The Speech the Chancellor Should Have Given on Budget Day


Mr Speaker, our budget this year takes place in a changed economic environment. It is now clear that we live in a global economy which has so fundamentally changed from its previous form that we would do well to call it 'globalisation 2.0'. In this new dispensation, a series of imbalances compete with periodic, oil-based contractions to reorganise global and national economies.

It is clearly the case that cheap oil, by which I mean oil at viable prices, which can be extracted relatively easily, is a thing of the past. Though prices may fluctuate, and though there are clearly reserves that will last for centuries, oil is now found at depths and temperatures and in ways that stretch technology to the limit, and which invite ecological disasters.

We, on the other hand, in the UK are lucky Mr Speaker. Not only are gas and oil fields still producing for export--with a combination of English and Scottish technology and integration that cannot be disentangled--but British territories overseas, such as the Falkland Islands, are well placed to exploit the inevitable rise in the price of oil, which will be sustained by Chinese, Indian and ASEAN demand as much as by the diminution of supply elsewhere for many years to come. So the British budget of 2012 starts on a good note.

Things get even better on the most basic level of energy when we consider that this island stands atop at least two centuries worth of coal. Mr Speaker, I propose to divert fully half this year, and then half again in the following years, of our subsidies to unproven and unreliable wind and solar technologies (but not wave and nuclear power) to provide for a general zero tax on any cooperative enterprise engaged in opening new mines or reopening old ones, so long as liability for any failure is accepted by the new co-ops or companies.

The economy of any strong country, Mr Speaker, is based on an ecology of economic interests. I propose to recognise that different businesses require different treatment. Therefore, to encourage the small and medium enterprises that are the backbone of any decent society, I propose to merge the national insurance and tax systems and to develop a new, cloud-based computer programme which all small businesses can join. In this 'cloud template', small businesses would be in direct touch with Her Majesty's Revenue and Customs and could, at any one time, see how much is owed in tax, when the tax is due, and input new transactions. I propose that the work of developing software for this new system be funded by a Treasury prize, rather than government procurement, of £1 million pounds, provided the creators allow for open licensing of the technology. I also propose a new, fifteen per cent tax rate on small businesses to replace corporation, capital gains, dividend, and income taxes as they apply to those businesses currently.

I also propose one, flat, unavoidable tax for larger businesses, with an elimination of loopholes and general avoidance measures, to be set initially at twenty six per cent. I propose the extension of the Freedom of Information Act and the Human Rights Act to large businesses, on the basis of a concurrent and balancing elimination of burdensome employment and equality legislation.

Mr Speaker, I propose the creation of a national debt fund, into which payments from energy taxes and Value added tax can be made, with the express purpose of paying down national debt and paying out on pensions liabilities. The fund shall be activated when our deficit is closed.

To that end, I propose an aggressive programme to close the deficit. Mr Speaker, I propose the suspension of international aid payments; the elimination of the Departments of Business, Culture Media and Sport, and Overseas Development; the elimination of the Scotland Wales and Northern Ireland Offices. I also propose the creation, under the auspices of the House of Lords, of a Government Commission to monitor outsourcing and procurement contracts on the basis of delivery, cost and efficiency and to impose penalties on any deal. I propose that a general debt to GDP target be adopted, and that all government activities should be assessed in terms of the target. When we return to surplus--which we will--I propose that the debt be paid down year-on-year.

I propose that the National Lottery be amended so that present revenues go to good causes, but that any future revenue increases go to the national debt, and also that tax returns submitted on time be immediately associated with a number that gains a place in a lottery, capped at two million pounds prize money. I propose the reinstitution of the 10% tax on bets which can be paid before or after they are resolved. If we are to allow gambling, it should not be the House that wins, but the people.

Mr Speaker, I propose that government subsidies for rail companies and universities end. If any rail company should be unable to bear the loss, I propose that it be transferred on a cooperative basis to a new British Rail Federation, and if any university go bankrupt, I propose that it be absorbed into a new, transferable-module, open-access British University under the guidance of the Open University.

At the heart of economic management should be democracy and self-determination. My Right Honourable friend, the Justice Secretary, will be bringing forward proposals for a referendum on our membership of the European Union shortly. Already, more than half of our trade is based outside Europe, Mr Speaker, and we are the tenth largest exporter in the world. We have no hope of developing our position and our industries if we measure our comparative advantages in terms of what remains an alien entity which needs us, our exports and our subsidies, more than we need it. In addition to the EU's effect on our economy, however, we should not lose sight of the effect of local government. Often, local government and agencies drive up costs, impose taxes, and go against local wishes and local business whilst failing in basic duties to collect rubbish and fix roads.

We propose, Mr Speaker, on referendum day, to suggest two new questions. One would, if assented to, allow for the elimination of half the council seats in England and Wales; another would devolve local taxes to local areas on the basis that they submitted their budgets to an affirmative referendum of local people every year. We are confident that, in this way, we can allow people to take power back over their communities, as well as lowering costs.

Mr Speaker, our model of tax payment has for too long been one based on the centuries old idea of coercive tax inspection. I propose a new model. On birth, every registered citizen will be granted a basic bank account held electronically at the Post Office. Any transactions in this account will be taxed at zero per cent. Should citizens wish to maintain their accounts upon maturity, a ten per cent tax will replace all income and national insurance taxes provided that they allow the tracking technology in the accounts to migrate to any competitive high street account which they choose to replace their post office account with. Alongside a £10000 rate of income tax, the advantages to the state and to the individual of this form of tax payment are obvious, Mr Speaker.

I also propose a commission to reorganise Her Majesty's Revenue and Customs, to return dedicated tax inspectors rather than call centres, and to gradually shift to a new system of electronic, real-time tax collection through banks or the post office, which would be accompanied by a flat 10% rate to reflect the ease of use. Those who wished to maintain the present, end-of year paper based system and monthly pay-as-you-earn, could of course do so, but at the cost of present taxation.

I propose two commissions of ordinary people and experts under the aegis of the House of Lords. One would examine reform of the banking, shadow banking, and investment system with an eye to allowing the development of a forest of credit unions, mutual societies, health insurance groups, responsible retail banks, and merchant banks which can free us from the threat of ever again facing the consequences of oligopoly banking. Another would carefully examine our Welfare State, which is now approaching its seventieth year, with the aim of regenerating and redeveloping the links between the citizen and their legitimate public needs, and their reform. Once the commissions make serious proposals, my honourable friends propose to place them as referendum questions before the British people.

Finally, Mr Speaker, I propose that citizens be given an educational allowance to offset against the cost of skills or language acquisition, to spur new growth, to encourage our people to look east, west and south, and to take advantage of a world which still has need of our skills. I commend a Budget for energy, for efficiency, for growth, and for debt repayment to the House.

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