Welfarism

This Budget debacle signifies much more than Rachel Reeves’ ineptness

philmullan Debt, Democracy, Economic policy, Politics, state, Welfarism

After this shambolic Budget, it is now beyond doubt: no one should believe a word uttered by the chancellor of the exchequer. Her Budget statement this week amounted to a litany of broken pledges – including some made only weeks ago.

In her spirited response to Reeves’s statement, opposition leader Kemi Badenoch urged the chancellor to stop blaming others and instead blame herself. While Reeves certainly has much to answer for, it is ultimately misleading to hold her alone responsible for this politically and economically alarming state of affairs.

The deeper issue is that the British political system itself now produces figures like Reeves: technocratic managers who lack both authority and genuine democratic accountability. Reeves, Keir Starmer, and their cabinet colleagues merely personify the impotence of this type of managerialist politician.

Read the full article here.

Rachel Reeves has no answer to Britain’s financial mess

philmullan Economic policy, Politics, state, Debt, Welfarism

The deluded chancellor is at it again as Rachel Reeves prepares her second “one-time-only” tax-raising and debt-increasing autumn Budget. After last year’s Budget, the chancellor declared: “We will never need to do another budget like this again… We have now set the envelope for spending for this parliament, and we are not going to be coming back with more tax increases or, indeed, with more borrowing.”

But Rachel Reeves has spent much of the past month suggesting that it would be necessary to raise income-tax rates in the next budget. But now Reeves has U-turned on her U-turn. Having spent weeks suggesting the dire state of the public finances necessitated income tax rises, she appears to have changed her mind again. According to reports, Reeves was told by the God-like Office for Budget Responsibility this week that the government’s financial shortfall will be not quite as large as first forecasted – closer to £20 billion than £30 billion. This ‘good news’ apparently allowed Reeves to back down on some of her floated increases in income tax rates. There’s little doubt that political expediency also played a significant role in this U-turn on a U-turn.

This government seems to have absolutely no idea how to tackle Britain’s profound economic challenges. So let’s imagine an alternative approach: a new government is elected next week, with a mandate to fix things. What sort of budget could it come up with in the interests of the country?

Read the full article here.

Why a wealth tax is a terrible idea

philmullan Debt, Economic policy, Politics, state, Welfarism

The wealth tax cure-all is having its day. Long time a favourite of the ‘progressive’ left to ameliorate the evils of capitalism, it has gained extra exposure from Gary Stevenson, the City trader turned bestselling author, YouTuber and leftist poster-boy. This self-acclaimed “very, very good economist” puts taxing the rich at the centre of his crusade for a fairer society. More recently, with the Labour government’s fiscal plans in tatters, their former leader Neil Kinnock floated the expediency of a 2 per cent tax on assets valued above £10 million. Subsequently at Prime Minister’s Questions the current leader Keir Starmer refused to rule out a new tax on wealth. 

Little better illustrates today’s political and cultural barriers to economic growth than these voguish proposals for a wealth tax. The suggestion of taxing the super-rich to address the government’s fiscal hole is another lily-livered evasion of the tough decisions required. It expresses the cultural and political elites’ prerogative that there is always some other group who can pay for social needs and for their own privileges.

Governments need to stop assuming there is always someone to pay for their spineless overspending. 

Read the full article here.

The dystopian truth about a universal basic income

philmullan Economic policy, Employment, state, technology, Welfarism

Proposals for a universal basic income (UBI) are rarely out of the news. UBI is regularly championed, but rarely criticised. If it’s true that it’s an idea whose time has come, as some suggest, we should be very worried indeed.

The basic idea of a UBI is that the state would make a regular guaranteed payment to every citizen, regardless of their means and employment status. It would be set at a level sufficient to cover the ‘basic’ necessities of life: food, shelter and clothing. Its advocates, from the left and from parts of the free-market right, claim that this would simplify the welfare system, tackle poverty and improve recipients’ mental health.

The enthusiasm with which UBI is now being advocated by certain sections of society tells us a lot about how these left-leaning think-tankers, academics, journalists and even some free-marketeers view work, individual autonomy and the potential of automation.

Read the full article here.