March 12, 2008
Put an end to these shabby annual party tricks
Alistair Darling, in a speech so thoroughly Brownite in style and delivery that I found myself looking for the Prime Minister’s lips moving, could hardly be blamed for conniving in that bizarre British institution, The Budget. While there is nothing wrong with an annual explanation to Parliament of the state of the nation’s finances, the idea that the our taxes should be reshuffled every year for political effect is pretty depressing – even if we in the media encourage it.
The modern budget has long resembled children’s party entertainment, with the Chancellor cast in the role of a clown scattering gum drops or a magician pulling rabbits out of hats. In this case, Mr Darling made a lacklustre conjuror and the sweeties were thin on the ground, but the country is none the worse for that.
A quick sampling of some of the proposals reveals how weak the tricks have become: fuel duty is to be raised more than expected, yet a previously-announced raise in the tax is to be postponed by six months; child benefit will be raised sooner than expected; a scarcely-credible carbon dioxide target for 2050, a date on which Mr Darling is unlikely to be in any state to be held accountable, may or may not be made less credible still; the government is to spend 33p per citizen per year to “build skills” in some way or another; a tax on moving house is to be fudged for people who don’t own the house in its entirety.
A kind observer might describe this as fluff. A fairer characterisation would be that the Chancellor is pressing barnacles onto the hull of the British economy: hard to remove, a modest obstacle to progress, and just plain ugly.
One or two of the proposals looked sensible. Some money towards trialling road pricing? Not before time.
An increase in the winter fuel payment for pensioners would make much more sense if combined with an end to the subsidy on domestic fuel the government insists on giving the rest of us, which was always an inept way to fight fuel poverty by discouraging the nation from putting in double glazing.
But the smoke and mirrors far outweighed the serious policy: we had a paean to the armed forces, bluster against energy companies and a threat to twist the arms of supermarkets, and – bizarrely – an announcement about biometric security measures at airports. Has fiscal policy really come to this?
The truth is that it was never sensible to expect important improvements to the nation’s fiscal system to be announced every March. Mr Darling did very little today; we should be thankful for small mercies.
FUEL SUBSIDIES AND HOUSING INSULATION:
While sharing your exasperation over budget antics, Mr Harford, I doubt if those who would otherwise freeze without heating fuel subsidies can afford–even with subsidies if less than 100%–to installl double-glazing.
The most destitute among us
1 microwave the water for their tea, to save on cooking fuel
2 warm themselves by drinking copious amounts of that increasingly-diluted tea
3 wear layers of sweaters and socks indoors
4 limit themselves to the one relatively-warm room of the house during the winter months
–they survive only through those subsidies and our charitable donations.
For those who can afford more, by all means, divert subsidies towards efficient housing insulation–even require them for all new construction.
Posted by: HKLivingston, 26, investment banker | March 12th, 2008 at 2:52 pm | Report this commentHK - read my post again and note my call for an increase in winter fuel payments. I do not call for a subsidy on double glazing.
Posted by: Tim Harford | March 12th, 2008 at 5:31 pm | Report this commentTo HKL: I’m from Czech Republic, where winters are harsh, there is no fuel subsidy and no double glazing subsidy and people are much poorer. Is it really surprising that everybody has his windows double-glazed?
Posted by: Jan | March 13th, 2008 at 4:23 am | Report this commentNot for me…
To JAN: That is indeed the difference between countries where winters are harsh, and those where people actually survive without efficient insulation–in relatively-poor Britain as it is in extremely-rich Japan.
It is not even limited to winters/insulation. Japan is almost proud in ceaselessly describing itself as ‘earthquake country’. Yet centuries after first realising it and after half a century of economic development, and despite much-flaunted ‘earthquake-resistance technology’ they persist on
1 cabinets which topple over
2 fences of piled-up concrete blocks
3 garden/temple ornaments and gravemarkers of piled-up stones
–which invariably kill whenever there is an earthquake.
I
Perhaps the cause lies in the deaths being insufficient in numbers
1 to prompt alteration of established practices
2 to justify the initial costs of the new system.
(A matter which The Undercover Economist is best suited to study.)
II
Nonetheless, it is feasible to require the new standards in new housing construction.
But much less so in existing houses owned by those who simply cannot afford the costs–even if it means them freezing every winter or risking death during every earthquake.
Posted by: HKLivingston, 26, investment banker | March 13th, 2008 at 6:43 am | Report this comment