Comin’ back for more 1970s style

Posted on September 30, 2025 by martin

When a government refuses to rule out breaking an election pledge you know they are scraping the bottom of the barrel. At this stage saying this is an outright admission that breaking the pledge is already been planned.

Stating that “the world has changed” will not do. The world is always changing and most of the problems were known about before the last election. The previous budget introduced huge tax rises on the basis that it was a “one-off” but that will now be seen as a government-defining fib. They will be stained as a party who will whack up taxes at every opportunity.

The attempt at softening-up by the drip-drip of possible tax targets with the delusion that people will be glad it will turn out not as bad as expected has simply crushed investment. Money people and organisations save because they might get smashed again like they were over school fees VAT and National Insurance is money that does not go towards growth. And those in charge are surprised at why things are statistical noise away from recession.

Reinforcing the narrative that Labour will come back for more again and again is there being no demonstrable ability to control costs. The underwriting of JLR by £1.5 billion was no surprise once the taps were opened for British Steel giving succuor to the idea Labour are back to the 1970s.

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Desperate for tax

Posted on August 8, 2025 by martin

So Gordon Brown thinks gambling should be taxed more to fund removal of the two-child benefit cap. Aside from the obvious heart-string tugging this is bad on multiple levels.

This is a classic example of a hypothecated taxes but at the end of the day it is just an excuse to get more cash for the pot. Fine in isolation but these things are never in isolation. Claiming this is taxing a supposed evil to fund a supposed need is dishonest as well as emotional blackmail.

I don’t “get” gambling and have no doubt that it is very harmful to significant sections of society but when people who talk about gambling being corrosive behaviour demand it be taxed rather than regulated if not outright banned, it is simply them thinking government should jump on the bandwagon of profiting from the damage it causes rather then preventing it. As with smoking it means government relies on people continuing with their destructive behaviour.

However the biggest problem is this is yet another case of the socialist delusion that the solution to everything is finding yet another pot of supposed “undertaxed” revenue and smashing it hard. Employers’ NI, school fees, the list goes on. No matter how it is dressed up it is the same old story all over again and again.

The bit about gambling enjoying a “complete exemption” from having VAT applied is another cynical sleight-of-hand because the VAT exemption applies when takings are already taxed via gambling duties. They are probably thinking of the situation with petrol where tax is paid on tax so they get even more by the back door.

Government is desperate for cash and this is just another in a growing line of excuses.

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The flood-gate rush

Posted on June 29, 2025 by martin

When British Steel got nationalised in all but name it was clear that the bail-out flood gates had been opened. Low and behold it took one day from the announcement that Lotus was ceasing production to having the prospect of taxpayers money thrown at them.

So far the industrial “strategy” is little more than throwing money at certain companies to alleviate effects rather than to fix actual problems and energy prices are the most blatant. Sky-high energy prices are down to the marginal pricing model which is gravy-train where wind generators with a marginal generation cost of virtually zero getting paid the same rate as horrendously inefficient peaker power stations. With axing of this scheme off the table high energy prices are structurally locked in.

Oh, and the 2 year consultancy period before any subsidy kicks in. Preying the companies slated to get the kickback actually survive long enough.

Between Brexit and the Trump tariffs building these cars in British factories only makes sense for servicing the domestic market, and that market cannot compete in board rooms who typically think in terms of continents. Any trade deal with the EU that does not involve rejoining the customs union is more or less a waste of time, and with Trump’s stated intention for a reversal of trade deficits any UK-US deal will have nasty side-effects. Put bluntly British exports will not be an engine of British economic growth for for foreseeable future.

So with export markets dead what can Britain actually do? It needs to get its domestic shit in order.

Reform UK’s idea of putting business chiefs in government at first looks like the right direction, but what government really needs is business founders. Farage was a metals trader which is a cushy job obtained via some old-boys network so his ideas of how businesses grow is about as bad as the typical public sector unionised lifer. Michael Heseltine and Chris Huhne are the only two cabinet ministers I can think of within my lifetime who had a proper understanding of business at the sharp end.

Back in the early 2010’s what I saw was SME’s being thrown to the wolves, and the directors of the company I worked for back then had to risk their houses to further the business. Risk must come with reward but the ever-higher taxes and withdrawal of benefits being heaped on the £100k+ earners make this a joke. So forget about this source of growth.

The government has to think in terms of rule rather than exception but so far it looks like 1970’s playbook of avoiding mass layoffs via handouts. The problem is all the companies with around 5-10 employees who lay off one or two rather than taking anyone extra on, and ignoring these micro organisations is in plain sight to see. What is desperately needed is an environment that both respects and understands building things up rather than throw cash at those who can put a gun to the government’s head.

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