Well I have argued that there needs to be a combination of monetary and fiscal cuts in order that the economy can receive a well needed stimulus, although I am not naive enough to believe that it will stave off a recession. This country is already in a recession, even if the official measures used to determine a “real” recession have not yet been met, all we can do is try to lessen the impact on people, jobs and business.

Gordon Brown has indicated over the weekend that he believes fiscal policy should include tax cuts and rumours abound as to the extent of such cuts, with estimates of £480 per person through to an annual estimate of £15bn in tax cuts. Whatever the case, there are two things which I am wary of. The first, that Gordon Brown has a habit of double counting and this is no time for a sales pitch. The economy needs a real injection of cash and the people of this country need to know that they have a little more money in their pockets, no sales pitch is going to change that, so Gordon Brown, beware of New Labour spin. The second is the form that tax cuts will take.

Some “experts”  have suggested a temporary cut in VAT. What are they smoking? Lets take a look at that proposal shall we? There is no VAT on food, council rates, children’s clothes etc., what many will call essential items. Where VAT is charged, how can we be certain that retailers, keen to impress their shareholders and hold onto their bonuses, will not take the opportunity to increase their margins? Thereby minimising the affect of any price reduction which ought to be brought about by a fall in VAT to the proposed 12.5%. Also, there is the cost to business, especially small business, they are the organisations and people that will have to deal with the major changes to their business that would be brought about as a consequence of a short-term change in VAT. Are these people really advising the government? I hope Gordon Brown is not listening, fortunately, not one of his strong points.

What we need is a simple, clear cut, obvious reduction is direct taxation. It must be one that is both tangible and visible, no messing around withallowances, tax credits and bandings. Instead, there should be a significant reduction in direct taxation and I have suggested this should be a reduction in the bottom rate of tax from 20% to 15 %, with all other banding’s remaining static, so the full effect benefits everyone, in a way that cannot be fiddled. Fiddling, with one or 2% will make little or no difference to the man on the street. There is no point in targeting cuts to the poorest sections of the community, because,put simply, everyone is affected, especially so called “middle England”, that has funded virtually every one of New Labour’s ‘feel good’ initiatives over the past 11 years, through proportionately higher taxes.

I doubt that it will be possible to fully-fund such tax cuts, which I think, at least for the time being, should be limited for a period of 3 years, to provide the personal reassurance that most people seek in their lives. However, in these uncertain times, I go against my instincts in terms of government borrowing if required to as a result of a ‘funding gap.  I would insist, however, that some funding is gained through cuts in non-essential government and believe me there is a great deal of that. For example, the Big Brother Britain database estimated at a cost of £12bn, should be cancelled altogether, the NHS database, estimated to cost in the region of £32bn, should be shelved in the short-term and re-considered in the medium term, based on a genuine cost versus return basis. Other database systems, that this government has so badly commissioned, budgeted for and managed should also be shelved until such time as the economy recovers, this would include everything related to ID cards. The cost of being part of the European Union is rising year on year, our ministers need to ensure that the European Parliament also looks at their costs in these difficult times, so that member countries can see a reduction in their ‘dues’. A good start would be to stop the European Parliament introducing draconian, liberty busting, politically correct rules and legislation, which costs money as well as stripping everyone of their national identities.

At this difficult economic time, we must also consider revising the $5bn overseas aid budget, this amounts to 1.5% of all tax receipts and cannot, therefore be ignored. Similarly, the public sector now employs some 1 in 5 of all those employed in this country, it has bloated and is arguably out of control. Equally, the cost of public sector, final salary pension schemes is paid for out of tax revenues, not a pension fund, therefore, the costs are enormous. This needs to be curtailed, the economy cannot afford such generous pension schemes, particularly when the private sector, who were hammered 11 years ago by Gordon Brown, have ‘pensions’ on average, worth just 1/15th of the public sector schemes.

Mere mortals like me, do not get provided witha detailed set of fiancial accounts for UK Plc, therefore I am unable to go through each and every expenditure line, but one thing is certain, you can guarantee that there is waste and excess in a public sector the size of ours and it needs to be dealt with. The way any businesses would do at a time of crisis. The adult population are better positioned than the government to determine where any additional money is spent, which is why any tax cuts must be via direct taxation, not indirect taxes, lets face it, it is our money in the first place. But whatever happens, it will never cost as much as the headline figure the government use to sell the cuts. Because, if people buy, companies prosper, business tax revenues are preserved or rise, VAT is paid, more people are employed, therefore less benefits are paid out, even if people save, many of them will be taxed on the interest. The government never loses.

