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Politics of pasties, pensioners and petrol

April 1, 2012

April 1st is probably a good day to write about just how irrational political debate can become.  The last fortnight has seen some really meaty political events for politicians, the press and the public to get their teeth stuck into.  But instead of the big reforms in the Budget and another major party funding scandal being seriously discussed we’ve had pasties, pensioners and petrol.  Thank God for the shock Bradford West result, highlighting the uselessness of Eds M and B.

The Budget paved the way to raise two million people on low earnings out of the income tax net.  It set out an income tax cut of £546 for basic rate tax payers in 2013, compared to where they were in 2010.  This was the major Lib Dem achievement in the Budget.  Reforms to the taxation of the wealthy  reduced the top rate of income tax to the same level as most other major economies but also put in place more effective taxes on wealth.

Those were the most significant and far reaching changes in the Budget.  But Labour and the media have instead focussed on   the VAT rate for pasties and the tax threshold for pensioners.

The “pasty tax” furore shows two things.  We knew already that our VAT laws are pretty hard for anyone to understand, even former tax consultants like me.  It’s easy for anyone to sow confusion.  But our VAT laws are also a muddle, with piecemeal changes over forty years leading to lots of anomalies and inconsistencies.  So you would have thought a reform that means the likes of Tesco will have to charge 20% VAT on its pies and pasties sold over the counter, bringing them into line with high street bakeries who already have to charge full VAT on freshly baked produce, would be welcomed.  Perhaps with better explanation by the Treasury, it would have been.  Instead of taxing big supermarkets the government look as though they are hitting a popular snack.   Perhaps we should slap VAT on caviar and lobster, where ever it is sold.

The “granny tax” row is even more daft.  In the weeks before the Budget a curious alliance of some Labour politicians and right wing media commentators were using that term to bash Lib Dem proposals for a mansion tax.  After the Budget the phrase moved seamlessly to something totally different.  A minority of pensioners currently benefit from a £10,500 income tax free allowance.   This is significantly more generous than the tax allowance received by people of working age, currently £7,475.  The Coalition is raising that allowance towards the goal of £10,000.  This is likely to be reached in 2014. From next year the pensioners allowance will be frozen until the allowance received by the rest of the population catches up, probably in 2015.  Given that the state pension is guaranteed to rise by at least 2.5% then all pensioners will still be better off.  Bus passes, winter fuel payments, free TV licences, prescriptions and eye tests and no council tax for many, all remain in place.  The current grey generation will be barely touched by the austerity measures necessary to bring our government finances into balance.

As for petrol, this was the budget dog that failed to bark.  The Chancellor had held down petrol tax rises for the last two years.  He wisely decided not to try it again.  Personally I believe that politicians have to stop trying to fool the public into believing that their government can stem the rise in transport and energy costs.  In my lifetime carbon fuel costs are  only going in one direction. Up.  Much better would be to ration car use by scrapping petrol duty and replacing it with road pricing.  A journey into central Bristol at 8.30am will be expensive.  A jaunt to the Mendips on a sunny Sunday afternoon will be much cheaper.  But instead of a rational discussion on petrol taxes we’ve had an outbreak of mass hysteria at the pumps.

What all this shows is that debate about tax and the economy is rarely grounded in reality.  It also shows that when posh ministers try to use populist language about petrol they can cause chaos.  And when party leaders pretend to enjoy chomping pies and pasties they just look like chumps.

I’m off now for my Sunday lunch.  A shepherd’s pie bought in a shop to shove in my oven, served with fresh vegetables.  All of it free of VAT…

21 Comments leave one →
  1. April 1, 2012 1:10 pm

    Yes, couldn’t agree more that the recent pasty and petrol controversy is distracting us from important issues such as your coalition partner party’s funding scandal.

    But there is also the passing of the NHS bill, effectively denationalising the NHS and allowing its privatisation.

    No mention of that in your blog.

    How did you vote on the Health and Social Care Bill?

    • April 1, 2012 1:23 pm

      why not engage with the points I’ve made? Is it beyond you? Do you support the tax cut that will help UNISON members? Do you support cleaning up the funding of political parties?

      • May 29, 2012 6:55 am

        16a6cRene Rene Rene353a9Hi Aya,Is your business is seellr of service or goods? to simplify if the company is seellr of goods the basis for output vat is based on sales invoice and if the company is seellr of service the basis for output vat is based on official receipt. For question no. 2, 2550M refers to monthly vat return and 2550Q is for quarterly vat return, 2550Q is the consolidation of 1st and 2nd month together with 3rd month (quarter).

