I’ve just read that our new Home Secretary has ditched compulsory ID cards, which is one albatross out of the way. I had a feeling it was to be Labour’s Poll Tax.

Can’t seem to generate a feeling of ownship over my local NatWest, don’t know about you. Wonder what they’d say if I just popped in for a cup of tea?

Next ‘dragon’s den’ on the situation is on Newsnight tonight, I think (or was it last night?)

Stephen – I agree with you that something drastic needs to be done to stabilise public debt.. Your suggestion to increase indirect taxes may not, however, be the most popular proposal from any government. The suggestion of using entrepreneurs ideas is a good one. With input from the private sector into the process and regulation of public finances, we could see a much needed boost in public confidence. After all it is their money which the government uses, so why shouldn’t the public have their say?

In terms of where the government borrows its money, the Treasury has two mechanisms which it can use to raise funds. Firstly through issuing bonds, which ultimately is borrowing from the private sector, and secondly by printing money (quantitative easing). The latter is potentially extremely inflationary.

What cannot be stressed enough is the importance of restored confidence. If confidence is restored then the credit markets will begin to flow again, and the government will be able to return to more traditional methods of raising money through issuing bonds. That is, being able to raise money from the public and for the public.

Senex – I believe that it is essential that the House of Lords tries harder to make the government accountable for its spending behaviour. I agree with you that the government needs more effective regulation on its budgets and taxation policy, but it also needs to be more transparent. Yet again the government is failing to do this. We must not forget that the European Parliament may yet impose its own regulations, since many of the banks have European offices.

Yesterday they announced that it would not present us with its spending plans before the next general election. This is depriving the public of its right to know. As a tax payer, you should have the right to hold the government accountable for its spending plans and be able to see whether their plans are value for money.

The Commons has had a mandate to improve the lot of people and as people have grown ‘wealthier’ they have become the focus of Treasury taxation. The public now have a partnership with the Treasury, a fifty-fifty arrangement.

You earn ten pounds and the Treasury will takes away five. If you fail to pay the Treasury on time or whilst staying ‘within’ the law you are perceived to have bend the rules the authorities will fine or imprison you for breach of contract.

Circa 1909 the Treasuries coffers were not that full because the general level of taxation was very low. Any attempt by the Commons to increase spending was constrained by the House of Lords because of the lack of revenues. In other words the Treasury had little money and the House of Lords was determined that it was well spent.

The prevailing politics of the time was self-reliance, low taxation with no succour for the poor. Now the prevailing politics is state dependency, high taxation and wealthy suckers. God bless the sacred ‘poor’ who have made this possible for us.

Now we have come full circle. The Treasury has no money but ‘nobody’ constrains Commons spending, least of all the House of Lords. The government without an act of Parliament takes it upon itself to immerse the nation in enormous amounts of debt, on faith, that things will turn out for the best without any MP ensuring his or her constituents get the best deal.

Meanwhile National Insurance, it is not a tax, protects the NHS and other welfare systems from cuts; solution put up National Insurance, keep the target the same and cream off the surplus as general taxation to pay off some of the debt. This is a betrayal of the principal of the ‘Peoples Budget’ of 1909.

We need a mechanism once more to oppose Commons budgets and taxation policy.

Ref: Old Age Pension Act; Peoples Budget
http://www.spartacus.schoolnet.co.uk/Lold.htm

If only we were all bankers.

I see one of the TV programmes, is it Newsnight, is featuring a ‘dragon’s den’ for people with bright ideas on trying to sort out the mess. So far, removing universal benefits for those on £30,000+ incomes has been ruled out, one or two ideas have been adopted.

My own bright(?) idea would be a straight 20p levy on all ATM machine transactions. I’m unsure how much that would raise, but I would suspect that it would have the great merit of costing virtually nothing to collect, and would make a meaningful contribution over time.