Is Gordon Brown the most irresponsible Chancellor the UK has ever had? So asks Michael Becket, author of Starting Your Own Business, in this month’s issue of Director magazine, published by the Institute of Directors for its members – sorry, but there is no online version. According to Becket:
Despite promising not to raise income tax, Brown has done just that, by not increasing allowances in line with earnings, by raising [National Insurance] by 10 per cent, and by other stealthy changes…
Having enticed small businesses to incorporate by tax incentives, Brown has now closed the trap by imposing a 19 per cent tax on their dividends. Failing to reinvest profits instead of paying themselves was one reason given to directors. But how can the owner of a company with a £10,000 profit afford to eat and invest as well?
People are saving less and putting aside less money for their old age. By stopping pension funds from reclaiming tax on dividends, Brown extracted £5bn a year from the pensions industry. A typical 30-year-old now needs to put an extra £200 a year aside for the whole of his working life to offset that one move. Peps and Tessas were taxed and replaced with Isas, but the amount eligible for tax-free savings has been steadily whittled away…
What makes Brown’s policies appear so irresponsible is that they are the opposite of what the country desperately needs. This grab-what-you-can attitude has many consequences, but few discuss the indirect effect on business.
Fewer savers and smaller pension funds mean less investment for industry… It could also mean less cash for buying shares. It is also possible that it will become more difficult to raise money, especially since business angels will also be taxed out of the market.
A more obvious consequence is the burden to the taxpayer of an increasingly aged population – particularly one that has not been able to save sufficiently for retirement. We are constantly being warned about the “demographic time bomb” when the baby boomers become pensioners in the next few years, with fewer young people to support them. If these people are forced to depend on public benefit, requiring a wide range of help from pensions to health care, the level of taxes on individuals and businesses will rise to an intolerable level.
Yet there seems no alternative prospect. Such policies could amount, in the long term, to our children labouring without return in an impoverished business environment. Pensioners will live on a pittance in ill-health as their pensions get eroded and the NHS turns from a sick joke to full-blown disaster.
Well, that is all very cheering for a British taxpayer to read. I take no convincing on the points that the government is bang out of order in what it takes from us, that the state is forcing people to rely on public benefit, and that the NHS sucks. What I want to know is whether Michael Becket is right: Is Gordon Brown the most irresponsible Chancellor this country has ever had?
No, as he gave the Bank of England independence.
The most irresponsible were a triumvirate: George Grenville, Charles Townshend and Lord North who all incompetently contributed to the loss of our empire in North America
Brown wants us to work all the hours possible, up to the day we die & hand everything to him with a big smile on our mugs.
I’m not sure whether Brown is the most irresponsible Chancellor we’ve had. But he is, beyond question, the most devious – to (what should be) a criminal degree.
It takes weeks following one of his budgets for financial experts to work out the precise implications of it and, without exception, each budget turns out to have promised one thing while delivering another.
Brown is a shabby crook. Devious, manipulative and with a reputation built on the efforts of others and the the sheer luck of world events over which he pretends to have any influence.
When Bliar is gone, Brown will be exposed for the devious fraud that he is.
Not irresponsible, guilty. He knows exactly what he’s doing.
He’s also, notwithstanding the nominal independence of the Bank of England–who sets the criteria for the MPC to make its decisions?–the most powerful Chancellor we’ve ever had, exercising as he does direct control over the most significant spending depertments where he hasn’t actually annexed them to the Treasury.
What G Cooper said. The prune-faced prudence flasher is a nasty piece of work. Were ever two more odious, more disreputable people in charge of a nominally free country?
Brown, bad? Noooo!!
Kenneth Clarke, who rattled up the doubling of the national debt within five years (of peacetime), complained in a private conversation with a Labour MP in 1999 that the Labour government had stuck to his spending plans, when he himself had never had any intention of doing so himself.
Also, irresponsibile would have to be a chancellor who triggered a recession, or caused a flight of capital.
No: Brown was brought in to keep the more absurd Labour plans under check for the first two years, at which point the Tories by their pathetic uselessness persuaded the PM and Brown that it was safe to tax and spend, so here we are.
Arguably, the worst decision of any Chancellor in my adult lifetime was Nigel Lawson’s fiddling with mortgage tax relief in the late 1980s which contributed to a huge property boom and bust. Yet in many other respectes he was the best.
Erm, in which respects?