  2. John Rippon permalink
    April 1, 2012 3:16 pm

    I was much amused by the casual assumption by the well-heeled Mr. Maude that, like him, EVERYONE had a garage in which to put the jerrycan! Which showed how out-of-touch these spokespeople are. I think the Coalition needs a team of people who really know what life in the big world is really like to thoroughly discuss with the Spokesperson what he/she is going to say and the possible “Unforeseen” consequences before the Spokesperson is allowed out of the door and strictly forbidden to make ANY “Off the Cuff” remarks.

    And I don’t mean a “Press Officer”!!!

    • April 1, 2012 3:51 pm

      I agree. David Davis made a lot of sense this week, saying that too many ministers came from a very narrow social pool. This applies to both parties in the coalition, sadly.

      • John Rippon permalink
        April 1, 2012 11:47 pm

        David Davis made a lot of sense and at least he has already demonstrated in the past that he has the courage of his convictions.

      • rosemary permalink
        April 3, 2012 9:45 pm

        Dear John and Stephen

        Be honest, both of you. Which man here is being sensible, and in touch with ordinary people, and which one is being maliciously irresponsible, as well as making us out to be fools?

        The jerry cans were already selling out, and people were already stocking up in various ways, because of what UNITE had announced. Half the socialist MPs are sponsored by them, including their leader, and the union also tops up the party’s coffers from time to time without the permission of its members. So attention had to be deflected, and how better than to whip up a feeding frenzy of class hatred and envy. It always plays well in this country, thanks to the broadcasters we are cursed with. The Today Programme, for instance, only resumed more balanced discussions of other subjects this morning.

        Why is this particular version of hostile prejudice and incitement to hatred – and sometimes even violence – not as alien to civilized and intelligent people as the other versions? We can’t expect it to be outlawed, nor would we wish it to be, because it is utterly correct, politically speaking. But we can surely expect our honourable MP to dissociate himself from it, as he would from any other form of nasty prejudice.

        Maude’s various words were plain and simple. They always are. On this occasion they were also impressively patient. He didn’t assume everyone has a garage, John. He also used the words “where sensible” on the other occasions on which he was being goaded in this way. Unlike some of us, he understands that the plebeian car is paramount, and never more so than over Easter. What is so out of touch about that?

        Supposing he hadn’t shot UNITE’s fox, and we had had a fuel famine, would I have been “panicking” if I had gone out and bought some extra tins of sardines? Should I still be planning for some sort of disruption in normal supplies after Easter? Including things like pharmaceuticals? I shall make up my own mind, from the various clues I pick up in the public realm, as the motorists did.

        But I should feel safer if I could be confident that the Liberal Democrats and David Davis were on the right side, should things get nasty, i.e. not trying to take personal political advantage.

  3. April 1, 2012 3:29 pm

    This is why they cal it the Loony Left, Stephen.

    • John Rippon permalink
      April 2, 2012 12:43 am

      The something-fishy article was very interesting.

      I was brought up in a Hotel/pub managed by my mother who was the Tenant, long before the evil days of VAT (We had Purchase Tax then). The pub was in Grassington in the Yorkshire Dales and I am eternally grateful for the idyllic childhood I spent there.

      Depending upon the weather we had a good summer trade in the restaurant and one of my jobs was to pop into the excellent fish and chip shop right next door and mother would slap it on to a warm plate, serve it up with tea, bread and butter and serve it up in the restaurant at a nice profit. Throughout the year she made large sweet jars full of pickled eggs and pickled onions and in the winter she made wonderful short-pastry meat and potato pasties which sold very well, HOT straight from the coal-fired ovens range.

      I finished my education, did my National Service, joined the BBC and went to Libya where I made pots of tax-free lolly.

      Then came mother’s first blow: the Brewery took away the traditional wooden barrels and installed those wretched metal monstrosities behind the bar with all the paraphernalia and she had to employ a “Cellar-man” because she was well into her sixties and could not cope with it.

      Then the dreaded VAT came in: if she served her goodies to be consumed on the premises she had to charge VAT, but if they were taken away there was no VAT: which meant that she had to run TWO accounts using an old till. No modern tills which do the work for you. She was upset and worried by the whole wretched business. So, I bought her a nice house in the village and she gave up the Tenancy. I paid the utility bills and so she could live comfortably on her pension.

      The Pub? after a series of bad tenants the John Smiths brewery sold it for £19,000 to someone who over the years extended and improved it and flogged it for £2,000,000

      The Fish and Chip shop? Did they then have to pay VAT on all the food which was NEVER consumed on the premises? I have no idea.

    • rosemary permalink
      April 5, 2012 9:13 pm

      This, from waronfreedom, is the nub of it, not petty class prejudice about who likes pies and pasties, who likes sausage rolls, and who likes fish and chips. In my experience, most men like them all, whether or not they were born into the lower upper middle class, and no matter who educated them.

