National
government is awash with our taxes.
Now the Chancellor is getting an extra jackpot of
over £22 billion, through an auction of mobile
phone licences. Even on pessimistic assumptions,
the public purse will be healthy for the next
five years - at least.
So, what should we do with these riches?
There's a lot that needs extra cash spent. A
better NHS. More police. Extra cash for schools.
A decent increase in the pension, instead of the
miserly 75p a week. We could all add many things.
Government could use money to cut taxes -
especially unfair ones like the council tax. Or
it could pay back more national debt.
In fact, the Chancellor has so much money he
could do ALL the above - and
a lot more. But he won't. In fact he can't. Not
all at the same time. The unusual problem
Government has is that it cannot spend all its
available money.
If it did, with unemployment relatively low,
inflation would rise, leading to higher interest
rates. The pound would rise, to become even more
uncompetitive. That would cripple industry and
cause huge job losses. Look what's already
happening at Rover and Ford. |
Extra
spending and/or tax cuts must be well-planned -
carefully to prevent damage to the economy.
So, despite the Treasury's overflowing coffers,
politicians still face tough choices. Government
ministers must decide their policies, and
opposition parties must say where their ideas
differ. And the public can then choose.
During debates on this year's Finance Bill in
Parliament, for example, Conservatives said they
would use spare cash to cut taxes on tobacco and
alcohol, to try to tackle smuggling.
For the Liberal Democrats, I disagreed as I
believe it's wrong to give into law breakers. We
can tackle smuggling more cheaply through
strengthening Customs with more staff and
technology such as scanners. That then leaves
cash for things like increasing pensions and more
police officers than Labour have provided.
But what are your spending priorities? Write to
me to let me know, or email me via
my website. We must not squander our strong
financial position, and that must mean listening
to the taxpayer. |