For the record, I do not believe that bringing forward public sector infrastructure projects is the right way to go. The impact would be very limited, and the benefits disproportionate to the costs. Most of these projects would be PFI initiatives and, mark my word, history will look back at these PFI contracts and wonder why it was, that a government was awash with tax receipts, would enter into contracts which are akin to a consumer buying their houses at credit card rates, rather than on a traditional mortgage.

David “the cupboard is bare” Cameron, with his austerity speech, which I am sure he thought would make him look clever and responsible is in a tight corner. Traditionally the Conservative party has been the party of tax cuts and enterprise, he has fallen into a trap and it was one of his own making. David Cameron thought we needed to be told how bad things were, we didn’t, because we can feel it! A good leader must never, never back himself into a corner, now he must either eat a bit of humble pie, or, more likely for a British politician, he will come out with a fudge. Either way, he made a mistake and he will pay dearly for it. He will not be forgiven for allowing Gordon Brown, one of the most despised men in this country, get away with using former tory policies, at a time when people want them most.

Let me provide David Cameron with one piece of advice, something that he will not appreciate from his privileged upbringing. There is no point in having a balanced budget if you die of starvation in the process. Government takes our money at will, then they spend it on their favourite pet project or group, without consultation, in the process, they keep as much as 35% of our money on ‘administration costs’. If government were an investment fund, it would need a bailout every year, in fact that is what they get, it is just government take our money when they get a bit short, forever dipping into our pockets when we are not looking, a kind of distraction theft. I have always voted conservative in the past, but this lightweight, ill-considered leadership provided by David Cameron frustrates the hell out of me, he just doesn’t seem to have a clue.

Now come on guys, whatever your party colours, pull your finger out. Do what is necessary to help the people of this country, interest rate cuts were the first part, the second is a reduction in direct taxation and the third to reduce wasteful public expenditure. To have a short term impact, the second was contingent of the first, but the second should not be contingent on the third, because the third must always be part of responsible government. Stop whining about losing your seats or creaming yourselves over the thought of winning the next election by default, not one of you has earned your pay yet, so you are all, still very much on trial. If you don’t grow up, we could see quite a few members of the Monster Raging Loony Party, as people register their protest. Still, from what I can see from the current crop of MP’s, it couldn’t be much worse.

Rant over, but have left in typo’s, poor grammar and other errors so you can see just how much I have smashed into this keyboard, off to PC World now to see if they have any cheap keyboards.

In my post last month, I suggested, that what this economy needed was a shot in the arm, a package of measures designed not to avoid a recession, because that is impossible, but to reduce the impact on the people of this country. Unlike either of the main two political parties, I suggested a six point plan, which included a dramatic reduction in interest rates and a requirement that the high street lenders pass on the cuts in full.

Of course I am not suggesting that anyone takes any notice of my posts, but I am pleased that one of those points has been implemented, albeit, not as far as I would have wished. The Bank of England has reduced the rates by 1.5% to 3%. I was calling for a cut to 2%. However, if the country was to receive any benefit, the cuts would have to be passed onto borrowers, both domestic and business. This, for the most part is not happening, at least not so far.

Only Lloyds TSB, through their mortgage arm, Cheltenham & Gloucester and the Bank of Ireland have indicated that they will pass the cuts on in full. Now in the case of Lloyds TSB, I suspect their motive was to demonstrate in a tangible way, that whilst their takeover of HBOS will lead to them becoming the largest retail bank in the UK, they have no intention of using their dominance in a negative manner that would reduce competition. We will have to wait and see whether or not that remains the case of course.

However, when it comes to the other banks, their response demonstrates that they have little or no regard to their customers or the people that have bailed their businesses in one form or other. They have only indicated that they have the interest rate decision ”under review”. Well that is just not good enough. When the banks struggled, they came, cap in hand to the Bank of England and therefore the taxpayer, to help them with guarantees, cash injections and short-term cash advances. The banks received pretty much whatever they needed, regardless of the impact to the balance sheet of UK Plc or the cost (and risk) to the taxpayer.