      The continentals traditionally haven’t paid their income tax. So when Mr Heath persuaded us into “the Common Market” on false and treasonous pretences, and it turned out to be a political and fiscal union, and monetary as well for some, we were bound to find ourselves paying the tax which was designed to catch the Latin income and property tax dodgers. To begin with, food, children’s clothes, books, and newpapers were exempted in the UK, because it was felt to be too sudden a change in tax culture. But gradually la difference is being eroded, as one chancellor after another chips away at it, to do the bidding of their continental masters.

      Obviously the newspaper industry is getting nervous. This could be the last straw for them, and they are just about the last green bottle still hanging on the wall.

      The puzzle for us here on this blog, is why the Liberal Democrats who are so keen on the EU, don’t own up to what their passionate belief in a one size fits all bureaucratic regime is costing us, right across Europe.

  4. rosemary permalink
    April 1, 2012 11:21 pm

    Several records to set straight here, John and Stephen.

    For now I’ll confine it to the most serious one:

    “The current grey generation will be barely touched by the austerity measures necessary to bring our government finances into balance.”

    This is as skilful as the “God knows who is a muslim and who is not a muslim” rhetoric. By which I mean you manage not to mention the printing of money and the artificial lowering of interest rates!

    The government is borrowing, spending, and printing money in a way which is not just unaustere, but unprecedented. Every accountant’s hair should be standing on end, as well as going grey.

    • John Rippon permalink
      April 1, 2012 11:42 pm

      Thank Fish and Chips for that Rosemary whoever- you- are: I never mention Grey so I suppose I am in line for your erudite and pointless verbosity. Dunno how you find the time.

      • rosemary permalink
        April 2, 2012 10:20 am

        I am really sorry about the verbosity and the pointlessness, John. The former is intended to ameliorate the latter. Communicating in this way with a conscientious MP and his other constituents is a challenge, but a blessing too, and one I wish we had had in former times.

      • rosemary permalink
        April 2, 2012 10:42 am

        PS the less time one has, the more words one will use in making points. As the student said to his tutor: “Sorry it is such a long essay. I didn’t have time to write a short one.”

      • May 27, 2012 12:09 pm

        Agree . it has to be cheaper than innertet.. let them sell it over the net only instead of CD’s./ people can burn the CD’s on their own as required..In this way the RMC and Marketing cost will be Zero.. and all the amount on which they sell the movie /songs will be a profilt.

    • April 2, 2012 8:44 am

      Rosemary, you are right to say that pensioners with cash savings (like anyone else) are losing out due to low interest rates. But at this time a hike in rates would push the very fragile economy back into recession, lower tax revenues and we’d be in a Spain/Italy situation. Everyone, incl pensioners would then have to swallow even more austerity.

      My hair started going grey under the last government!!

      • rosemary permalink
        April 2, 2012 10:16 am

        Thank you Stephen for this gracious acknowledgement of an inconvenient truth.

        Can you also please tackle the effects on everyone of printing money?

        Including in the long term even borrowers, who are benefiting at the moment from the cancellation of their debts and at the same time acquiring capital assets? The biggest debt of all that is being cancelled in this way is the public debt, but no capital assets are being acquired as they were in Japan where a superb infrastructure has eased the lives of a heavily populated country.

  5. John Rippon permalink
    April 4, 2012 1:45 am

    Rosemary: all is revealed: you watch rubbish Sky News!

    I NEVER watch this channel. I watch BBC News on Virgin channel 601 and their interview with Maude was a straight uninterrupted statement followed by obvious questions based on what he had just clearly said.

    I watched your “Sky” 9-minutes (!) interview with the appalling presenter constantly interrupting Maude and scoring point after point and was appalled: I suggest that you try to get the straight, balanced BBC News interview and listen carefully to what he said.

    • rosemary permalink
      April 4, 2012 8:52 am

      I only gave the Sky example for balance: so as not to be accused of anti-BBC bias. It is the BBC I am most concerned about, as I have argued before on this blog, and as I think I indicated in my remarks on the Today Programme – which has 3 hours a day to brainwash people at their most receptive: in their beds, in their bathrooms, in their kitchens, in their cars, on the way to school, at work…

      My other point is, should UNITE declare war on the government next week, and I then go out to stock up on essentials, will I be “panicking”? And will it all be the fault of the men in the government who were well educated, and educated independently of the government?

      • rosemary permalink
        April 5, 2012 12:07 pm

        PS, John, the best bit of the BBC’s political broadcasting is the Record, on the Parliament Programme. No 81 on the free digital system. You need time and concentration to get the best out of it, but it is a good antidote to the rest of the noos an’ entertainment genre – not least because it operates entirely without interruption from chippy and over-excited hacks.

        A recent one I watched was the March 6 session at which the backbench select committee representatives questioned the PM at length on all their individual subjects.

        If you haven’t watched this particular one, I would recommend it, but there have been many others in the same vein, and some excellent lectures by parliamentarians too.

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