13% of all child abuse victims are “permanently damaged” by resultant impairments to their mental health (compared with 6.3% of people who are not victims of abuse). Counselling Directory also cite several studies which have shown that nearly 50% of people hospitalised with a mental illness have a history of physical and/or sexual abuse.

Meanwhile, homelessness charity Shelter have identified direct links between poor quality housing, and homelessness, and mental health. Housing problems are “frequently” given as a specific factor in why hospitalisation occurs. Homelessness is often both a result of, and a cause of, poor mental health – and there are currently, before job losses and cuts have even started to hit, around one million homeless people in the UK. In 2008, a survey of experts conducted by St Mungos found that 59% expected to see a surge in homelessness as a result of the recession.

The extra support for returning troops is not only welcome, but necessary. But it is a small – and selective – first step in tackling the enormous shadow of mental illness in the UK.

IN THE DOCK: George Osborne

The charge: That George Osborne’s new cuts are unfair and badly calculated – and a way to sneak in tax breaks for married people through the back door.

Is it deliberate that the Conservative party have rearranged child benefit so that anyone around the tax threshold is better off partnered up? Is it deliberate that they also seem to be hinting that middle class families can get their taxes back through marriage tax breaks, instead of child benefit? Is this George Osborne’s way of telling us that far from rolling back the state, he’s going to use it to reach into your home, to needle and nudge people into the ‘correct’ lifestyle choices?

The idea that the ‘squeezed middle,’ as Ed Miliband puts it, should get some sort of recompense from the system they disproportionately pay into is not unreasonable, even when cuts are happening – indeed, perhaps especially when cuts are happening and taxes are going up. This is especially true of the lower part of the ‘squeezed middle,’ who fall into the middle when you calculate the mean average, but if you work out a median average they are far, far below it.

Whether this ‘giving back’ to the middle is best done by child benefit or tax breaks (or, as some may prefer to think of it, just not taking quite so much of their money from them in the first place) has become a seemingly endless point of discussion.

The idea that someone earning £44k per annum should be entitled to a handout per child regardless of how many children they have does seem, to some people, understandably ridiculous. While £44,000 is hardly a fortune, neither is it dire poverty. It seems we have the opposite problem to America, where there are huge numbers of extremely poor people who support economically masochistic policies because they believe themselves rich – or believe they soon will be.

On the other hand, those lower-middle earners fork out an awful lot of their money in tax for other people, and those taxes do, in part, fund child benefit. If the lower-middle earners are taxed to the point they can’t afford to have as many children themselves as they would wish (something which is not uncommon), it’s hardly unexpected that they will eventually grow to resent those taxes paying for someone else to have as many as they like. Unless we’re going to start limiting the number of children for poor families on benefit, it isn’t wholly unreasonable for middle-earners with kids to get back a bit of their own tax money.

So where does that leave Osborne?

Well, it leaves him with the perfect smokescreen for doing something he has no electoral mandate for; something the Liberal Democrats negotiated away as part of their conditional parliamentary backing. George Osborne has devised a policy whereby a single person raising a family on only £45,000 a year would no longer be entitled to any benefit, yet a couple with a joint income of £80,000 would. He either can’t add up, or he’s giving married people tax breaks through the back door.

Meanwhile David Cameron is hinting that marriage tax breaks are not off the agenda, and that this policy will be their likely way to grease the skids of these new middle-class cuts.

The problem is, the people who need the most support are surely single parents. There are all sort of hidden costs involved in raising a child alone – not least, childcare.

While it makes sense to argue that it’s preferable for middle-income earners to keep a little more their own money if it means they don’t need to take back from that same tax pot (which is best kept for the very needy), it is simply wrong to use taxpayers money as a carrot for particular lifestyles – especially when often those lifestyles are not a matter of choice. After all, how many single parents planned to be single parents?

Verdict: If executed (the policy, not Osborne) alongside fair tax breaks for the ‘squeezed middle’ – in particular, those in the lower end who also have children – they could make their claim of ‘fairness’ and it would be a sensible argument. But done as a way of rewarding certain types of people, often people who’ve just been lucky, at the expense of people who’ve been unlucky, the verdict, Mr Osborne, is a resounding guilty.

2 MINUTE RANT: Nadine Dorries proves the problem with her own system

Nadine Dorries thinks if you’re able to use Twitter, you shouldn’t qualify for benefits. This is exactly why it shouldn’t be up to people like her.

This is what happens when people with no medical training (quite the opposite it would seem: http://www.badscience.net/2008/03/nadine-dorries-and-the-hand-of-hope/), and no actual understanding of the people in question, start making judgements about who should and shouldn’t get financial assistance.

How often do we hear stories like this one? “I know someone who claims incapacity benefits and he looks fine to me…”, and so on. This is what Nadine Dorries is encouraging people to do via her blog: contact the DWP (who presumably have nothing better to do than respond to endless accusations from the general public who think there’s something a bit fishy about their neighbour’s new television) to report people who tweet too much whilst they are eligible for incapacity benefits.

The claimant who sparked this blog post from Dorries; the woman Dorries has decided to put in the stocks, is Humphrey Cushion, a woman who worked as a home carer and is currently on the waiting list for two foot operations (after that, there’s no reason to think she won’t be returning to work). The ignorance displayed towards her demonstrates beautifully the flaw in this system of grassing people up. For example, Guido Fawkes writes on his blog: “She claims to have arthritis but it clearly isn’t affecting her thumbs.” It wouldn’t do, Guido, it’s in her foot.

So being able to use Twitter doesn’t mean you’re fit to work. In fact, it’s the only form of anything resembling a social life for some people who are severely ill. Neither does having people round, or being able to leave the house once in a while.

But the truly insidious thing about this story is that Nadine Dorries has been accused of ‘scrounging’ herself. In 2009 Dorries was accused of claiming her main residence as her second home, meaning that she would have been claiming £24,222 of your money she wasn’t entitled to. She also claimed various hotel bills including mini bar use – during parliamentary recess – on expenses. She said this claim was submitted “by mistake.” Despite being a fan of benefit claimants being plastered all over the internet and even reported to the state if their next door neighbour doesn’t happen to trust them, Dorries declared the Daily Telegraph’s disclosures on parliamentary expenses fraud to be “witch hunts”, and whined that some MPs may be driven to suicide by the revelations about their theft of public money. Has she never heard the expression “what’s good for the goose is good for the gander?”

Professionals should be the only ones to make decisions and judgements about people’s ability to work. Neighbours and acquaintances making ignorant assumptions is bad enough. But should Nadine Dorries be making these judgements? In the words of one Tory councillor who I spoke to this morning: “No! She’s a moron.”

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