BURNING OUR MONEY

Doorstep politics eats time

The trouble with getting involved is that it takes up so much time. Since I started doorstep canvassing for the Old Firm, it's seriously eaten into my blogging activities.

It's not just the doorsteps (all that walking has given me thighs like tree trunks), but the town centre leafleting ("Get out of my way, you tosser"), the envelope stuffing (I've definitely got Stuffers' Wrist), and...well, just dealing with the pesky public (I mean, I thought I was getting involved in politics, but all these people keep getting in the way).

I've also found myself drafting responses to the avalanche of letters and phone calls which come in every day from the punters. Absolutely fascinating stuff- problems that never seem to make the news, questions about Tory policy, suggestions for new policies, advice on what we should insert into our own anatomies- it's all there. And after the Election, I'm going to blog some of it.

In terms of results, there's a good feeling that we're going to win the constituency, but nobody actually wants to say it, just in case. And nationally, I think we're all resigned to another five years of Socialism.

Still, as Matthew Parris first pointed out, this is probably not an election to win. It's just such a shame that that we all have to suffer such horrific damage before we can at last kick them out for another twenty years.

Protect and survive

With two weeks to go, the doorstep vibe agrees with the bookies. Labour to win with a 70 seat majority.

Hopefully, between now and 5 May this can be whittled down to a Callaghan-style LibLab gridlock. But the punters aren't convinced.

So we need to batten down the hatches for a bumpy few years.

First of course, taxes will ramp up again. The IMF agrees with the Wat Tyler envelope- £12 billion for starters. Say, another 1.5p on uncapped NI contributions for employers and employees. The archetypal tax on jobs.

But it won't be enough, and government borrowing will bust right through that old golden rule, pushing up borrowing costs for everyone. The virtuous public finance circle of Gordo's early years will go into reverse as tax revenues sag, and debt interest payments notch up.

Current housing market weakness will intensify, and negative equity will return to stalk the land. Consumers will retrench by hiding under the stairs, and refusing to answer calls from the bank's Indian call centre. Rivers of blood will flow down the High Street, with the CEOs of M&S, Sainsburys, Boots, Woolies, Smudger Smiths etc etc all found hanging from lamp posts.

Emergency spending cuts will follow, although obviously they won't be called that.

Unemployment will rise as public sector jobs are frozen and more private sector jobs head East. The economic engines splutter and flame out, and we plunge down towards the icy grey waters of the North Atlantic...

What to do?

Now.

Not when it's too late.

First, sell the house, and repay all debts.

Second, ship all remaining assets into an offshore account.

Third, move into the cash economy.

Fourth, dig up the lawn and plant subsistence crops. Or perhaps specialist cash crops such as opium.

Fifth, arm yourself.

You will have to last out until 2010 at the earliest.

Local Income Tax grab

Voters in the Lib Dems' target seats across the Southeast should familarise themselves with the proposed Local Income Tax (LIT), and how it would impact them.

Vince Cable and others keep telling us that LIT would be 'fairer' than the Council Tax, gainers would outnumber losers, and the average family would be better off. But that is the national picture. In London and the Southeast the outcome would be very different.

Nationally, the IFS estimates that 49 per cent of families would gain, 27 per cent would lose, and 24 per cent would remain broadly unchanged. As you might expect, most of the losers are in the top quartile of the income distribution. But not all of them. Surprisingly, given all that pious stuff about 'fairness', 1.5 million of the loser families are on incomes below the median. They would lose because they currently receive Council Tax benefit, which the Lib Dems would abolish.

Overall, the IFS estimates a small average net gain of £1.37 per week. Although Cable likes to crow about this, it's nothing to do with the magic of LIT: it arises solely because the Lib Dems would contribute an additional £2.3 billion from general taxation to soften the switch to LIT, thus ensuring gainers outnumber losers. £2.3 billion amounts to half the additional revenue they reckon would flow from their new 50 per cent top income tax rate. So while presenting the net gain as an attraction of LIT, all they're actually doing is to reduce one tax by increasing another. Bribing us with our own money to accept their pet scheme.

