You would think that putting someone in charge of the country’s economy, they would be a financial genius with qualifications on economics literally bursting out of their ears. Unfortunately, this is not the case with George Osborne; his best educational achievement is a BA in modern history - hardly of help when juggling the biggest bank account in the country. Perhaps this is the problem, George Osborne is NOT a 'Wonga Wizard' of Merlinesque proportions he is more like a poor quality sideshow act that uses sleight of hand to pick your pocket.
Image credit: M Holland under licence.
The economy needs to grow, there is no argument on this - growth expands businesses small and large creating jobs, reducing unemployment (duh, don't need to be an economist to figure that one out!) and generally improving the country’s economic outlook as a whole. Yet George Osborne is doing nothing to stimulate growth, this simple common sense approach has eluded the man in charge of the purse strings. There is only one way to increase growth, people like you and me, ordinary Joe public, need to spend money. How has the Chancellor decided this can be achieved? - By reducing the spending power of everyone on low to middle incomes, i.e., the majority of people in this country. The result is that businesses are contracting or going bankrupt, increasing unemployment at alarming rates, turning high streets into barren wastelands where banks and budget shops become the only ones able to sustain a presence.
I'm no economist, I wouldn't even describe myself as being particularly mathematically gifted, but even I can see how to achieve growth. Cut VAT and reduce the burden of revenue achieved from fuel duty. These two things affect people on low to middle incomes more than those on high incomes, again, you don't have to be a mathematical savant to figure it out - a higher proportion of a low earners income is taken through indirect taxation like VAT than from higher earners. Now, Georgie Porgie would argue that this will result in a reduction of revenue for the Government, but I argue that this would be offset by higher spending (maintaining the income levels from VAT), encouraging businesses to expand and therefore increasing the income from direct taxation (what they steal from your wage packet) as jobs are created and reducing the benefits bill because all those new workers will no longer be in receipt of unemployment payments. Even local authorities will benefit from this course of action as housing and council tax benefits bills will be reduced.
Again, with a reduction in fuel duty, the Chancellor will argue that it will result in a reduction of overall revenue for the Government. But would it? I cannot speak for everyone, but I do know that I would increase the amount of fuel I would use if it cost less. At the moment I just use my car for necessities, not for pleasure. Probably the same for most people on tight household budgets. A reduction would filter down through everything though, deliveries to retailers would be cheaper, ergo, food would be cheaper, clothes would be cheaper, even household utilities would be cheaper (provided the privatised utility companies didn't look upon this as a windfall income). More disposable income means more spending on things that are not needed just to exist - hey, look, the economy has started a recovery and the Government have maintained their income levels!
For all their education, the Government are still incredibly stupid, they lack common sense. Common sense says that if people have more money to spend, that is exactly what they will do, spend! Common sense says that if they spend more, businesses will earn more and need new staff to cover their increased production. Common sense says that if the unemployed become employed, the benefits bill will be reduced. Common sense says that common sense has eluded the historian in charge of the UK finances!
