DIY Investing;173985 wrote:Taxation never works. There are maybe some things the government could do around pension tax relief, but that is a tax on the young, and it will likely just exacerbate the future retirement crisis. It’s also small beer.
The only way to get out of this mess is to cut all unproductive public spending right down to the bare minimum, use some of the savings to cut the deficit to zero and use the rest to invest (not spend) for real economic growth.
Having worked with Tory ministers and Tory councils Im afraid to say that they are as inefficient at allocating resources and overseeing public spending as Lab counterparts. A few reasons:
- the pressure on politicians to spend and increase spending by 2-3% is enormous. Its daily. If Dorothy has an ingrowing toe nail in Dorset the first response of the British public is: why isnt the government doing something.
- Spending money = activity. Activity = politician is doing something. S/he can have something to say -written by civil servants - on the floor of the House: 'I say to members, we have established a strategic programme taskforce in outer Dorset who will drive improvements in preventing ingrowing toe nails'. This means tens of people employed on £40-180k pa who then hire private sector consultants on £1k per day who deliver 'change transformation programmes'. Such transformation involves organising seminars for hard pressed GPs and hospital managers where they are told ingrowing toe nails is an epidemic which must be tackled. They will ask 'how'. Consultants will tell them 'that's your job'.
- Thatcher failed to curtail the size of the state
- Since WWII UK has mostly rung fiscal deficits, mostly under Tory governments.
At least in the 80's some - Tory - politicians talked about curtailing spending. Today no one does. Literally no one. Not even John Redwood. Recently the entire media along with Lab appeared to be asking the govt to increase education spending by £12bn. No one even thinks about how much £12bn is...its just a number that people think can be found easily.
- Then we all love our public spending. The middle classes especially love public spending: state pension, NHS, social care etc. A chap down my road owns a £1.5m house, has 2 cars in his drive each worth £60k+ (BMW/Merc) and has a disabled parking badge enabling him to park for free at the local Waitrose. Meanwhile the Waitrose workers on not much more than the min wage have to pay £10 a day to park there. We are all addicted to public spending.
Rant over.