Now the banks have a real chance to demonstrate that they appreciate the assistance or lifeline they have been given. Instead, they are, at least for the time being, indicating that they feel little or no obligation towards the wider UK economy, the well-being of its citizens or their customers. Now, yes I know, before people tell me the obvious, they are ‘independent’ financial institutions and must be free to make commercial decisions. However, as soon as they came to the taxpayer to assist them at their time of need, they gained at the very least, a moral obligation to repay us by supporting anything that would assist the taxpayer in their time of need. Which clearly a reduction in interest rates would do.

I am angry with the bankers, very angry and everyone else should be as well. The banks have made £billions over the past 10 years from their customers. Many, have at times, been reckless in their lending practices, and they hold a considerable proportion of the responsibility for where we are today. So do the borrowers, but banks were and should have been the ‘grey’ men, those that provided a balanced view and set lending criteria. The banks are also being very short-sighted.

The higher the interest rates, the more likely that their will be defaults and house repossessions. In the case of the latter, banks often have to sell properties at auction, resulting in returns of at 20-25% below market values to secure a sale. Add this to the fact that many properties have fallen in value and their losses on each property have to be quite staggering. Therefore, wherever practicable, surely they would be better off attempting to ease the burden and keep more people in their homes?

In additon, the higher the interest rates, the less money that is in the economy and the less transactions that will take place. The latter is the bread and butter of the banks, they make money when people and business transact, they benefit from money that is lost in the system for days on end. They do best when their customers feel able to spend. Customers will clearly be more conservative, they will borrow less and many will reduce their debts. But more money in our pockets, means a more responsible nation, because most people will choose to be responsible rather than reckless. In the past, going bankrupt was a painful and drawn out affair, today it is far easier, no-one benefits, least of all the creditors, if people throw the towel in because they can see no way out. The banks will be first in line to suffer if bankruptcies rapidly.

Whilst I am cognisant of the high inter-bank lending rates, these will come down and in all honesty, the reduction in the Bank of England rates by 1.5% will, for and intents and purposes be neutral to the banks.

Whether we do it now or later, I believe we should all punish the banks that have not supported their customers or the economy by passing on the interest rate cuts in full. Particularly, but not exclusively, those that have received assistance from the taxpayers. We should look to move our current accounts to banks that have supported their customers…en-masse. We must hurt them as they are determined to hurt us. Banks make big money from current account transaction charges and the ‘balances’ are used by the banks to reduce their borrowing costs. We must cancel our credit cards with the banks that are associated with not passing on the rate cuts and consider moving our mortgages. Now I appreciate that this may be impossible for people to do right now, though I am going to, but we must remember, that in our hour of need, even when it was obvious why the Bank of England reduced interest rates, the banks stuck their middle finger up to us all. We must return the compliment. Even if we have to bide our time and do it when the banks least expect it.

I urge everyone to remember each and everyone of these banks that have screwed us and make them pay, make their shareholders fully aware that there will be a medium and long-term price for their refusal to come to the aid of this country. There will be a price for their decision to ignore their moral responsibilities and helping those that helped them. End of rant!

When Gordon Brown became Chancellor of the Exchequer, one of his first tasks was to raid the pensions of the private sector, something that has provided the exchequer additional income of over £10bn every year since. This put pay to many private sector, final salary schemes. Meanwhile the public sector, which of course includes politicians, have had no corresponding adjustments to their own final salary scheme pensions. So much for the Gordon Brown mantra of a “fairer Britain”, as with so many things he says, they are full of promise and have little or no substance.

The latest figures suggest that public sector pensions are worth more than 15 times those of private sector workers. So whilst the private sector has had to grasp the nettle and accept that final salary schemes are no longer sustainable, Gordon Brown, whilst he was at the treasury and now has prime minister has failed to deal with the issue. So lets put that in perspective. According to Ros Altman, one of Tony Blair’s own advisers, the average public sector worker will be entitled to a pension of £17,091, compared to the average private sector pension of just £1,086. Is this a fair Britain?

The public sector is invariable the first group of workers to vent their spleen about earnings. However, according to the Office of National Statistics, in 2007, the average public sector worker earned just under £26,000 per year, whilst the average private sector worker had to settle for a tad under £23,000. Unlike private sector pensions, public sector pensions are paid out of future tax revenues, not an annuity. This means that the treasury does not have to ’purchase’ an annuity to pay for the pensions, nor do they have to include the liability on the treasury balance sheet. Even though the cost of these pension contributions are estimated to be £1 trillion. That’s right, more that twice the cost of the bailout or nearly 5 years worth of tax receipts. This is a scandal of monstrous proportions and yet Gordon Brown continues to swan around as if he is a financial genius. I would not trust him to hold my loose change!

