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Dear Mr Osborne.
You are in a mess. The left attacks you for wicked cuts. Those with half a brain know that you are not cutting at all. Your budget this week is your last chance and so I offer you a radical set of suggestions to sort out Britain’s ills once and for all. And unlike anything from Vince Cable my ideas stack up.
Your three priorities are:
1. To slash the £100 billion plus budget deficit
2. To encourage those on welfare to take low paid jobs
3. To encourage employers in the private sector to hire aggressively.
As such my first two proposals will initially increase the deficit. To deal with point two you should, at once, declare that all annual incomes under £20,000 should be tax free. Thereafter you pay the standard rate (30%) up to £30,000 and then a higher rate of 50%. National Insurance is not a hypothecated tax and should therefore be scrapped and included in income tax – let us make the system simple and open. This would be tax cuts for all, a huge admin saving by abolishing NI and the tax cuts would be targeted at the lowest paid.
To tackle point three you should announce that employers NI should be phased out over five years in equal instalments. It is a tax on creating new jobs. In order to further encourage employers to hire you need to make it easier to fire and so I suggest that you at once abolish all employment legislation. Henceforth employers should be allowed to dismiss workers simply by paying statutory notice. The minimum wage must be abolished at once – the changes to the income tax system will mean that lower paid workers are far better off under your new system anyway.
There will be certain administrative savings but I accept that my proposal on employers NI will cost you £10 billion in year one rising to £50 billion in year five. I also accept that my changes to personal income tax/NI will cost you around £30 billion.
However, my proposals would also quickly see more people employed (and paying taxes), firms making greater profits and thus paying corporation tax and both firms and individuals having far greater disposable income, much of which would be spent on VATtable and excisable goods. As such I would anticipate that the net cost of these changes would be less than £20 billion in year one.
And so we move onto your deficit where we need to cut £120 billion. I do not think that this can all be achieved in year one but you need to reassure the markets that you are serious. The left hates you already so do not hold back. My initial check list is easy:
1. Scrap all international aid at once – saving £11 billion.
2. Privatise the BBC – saving £4 billion
3. Leave the EU – immediate budget saving £12 billion
4. Abolish border controls and legalise drugs (so getting rid of 80% of crime and allowing a halving of Police numbers) – saving £6-7 billion
incidentally drugs should be sold and taxed like cigarettes – this should increase tax receipts by c£4 billion.
5. Announce that as of tomorrow you can only claim income support (tax credits), jobseekers allowance and any other welfare payment if you can show that you have paid taxes for at least five years in the past six years or for more than half of your working life. All welfare payments should be frozen in absolute terms for five years. Announce an amnesty for all past benefit fraud but that as of June 1st anyone found guilty of any benefit fraud at all should receive a lifetime ban on receiving benefits. Savings £30 billion.
6. Announce that the retirement age will with immediate effect match life expectancy (84). Those under 84 already receiving the old age pension can keep it but there will be no new claims. The savings should be £2-3 million this year, double that next year and so on
7. End the loophole whereby divorced women do not count maintenance as income and so can claim tax credits as well however much they get in maintenance. Savings £1 billion.
8. Close down 1/3 of all universities – the ones we all know are joke unis. They are not self0funding as we all know that most students at these places will default on repaying loans. Saving not a lot now, but in the long term a lot.
9. Close the Department for arts, heritage, sports etc. Scrap all state subsidies for the arts (why subsidise the hobbies of the rich anyway?) and for sport (it is not as if our kids are getting any thinner?). Saving £1 billion.
10. Announce that all local authority homes left unoccupied for more than two months (there are c500, 000 of them) will be sold off at once by auction. This will eliminate any shortage of housing, generate windfall revenues which can slash the deficit while the pension’s measures work through the system and offer low cost housing for first time buyers. This will allow the Government to scarp all its first time buyer schemes.
11. Scrap all climate change initiatives. The world is getting colder. This is bogus science you cannot afford. Close the Government departments responsible for this farce. Saving £2 billion.
12. Merge Local authorities so cutting the number of councils (and councillors) by three quarters. Give those that remain a strict remit so they can only provide core services (no more 72 officials employed by Islington council with the word climate change in their job title). Savings £3 billion.
13. Lead by example: savings will be minimal but show that you believe in small Government by reducing the number of MPs (all with paid staffers etc.) to 250. Savings peanuts but show you mean business.
How much have we saved so far? £78 billion. We are almost two thirds of the way to fiscal prudence. The markets will love you. The poor who wish to work and indeed all workers will love you as they get to keep more of the money they actually earn. Deluded lefties will hate you but they hate you already.
Over the summer we can start to look at the world’s third largest employer (the NHS) and our failing schools for more cuts. I hope that by then we will have pulled out of our illegal occupation of Iraq, Afghanistan and not contemplated any fresh folly in Syria and we might thus look to trim a bit from defence spending. That should mean that by the time of the Autumn statement you are in a position to close the deficit altogether.
You can be a hero. The man who delivered a balanced budget, a dynamic growing economy where the private sector was freed up to create real jobs and the man who freed Britain from the yolk of the EU. Go on George…be brave. Frankly you have nothing to lose.
Best wishes
Tom Winnifrith
PS. George: if you want any further free hints on economics, shares, investment matters, the evils of the EU, the folly of global warming or the threat that your Government poses on a range of civil liberties issues you can follow me on twitter @tomwinnifrith or at my website www.TomWinnifrith.com
Tom. We should form a political Party.