Monday, 2 June 2008

Labour's gerrymandering exposes tax flaws

Both the key story and the leader in the Telegraph this morning focus on Labour's gerrymandering in favour of traditional Labour voting areas. This will come as no surprise to anyone; we all know not only revenue expenditure but capital investment in new hospitals, schools and other infrastructure has been skewed to Labour areas. The Comrades have convincingly demonstrated their propensity to corruption in other areas of public life - why should we expect any fair play from them in their administration of the public purse?

There will be those like the Evening Standard who put forward the argument that London and the south-east pay £20bn a year or so more in taxes than they get back in public services, and to the extent that Labour is short-changing the Conservative home counties to bolster its vote in the northern metropolitans this is patently wrong. However, there remains the important principal that the costs of public goods that are nationally 'consumed' - defence, a universal postal service and the like, should not be calculated locally or regionally.

There is a flaw at the heart of Labour's crooked accounting rooted in their failure to recognise that welfare causes poverty. Every tortuous rationale that Labour use to skew public spending is based on targeting 'poverty' by increasing welfarism and the presence of the client State, thus creating a negative feedback loop. The more money they pour in, the worse things get. Labour's myopic maladministration is actually hurting the northern metropolitans much more than the home counties.

This will also bring to the fore again the issues of local versus national taxation, and taxation based on income, property or consumption. Indeed, these arguments will be at the heart of the appraisal of options for a real and meaningful rebalancing of responsibility from Leviathan to Local.

Currently around 73% of the overall tax take is based on income or property, and only some 27% on consumption. Both are far too high in real terms. The State will always be the least efficient actor in improving people's lives, creating prosperity and nurturing self-reliant communities and a meritocratic society. This inequality at the heart of Labour's efforts at national social engineering will only increase the pressures for a more local determination of both tax and spend.


Anonymous said...

>there remains the important principal<

You mean 'principle'. Principal is the adjectival form (i.e., "the principal reason"); principle is the noun (i.e., "an important principle").

Raedwald said...

Ah, thank you for that.

i.e stands for id est, which means 'that is'. It doesn't take a comma.

Anonymous said...

Actually, it is perfectly acceptable - and arguably more grammatically correct - to place a comma after i.e. since it introduces a new clause.

Anonymous said...