Someone in the private sector would have to buy an annuity of £427,275 in order that they could benefit from the average pension of £17,091 enjoyed by the public sector. The average private sector pension scheme has a ‘pot’ of just £24,000! So they would be lucky to receive a pension of £1100 per annum. Given 1 in 5 of all workers are employed by the state, I doubt that my observations will curry favour with everyone, but it is a scandal and one that we shall all have to pay for.

If you thought Gordon Brown was taking this matter seriously, you would be wrong, here is a excerpt of what a treasury spokesman is reported to have said: “High quality pension provision is a key part of the remuneration package of public servants, aimed at maintaining a high quality public sector workforce. These pensions are fully costed and fully affordable.”  

Gordon Brown may choose to ignore public sector liabilities of circa £1 trillion, but the taxpayers of this country cannot, nor can our children who will be expected to pay the bill for Brown’s largess. At a time when everyone must look closely at their liabilities and consider tightening their belts, the opposition parties need to push this scandal right to the top of the political agenda, given the costs are not sustainable in the short-term, let alone the long term. Given that we know MP’s final salary schemes are amongst the best in the world, we should, perhaps, not hold our breath for an investigation anytime soon.

Yesterday, I wrote an article suggesting how this government could reduce taxes to help stimulate growth in the economy. This was partly a Keynesian approach, given I argued that it was possible that these tax cuts could be self-funding, if my proposals worked. The reason for this was, if we do nothing, there is likely to be a significant surge of people claiming benefits, rather than generating income for government coffers. My proposal was, if the government was going to borrow to invest, they would be better off doing so, with a natural stimulus, rather than bringing forward capital building projects which would only benefit a small section of the economy.

My proposal, amongst other things, was that government should reduce the basic rate of personal tax by 5%. Over a period of 3 years, this would cost around £45bn, less than 10% of the cost of the banking bailout. However, by allowing us to retain more of our own money, we could decide how and where we would spend the extra money we were ‘permitted’ to retain. If we were to spend it in much the same was as we did before the crash, my argument was and is, that more small and medium sized business would survive and therefore more people would remain in employment. I noted that some 13.5m people were employed by small businesses and these same companies accounted for, just shy of 50% of UK Plc’s output. However, I also noted, that the Keynesian approach was that government should adopt a balanced budget, that is to say, they should cut back government spending in certain areas, to allow them to invest in other areas. Having read my post this morning, addressing the usual, inexcusable typos, I decided that I should expand on my own theory.

For example, my pet hate is the government’s proposed Big Brother Database, which I think is a massive attack on the civil liberties of every person in this country and an unforgivable intrusion into our right to privacy. That said, this government, if it goes ahead with this initiative, is expected to spend some £12bn on this massive Big Brother Database. Now quite apart from the fact that we know this government has never yet managed to bring an IT project in on budget, the figure that needs to be allocated is huge.

Therefore, the question I wanted to ask was:
Which would you prefer a Big Brother Database that infringes our civil liberties and intrudes on our privacy at a cost of £12bn or an immediate 4% cut in the basic rate of income tax for at least 1 year? From 20% to 16%? - I know what my answer will be.

Then I went on to look at other large government capital expenditure projects, this time I focused in on the much criticised NHS Database Project. It is worth noting that the original cost was estimated to be £2.3bn, by 2006 that had rocketed to £12bn, with some independent estimates suggesting it could cost as much as £32 billion. Most medical professionals question the viability of this project, the public have barely been consulted on such a massive project and even though some £2bn has already been spent, there is little to show for it. So, lets be generous, and take a middle figure between the governments estimate of £12bn and the independent estimates of £32. This leaves us with a likely cost of £22bn.

Therefore, my question is:
Which would you prefer, to shelve or cancel the NHS Database or receive an immediate cut in the basic rate of income tax of 5% for at least 18 months? The reason I have said ‘at least’ is because if this additional money prevents people losing their jobs and claiming benefits, then it would be possible to extend the period of the tax cut, perhaps indefinitely.

So what of the ID Database Project. Yes, I know, this government is completely obsessed with databases, it is a pity, they do not also consider the massive security risks associated with having all of this information on computers. However, I digress, this particular project, is simply aimed at having all of our personal ID information in one place. The cost, an eye-watering £5.4bn.

