Here we go again. A General Election has been called and prospective Members of Parliament are lying to the people in order to get elected so they can then pursue their own agenda until it is time to get re-elected again.

A number of readers of UKIP Daily have expressed blindness about economics, so I am going to try to explain the basics using the analogy of a value of an average semi-detached house.

Let us say for example that an ‘average’ semi-detached house is worth £250,000, that’s understandable so 4 houses are worth £1,000,000.  So far so good.  The economy is so large that all main government budgets are expressed in billions of pounds, which is generally accepted as a thousand million pounds, so that would be equivalent to 4000 semi-detached houses.

When the Tories with the Liberals formed the government in 2010 they inherited from Labour an economy that was spending just over 150 billion pounds more than the HMRC was receiving in tax and other receipts.  Of that overspend, 40 billion pounds was on debt interest on the then £1,400,000,000,000 total debt of the UK and the remaining 120 billion pounds was overspend on public services.

Since then by a bit of prudence but not really austerity the Tories have reduced the overspend on public services to about 25 billion pounds, while the debt interest has risen to about 50 billion pounds.  So they are presently overspending 75 billion pounds a year, which is 1.5 billion pounds a week.  That is equivalent to the value of 6000 semi-detached houses every week.

The total debt ignoring public sector pension liability is now around £1,600,000,000,000.  Public sector pension deficit is now approaching £5,000,000,000,000.  This is why all the parties support mass immigration as they don’t have an answer to the problem except by massively increasing the number of taxpayers.

Labour pledges

Labour has now announced it will build 1 million new homes over the period of the next parliament if elected as the government.  If we assume the cost of building a home is £100,000 then they are promising to spend £100,000,000,000 (£100 billion) on homes alone.

Add to that Labour’s promises that are poring out with regard to social care and a big pay rise for NHS workers, reckoned to add £3.5 billion in the first year alone. Then in subsequent years with more hefty percentage pay rises for public services this would add at least £20 billion over the course of the parliament.

Of course they way Labour believes this can be funded is by increasing taxes on higher paid workers who they claim are not paying their fair share.  With one fifth of highest earners already paying half of the total HMRC revenue, how do you define fair.

The fairest tax rate is one that is the same proportion of earnings regardless. So someone earning £20,000 a year with a £10,000 personal allowance and a rate of say 25% would pay £2,500 a year in tax.  A person earning £2,000,000 a year would pay close to £500,000 a year in tax.  That is still a lot of money in tax BUT without the same rate for everyone I would be surprised if such an earner at present would be paying more than £200,000 in tax, due to aggressive avoidance.

Tory future

There is no guarantee we will actually leave the EU during the next 5 years because once this election is over the Tories have 5 further years to play for time and fudge the issue.  This means continuing the EU subscription of about £10 billion in 2017 rising by a tenth per year, totalling £60 billion over the period of the parliament.

Added to which Theresa May has given notice that we will continue the overseas aid budget hard-linked to our gross domestic product totalling £85 billion over the next five years.

With a huge majority the Tories can push through the increase in NI contributions for the self employed and raise the business rates in line with increased rateable values.  Both these items will seriously impact on the self-employed that unlike public and private sector employed people do not receive any other benefits.

There comes a point when being self employed is a mugs game, just as it is to employ people these days, who have better working conditions than the employer in most cases.  The Tories are clearly not the party of enterprise or small business, so they now are the party for the just about managing or for the higher paid.

UKIP position

Paul Nuttall of UKIP has declared that ‘our’ policy is to scrap £10 billion of the overseas aid budget and spend it on the NHS.  Just like during the referendum campaign with the £350 million a week saving from the EU membership should be spent on the NHS.

Real economics

Don’t any of them understand that if you spend EU membership and overseas aid money elsewhere on public services you are not making any saving in order to balance the budget.

In order to do that you need to reduce expenditure whilst NOT spending any increased income due to growth in GDP so that within the period of a parliament the overspend falls annually and then begins to be a surplus to start paying off the total debt.

 

We cannot afford the present invasion of migrants.

We cannot afford the membership fee of the EU, £8b – £15b.

We cannot afford to give 0.7% of GDP in overseas aid, £13b in 2016.

We cannot afford renewable subsidies and the knock-on effect of expensive electricity.

We cannot afford to close cheap coal fired power stations.

We cannot afford to spend any more on the NHS or care.

We cannot afford the vanity project of HS2.

We cannot afford not to frack for gas.

 

What we must do is switch NI into NHI and use it to directly fund the Health Service.  Everyone then pays the same proportion of their income to support health and if the people want more spent then the majority have to agree to increase the NHI rate accordingly.

The best way to raise more tax is to introduce a flat tax.  There is no fairer tax system than that because everyone is being asked to pay the same proportion of income above the basic personal allowance.  Despite what left wing supporters argue, increasing the tax rate with increased income is counter productive.

 

Print Friendly, PDF & Email