Thursday 9 March 2017

Media budget reaction shows why paradigm has shifted to an unstable political scene

I went to buy a newspaper today, probably because like most people I wanted to read about how Barcelona had done it!

In fact, what struck me was the horror show of a reaction to the budget. I watched the budget yesterday, nothing was said. The Government was talking about small £16 million improvements to roads and such like. No mention of £55 billion on HS2. It was a non-budget.

The one small thing was  1% change in NIC's for the self-employed - this would only impact to the tune of around £160 a year to a relatively small number of people. This is not 2p on income tax for all.

Yet the papers behave (because they are stuffed full of "personal service company types") as if the world has ended. Not only that but Labour rail constantly against the current do-nothing Government as if they are literally murdering babies and are the most evil Government of all time.

Truly, we live in a time of mass hysteria - there must be good reasons as to why, but perhaps that will take longer to figure out than a blog post.

In this environment though I see clearly why Trump and Farage are successful. Firstly they play the exaggeration game which helps fill the medias' need for sensationalism, then they top it off with very radical change.

Given the reaction to a non-budget, I can see why there is a need to go for radical change; minor steady-as-she-goes policy is shouted down as if it is a declaration of war. So, instead, you may as well go the whole hog on immigration bans or whatever floats your boat. The mass hysteria generated can only reach a pitch of 100% - so go for it, do crazy things, it can't get any worse.

I am not yet convinced that this will improve matters in the country as a whole, as it may result in much more extreme governments going forward. Perhaps this is a reaction to all Governments being  more or less the same in most areas during my adult life; it could come with a high price if we end up with McIRA as Prime Minister!


Bill Quango MP said...

I am reminded of Gordon Brown's 10p tax rate abolition.
At the time journalists {not us here who spotted it as he said it}
hailed his magic 2p off income tax as a genius stroke. Wrong footing the hapless Tories yet again.

When the increase for the lowest paid rolled around the following year it was portrayed as if Brown had taxed them 100% and kicked them out of their house too.

It was a small rise. A threshold removed. It dogged Brown for the next two years trying to explain it. Then trying to get everyone to forget about it. Then trying to find some daft, expensive way of pretending he'd given it back.

Gary said...

Hammond may as well be hung for a sheep as a lamb. Do something important.

andrew said...

Journalists are no better than pols.

Why is this surprising?

Also a case of nuclear bike sheds

Easier to talk about you and your mates paying an extra few hundred quid in taxes than a persistant 60bn overspend.

The lesson is to give them something to talk about

On drafting a long doc for my (ex) boss I used to put in a deliberate mistake about pg 5.
I would then get abuse for being thick and he never really looked past that point.

Blue Eyes said...

CU raises a very important issue. The main problem is that real journalism cannot exist any more. The only way to make money in "news" is to run clickbait.

As consumers we will need to re-learn that important skill of tuning out the BS.

Scan said...

What we need is freedom from government, along the lines of freedom from religion. Not total freedom from government - I'm not advocating no government, or anarchy - government has a role to play in keeping order and protecting the country etc. And there'll be huge disagreement where the lines are.

However, if individuals want to group with like-minded people to do something, then good luck to them. If large groups of people want to group together, good luck to them too. If people see the benefits then maybe more people will join them. But only so long as it doesn't negatively impact on people who don't want to be involved. The freedom to "do" or "have" must also include the freedom "not to do" or "not to have".

Anonymous said...

"However, if individuals want to group with like-minded people to do something, then good luck to them. If large groups of people want to group together, good luck to them too."

I think the right to free association went out the window with the Equalities Act 2010.

Anonymous said...

As I said in the previous post, it's less the amount but, along with the IR35 changes, the message.

You'll find an awful lot of the UK PSC's are IT contractors, and HMRC has had it in for us since Clunking Gordon dreamt up the idea of IR35. HMRC has lost most of the cases, but still insists most of us are disguised employees. We're not.

The new (unfinished) test intimates that you're okay if you use your own equipment or are able to subcontract/replace yourself without the client interviewing. For now. HMRC is reserving the right to move the goalposts as and when it feels it's losing court cases. Nothing quite so good for business as banana republic levels of consistency.

When it comes to IT, which underpins pretty much most of the UK economy these days, we've got - well, okay, maybe soon 'had' - an enviably flexible workforce. Have a 12 month project? Don't want to hire more staff, what with sick days, holiday pay, employer NI contributions, pension contributions, but need more manpower? Bring in the contractor. They do their work and sod off. If they're crap, you can let them go easily enough. If they're good, you can incentivise them to hang around a bit longer.

We're poly-filler for an IT skills gap neither the public, nor private, sector have managed to bridge.

Now the government has gone to war on us at the most bloody stupid point. The MOD has had a massive brain drain, something it's starting to worry about. It'll really worry when projects start overrunning and overcosting more than usual.

The NHS already has some projects that have gone from 'late' to 'oh shit'

Oh, and central government has just advised everyone to go PAYE and up their rates by 20%. Austerity and all that.

Meanwhile the likes of Accenture and Crapita are circling like vultures, sensing a good feed coming their way at the taxpayers expense. The 200 - 500 a day range will shift up to them charging a good 1k+ a day.

This budgets message was "we hate a free-range workforce. Back to the cages!" and "We still don't understand that generating X million a year from a mechanism that will cost more than X million a year isn't a net gain"

Blue Eyes said...

The BBC has a good analysis. The numbers affected and the money involved per person are quite small. The main NI threshold of course has an upper limit.

I sympathise with people affected as nobody likes a tax rise (as my recent post attests!) but this is not going to turn the UK from being a flexible labour market to a rigid one. The brouhaha seems massively overblown as CU points out.

And I keep saying it but the Chancellor has announced a proper look into it, which might make the whole thing work better.

K said...

Isn't it just plugging the gap left by abolishing class 4 NIC? So in the end virtually no difference but at least it's a simplification.

K said...

I mean abolishing class 2 obviously.

Blue Eyes said...

K, yes. As mentioned, the Beeb has a comprehensive explainer. The reaction from "the right" is beyond absurd.

Blue Eyes said...

Tim Stanley of the Clickbaitgraph says Hammond is another Lamont. I presume he means the Lamont who took us out of the ERM, killing off Euro membership and setting the scene for the longest boom in history? Awful.

CityUnslicker said...

Anon - you post makes no sense. this is going to cost you £160 a year or so and you are making out like it is war on self-employed.

Over the last 7 years I have lost, child benefit, 8% tax rise, nic rise, pension free allowance cuts, increase in income taxes, stealth rises of tax bands...the list is massive. I pay about 15% more tax every month than I used to.

I don't like it, I don't want it - but even I can see £60 billion is a hole needing to be filled.

Your post is classic over-blown ranting.

Anonymous said...

@CU - again, it's the message it sends. The NI is small beans, but sends a message that the smaller business is to be screwed.

The IR35 changes - which will represent a 20-40% pay cut to many - sends the message that a flexible workforce is unwelcome.

Smaller businesses already operate on an unlevel playing field. There's no argument about tackling the deficit, however twatting a source of growth with the tax hammer hardly seems sane. We should be encouraging small businesses.

And quite how encouraging current payers of corp tax to shut up shop or leave for other tax regimes, will cut the deficit I'm keen to see.