Christmas Tree 3361 Posted May 14, 2010 Share Posted May 14, 2010 We must be fair to everyone – even the rich Prosperity masked deep social divisions. As the cuts bite, the fractures will widen unless the pain is shared http://www.timesonline.co.uk/tol/comment/c...icle7125822.ece For all their muttering about jobs forgone and policies traded away, many Tory backbenchers think that David Cameron has played a blinder. They know that “Lib-Con cuts” won’t have the same deadly ring as “Tory cuts” would have had in the coming age of austerity. Many Labour MPs hope that the coalition will kill the Liberal Democrats for the same reason. But they are seeing things only through the prism of their tribe. I may be naively optimistic, but it seems to me that what has happened is much bigger. Before the election, the greatest risk to Britain’s future was that politicians would keep shuffling Gordon Brown’s A4 lists of vague “efficiency savings” until foreign investors lost patience and drove interest rates sky high. What we have most desperately needed is a leader who will make courageous decisions to balance the books. We also need a leader who can convince us that the pain will be shared as equally as possible. Mr Cameron is the man to do the first, Nick Clegg the man for the second job. There is now a chance to bring the country through recession more united than divided, even to reshape the State. “Fair play” may have come to seem a quaint notion, the predictable mainstay of Britishness studies. But it remains deeply emotive for many of us. A widespread and corrosive feeling has developed in this country that other people are getting away with things. There has been a growing disconnection for many years between Labour governments that talked fervently about fairness while constructing a world in which peaceful protesters were assumed to be terrorists, parents were suspected of child abuse, criminals were let off lightly and people feared that the police would put them in court for defending themselves. In which people who worked in finance were making like bandits and public officials were taking huge payoffs to move from job to job, while the hard-working middle found itself paying for a benefits system that is wide open to fraud and has trapped people in dependency. On the purely financial question, the problem with “cuts” is that each little group suspects that it will be hit harder than the others. So it is important that the deal being hammered out by the coalition already has many of the hallmarks of a fair settlement. It will freeze public sector pay, raise the retirement age, overhaul the welfare system and tax banks. It aims radically to transform and improve schools, which will be critical to increasing opportunity. There is a surprising absence of green taxes on pollution. But the coalition will move towards the Liberal Democrat desire to raise to £10,000 the threshold at which income tax is payable . This is sensible: it is an outrage that the richest fifth of people in this country pay less as a proportion of income tax than the poorest fifth. But the devil will be in the detail. Raising the tax threshold must not take priority over reducing the deficit; the better-off can only be squeezed so much. It’s a delicate balancing act. George Osborne knows that there is still a widespread view that rich bankers should take all the pain, because they caused so much. But he also knows that Britain cannot afford to be hostile to enterprise. One evening last month at the Mandarin Oriental Hotel in London, Swiss government officials were mounting a canapé pitch to persuade 200 financiers of the merits of moving to Geneva. If the British Government gains a reputation for imposing arbitrary taxes on unpopular businesses we will lose entrepreneurs in all sorts of sectors, not just hedge funds. Like any group, the rich need to pay their share as part of a fair deal. Some will choose fondue and to keep more of their cash. But if they were only focused on the cash, many would have left already. I have met many entrepreneurs and financiers who are deeply concerned about inequality in this country. They recognise that poverty impoverishes us all. Those people are as frustrated by the ineptitude of the State as they are by high taxes. I have never met an entrepreneur who didn’t believe in people, their common sense and their capacity to invent and develop. For 13 years we have had a party in power that was fundamentally pessimistic about people, believing them incapable of taking the right decisions. Eventually, the belief that the State knew best led to sustained attacks on civil liberties, and too many directives and targets for public services, which were totally counter-productive. Revulsion against this command- and-control mentality offers potential for a much deeper alliance between Conservatives and Liberals than might at first appear. In The Liberal Moment, a booklet he wrote for Demos last year, Mr Clegg argued that “progressive conservatism” was impossible (as well as an oxymoron), because Conservatives are cautious about the unintended consequences of change and reluctant to change the social pecking order. But I wonder. What has been striking in the past few years is that most radical ideas for tackling poverty and inequality have come from what the media likes to call the Centre Right. free from the dead hand of the State. The Conservatives have become passionate about solving Britain’s social crisis, not just its economic crisis, and see the two as linked. Philip Blond, the thinker who describes himself as a new Tory, has argued persuasively that people need a stake in what they do. When the profitable Vestas wind turbine factory in the Isle of Wight was threatened with closure by its Danish parent, Blond raged against rules that appeared to prevent the workers from taking control through a management buyout. This has strong echoes of Mr Cameron’s concept of the Big Society, which would roll back the State and unleash entrepreneurialism in the public and private sector. The division of Left and Right makes less and less sense. The widest gulf is now between the defenders of the people and the promoters of the State. When an overwhelming majority of people in Britain agree with the phrase “people who play by the rules get a raw deal”, it is time to understand that fairness is not simply a matter of employing outreach workers to ensure equal access to public services. The recession has broken open deep frustrations about immigration, the welfare state and inequality, which had been masked by prosperity. Austerity measures could exacerbate those divisions. We need the rich and business to drive growth. We need to put the poor on a road where they can contribute. We need to grit our teeth and share the pain. This does seem to be the way we are headed and its hard to know how this will play out 20 or 30 years down the line. The parties will only get closer and closer, politically and voting will be reduced to a sort of x factor politics, if not already. Labour and Conservatives have moved too close to the centre and I cant really see either party moving back to old stomping grounds. Im also unsure whether this makes governments better or worse ie the fact that we are not reeling policies from the left to the right, more tinkering on the edges. With regard to the defecit and planned cuts etc.... a commentator on the above article left this little story which I found amusing. Let us suppose that every day, ten men go out for beer and the bill for all ten comes to £100. If they paid their bill the way we pay our taxes, it would go something like this: The first four men (the poorest) would pay nothing. The fifth would pay £1. The sixth would pay £3. The seventh would pay £7. The eighth would pay £12. The ninth would pay £18. The tenth man (the richest) would pay £59. So, that's what they decided to do. The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. "Since you are all such good customers," he said, "I'm going to reduce the cost of your daily beer by £20." Drinks for the ten now cost just £80. The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free: but what about the other six men - the paying customers? How could they divide the £20 windfall so that everyone would get his 'fair share?' They realised that £20 divided by six is £3.33. But if they subtracted that from everyone's share, then the fifth man and the sixth man would each end up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay. And so: The fifth man, like the first four, now paid nothing (100% savings). The sixth now paid £2 instead of £3 (33%savings). The seventh now pay £5 instead of £7 (28%savings). The eighth now paid £9 instead of £12 (25% savings). The ninth now paid £14 instead of £18 (22% savings). The tenth now paid £49 instead of £59 (16% savings). Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings: "I only got a pound out of the £20," declared the sixth man. He pointed to the tenth man, "but he got £10!" "Yeah, that's right," exclaimed the fifth man. "I only saved a pound, too. It's unfair that he got ten times more than I did!" "That's true!!" shouted the seventh man. "Why should he get £10 back when I got only two? The wealthy get all the breaks!" "Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor!" The nine men surrounded the tenth [richest] man and beat him up. The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill! And that, ladies and gentlemen, journalists and professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. However, tax them too much, attack them for being wealthy, and.......... Link to comment Share on other sites More sharing options...
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