Bank Bail-out Mark II

The announcement this morning about the further bail-out of the banks has left me thinking about the political implications of this and that how the ordinary rules of politics seem to have been suspended in this area.

Over the last few years, whenever any of the opposition parties came up with any idea that would reduce tax, in any area, the government would instantly go away, run through some figures on the back of a fag-packet that made the worst possible case for where the "public service cuts" they deemed necessary for the tax reduction.

Now, this was often in the order of a few hundred million pounds or a few billion which is obviously a lot of money but compared to the amount of money that is now being thrown at the banks and at other things like the VAT cut etc. it seems like piffling amounts.

The thing I don't understand is that the government still seems to be able to get away with this sort of behaviour and still claims that opposition proposals are "uncosted" and align them directly with how many schools or hospitals will "have to close". How can this be when the sort of money they are now throwing around is equivalent to more than the entire budget of the NHS!?

I understand that we are in difficult times and the bank recapitalisation is probably necessary but it is sheer hypocrisy for the government to then carry on with its tired old "cuts" claims when they are simultaneously doing this.

At a time when households and businesses are having to tighten their belts it would be perverse if government (both national and local) did not also do their bit. The government cannot credibly claim that any reduction in taxes will automatically lead to the closure of schools and hospitals etc. The public sector cannot be completely insulated from the downturn and they must do their bit.

Cameron's Tax Cut - Good Move

Well, I have to say that David Cameron's latest idea about abolishing tax on savings for basic rate tax payers seems to me to be a very good idea.

In the last few weeks as base interest rates have plummeted and I have seen the rates on mine and my wife's various savings accounts commensurately reduce I have started to wonder if one of the parties would advocate this.

The response of the Labour Party has been unsurprisingly to scream about how this is uncosted and I heard Yvette Cooper describe it as "economic madness". I don't know how she can have the brass neck to describe it as uncosted (it will cost about £2.4 billion by the way) when they are borrowing £118 billion next year. Also, they just pissed away £12.5 billion on the totally ineffectual VAT rate cut (see here for my previous thoughts on this before it was even announced which I fear are proving correct). Absolute hypocrisy.

Iain Dale also makes a good point here that Cameron is starting to turn the "do nothing" charge back at the government. It really seems to me that the government has got itself into a position now where unless you agree with them entirely and without question then they just go for your throat. They have no self confidence and have to shout everyone else down (using the bully pulpit of office and incumbency) and just repeat the same nonsense over and over again. They will come to regret this when they are finally chucked out of office as that is how they will be remembered by the electorate for many years to come.