And these are national figures. The big problem for voters in the Southeast is that many of their incomes are significantly above the national average, so many more than 27 per cent would lose out. According to ONS's Regional Trends, average household income in London and the Southeast is about 30 per cent higher than the national average (and before anyone says they don't care about rich bastards in the stockbroker belt, remember that the cost of living is also much higher- housing costs are about 40 per cent above the national average).

Take Guildford. In 2001, the Lib Dems ousted the Tory MP for the first time since 1428, and they are doing their damnedest to retain the seat.

Yet the average household income in Guildford is more than ten grand above the national average- a gap of 35 per cent which puts the average for Guildford in the top quartile nationally (eg see here).

Now, the IFS and others reckon the LIT would need to be charged at an average rate of about 3.75 per cent. So with their higher incomes, the average household in Guildford would be paying about £400 pa more than the national average. And more than their £1300 average Council Tax, which is in itself way above the national average.

Of course, in theory, the point of LIT is that it's a local tax, so given their higher tax base, the local authorities in Guildford would have scope to set a lower rate. Hmm...that hasn't worked with Council Tax, and it's unlikely with LIT. Central government controls the big purse strings, and routinely 'equalises' tax resources between authorities by allocating rate support grant away from affluent areas like Guildford. There's no reason to think a Lib Dem government operating LIT would be any different.

No, whatever the national picture may be, that average hard-working family in Guildford would be worse off under LIT. As would the average family in Maidenhead, Newbury, Reading, and a host of other Tory/Lib Dem marginals across the Southeast.

There is no doubt.

It's just that somehow we have to get it across without making voters nod off.

Labour's election fraud

Following Labour's refusal to put up anyone to discuss their jaw-dropping behaviour in Birmingham, I looked forward to our msm political reporters having a real go at their first news conference. Just like they did with Michael Howard after he sacked Flight.

I'm still waiting.

Tony wasn't asked about it either on the sofa this morning, or during his love-in with Gordo this pm.

Compare that to today's World At One. They continued to fan the embers of the Flight affair, pointing out that one of the possible replacement candidates is Nick Herbert, the head of Reform. Apparently- shock horror- he believes taxes should be cut. WATO spent a third of their programme sucking their teeth over it.

Almost as good a use of taxpayers' money as Newsnight hiring a helicopter to ferry around the self-satisfied Michael Crick during the election campaign. Allowing him to make post-modernist jokes about the size of his chopper.

Back from sick leave

Back from unscheduled sick leave straight into the election.

Depressingly, the Howard Flight affair underlines just how far away we are from being given an open and proper choice on tax and spend.

I must say I'd thought when the Tories said 'are you thinking what we're thinking?' they meant what Flight implied- ie don't worry, once we're elected, we'll have a proper go at the whole shooting match.

But it seems I was wrong, and the Tories have now gone and painted themselves in.

You'd think- well, I'd think- enough people would want lower taxes to make small government a saleable proposition.

True, history is not encouraging.

For example, I've been leafing through British Political Opinion, a collection of Gallup Polls between 1937 and 2000. And it turns out tax has rarely featured particularly highly among the hot issues.

Even when Thatcher was elected in 1979, people who thought public services should be extended even at the cost of higher taxes, outnumbered those that wanted lower taxes by two to one. By 1997 the ratio was ten to one.

Of course, many people really mean someone else's taxes should be increased. Not theirs. And that highly visible taxes like the Council Tax are disproportionately unpopular. But by and large, tax has not been a knockout issue.

Yet surely things are changing. Those 66 stealth taxes and the almost universal agreement that Labour will hike taxes again after the election does seem to be having some effect of opinion.

YouGov's Budget poll showed that those who want more tax and spend still outnumber tax cutters, but the margin is now quite narrow (49 per cent against 41 per cent).

Such a shame no party has the balls to pick that up.