(sorry for the appalling ERM pun there)
I think that the above description of the damage done by ‘Nigel Lawson’s fiddling with with mortgage tax relief in the late 1980s’ is over the top. Lawson’s decision in the 1988 budget tie the allocation of tax relief to the property rather than to the tax payer was his only action on this relief. The last rise in the allowance ceiling (from 25k to 30k) was in Geoffrey Howe’s 1983 (pre-election) budget. The restriction of the relief to the standard rate 25% (in place of top rate 40%) of income tax did not come until Lamont’s first budget in 1991. The reason that Lawson was able to make this change in the face of Mrs Thatcher’s dedication to preserving every last pound of benefit to the home-buyer was the need to introduce equitable treatment of married women by the tax system. Lawson claims that he attempted to introduce the mortgage tax relief change in advance of the rest of the package in ealier years before the housing boom had built up steam. In addition he attributes the possibility of the last minute dash to beat the change to the rules between May 1988 and Aug 1988 (about which he had cautioned) to the Inland Revenue erroneously advising him that the lending institutions would be unable to reprogram their computer systems any more quickly. This is all discussed in Lawson’s memoirs The View From Number 11.
I am flattered so many people at least thought about my article in the Director. But some have they missed the point. Lots of chancellors have been stupid, feckless and incompetent, Brown’s disatrous actions however will not be felt for decades until the result of discouraging saving and expropriating pension funds is felt. The people then in work and paying tax will be lumbered with a massive social cost of supporting the impoverished old.
Thanks again for your interest. If you like this sort of stuff and have an interest in the economy, espcially as it affects small business, keep reading my column.
I do not accept any of this defence of Lawson especially if the sourse material was his memoirs. I remember working in the city at the time and could not believe the head of steam the chancellor was stoking in the economy. House prices had already rocketed beforte he cut income tax to 40% (initself not a bad thing but in the circumstances of the boom foolish) then announcing the end of Miras but with a delay at the same time as interest were too low as a result of an attempt to get us into the ERM by the backdoor was suicide.
I remember telling my colleagues at the time but none vared as they were more interested in not paying 65% or whatever it was tax on their bonuses.
It only took the actions of the former |Chief Sec to the Treasury (Major) o seal the nations fate by joining the euro (egged on buy Labour the Lib Dems and sundry idiots in the media etc) for the nation’s fate to be sealed.
Lawson was as guilty as Lamont. Theybare the main reason the Tories are still in the doldrums. It would make a perfect “a” or first year economic essay . Discuss.
I do not accept any of this defence of Lawson especially if the source material was his memoirs.
I remember working in the city at the time and could not believe the head of steam the chancellor was stoking in the economy. House prices had already rocketed before he cut income tax to 40% (in itself not a bad thing but in the circumstances of the boom foolish) then announcing the end of Miras but with a delay at the same time as interest rates were too low as a result of an attempt to get us into the ERM by the backdoor was suicide.
I remember telling my colleagues at the time but none cared as they were more interested in not paying 65% or whatever it was tax on their bonuses.
It only took the actions of the former Chief Sec to the Treasury (Major) to seal the nation’s fate by joining the erm (egged on buy Labour the Lib Dems and sundry idiots in the media etc) for the nation’s fate to be sealed.
Lawson was as guilty as Lamont. They bear the responsibility for the Tories still being in the doldrums. It would make a perfect “a” level or first year economics essay . Discuss.
I do not accept any of this defence of Lawson especially if the source material was his memoirs.
I remember working in the city at the time and could not believe the head of steam the chancellor was stoking in the economy. House prices had already rocketed before he cut income tax to 40% (in itself not a bad thing but in the circumstances of the boom foolish) then announcing the end of Miras but with a delay at the same time as interest rates were too low as a result of an attempt to get us into the ERM by the backdoor was suicide.
I remember telling my colleagues at the time but none cared as they were more interested in not paying 65% or whatever it was tax on their bonuses.
It only took the actions of the former Chief Sec to the Treasury (Major) to seal the nation’s fate by joining the erm (egged on buy Labour the Lib Dems and sundry idiots in the media etc) for the nation’s fate to be sealed.
Lawson was as guilty as Lamont. They bear the responsibility for the Tories still being in the doldrums. It would make a perfect “a” level or first year economics essay . Discuss.
DIDN’T HE DO WELL?
I won’t hear a word said against the former chancellor, Lawson.
If it hadn’t been for him, cooking and housekeeping generally wouldn’t be half as exciting. For of course it was he ~ and only he ~ who sired the nation’s favourite superwoman: Nigella.
We’ve yet to see how Brown’s spawn turns out.
Perhaps my own offspring, Grenville Junior, who you can see at (Link) will continue with this and give an update in about 2025. Stay tuned.