So, once again, my question is, which would you prefer, an ID database where only the government and its agents see the benefit, or an immediate cut in the basic rate of income tax of 2%, for a least one year, from 20% to 18%?

My basic premis is that this government has an obsession for massive information technology projects, most of which have been so poorly considered, specified and planned that they are either doomed to failure or massive cost overruns. This governments track record of waste is well documented and appalling. Most of these pet projects are not wanted by the public and it has to be said, the vast majority will allow government to know everything their is to know about every single legal citizen in this country. Because this government is obsessed with using IT to spy and control its subjects. At this time, the biggest threat to our security (apart from the government itself) and our well being, is the state of our economy, not terrorism. Yet no-one from government has suggested shelving, postponing or cancelling any of these Big Brother databases. Even though, combined, these 3 projects alone, will cost a staggering £40bn. If the government were to add an extra £5bn, we could all benefit from a reduction in the basic rate of income tax of 5%. From 20% to 15%, for a period of 3 years, if we are lucky, this would be able to see us through this period of recession. In addition, as I have argued earlier, if this money is invested into the economy by us, then jobs could be saved, government would benefit from the revenues brought about by indirect taxes, business taxes and fewer unemployed claiming benefits.

So, my final question, is which would you prefer? Government to spend £40bn on 3 highly questionable information technology projects at a time of this massive economic downturn, or more money in your pocket. £40bn on IT projects, or a 5% cut in the basic rate of tax for 5 years. QED!

Footnote:
I have also argued strongly for a significant, simultaneous cut in the Bank of England bases rates from 4.5%, to 2%, with all taxpayer funded banks being ‘required’ to pass on this cut to their customers. This will reduce the number of repossessions and/or increase the amount of money available to us, to reinvest into the economy. I am sure there will be economists out there that can or will pick holes in my arguments, well go ahead, someone needs to come up with some ideas, because it is pretty clear to me, this government hasn’t got a clue, the Conservative Party has backed themselves into a corner with their negative, one size fits all ‘austerity’ assessment of our economic future and none of the other parties have any influence. Sad, but true!

At prime ministers questions time, Gordon Brown, once again, decided to take all the credit for “creating 3 million new jobs” and none of the responsibility for the ‘bust’ brought about by the credit funded boom that was his creation. Instead, he avoided all of the questions he was asked and once again, came out with the same old mantra, that the problem was the fault of the Americans and the bankers. Nothing new there then.

He did imply, however, that he believed that the government should invest in times of recession, a sort of embracing of the Keynesian approach. However, John Maynard Keynes did not suggest that government should simply spend, but that there should be a balance. He also argued, that it was possible that if government used borrowed money wisely, it could be self-financing. For example, most people want to work, which means that given the opportunity, they will not be a burden on the state, but an asset. In addition, companies want to sell their goods, at a fair price, employ people, succeed and therefore, be an asset to the state.

To achieve this, people need to have money to spend, yet the state takes nearly 50% of what we all earn. That is way, way too much. A reduction in direct taxation, would be much less expensive than building new schools and hospitals earlier than was originally intended. Moreover, a construction boom will be very limited in terms of assisting the wider economy. What we need is more money in peoples pockets, which they can invest in buying goods and services offered by retailers, service providers and manufacturers. In other words, a natural stimulus, not a false one.

If people feel poorer, then they will push their employers to pay them more, this adds a further burden to struggling businesses and places inflationary pressures on the wider economy. In addition, public sector workers, who account for some 20% of all employees in the UK are starting to get increasingly vocal about higher wage increases and they are backing this up with threats of industrial action. This is no good to anyone. Furthermore, if they succeed in getting higher wages, this will be a cost borne directly by the taxpayer and will inevitably result in a cut in services as the public sector attempts to balance the books.

We know that a boom based on easy credit is not the answer, nor does the equity in a property really amount to tangible wealth. The Keynesian approach advocated, amongst other things that borrowing to provide tax cuts can provide an aggregate increase in demand and, that properly targeted, it could be self-financing, because demand will create or save jobs and people that are employed, are not a burden on the state. In addition, companies that are selling goods, will be pay tax and sell goods that, for the most part, attract VAT.

A cut in direct taxation would have an immediate and tangible affect on the publics ability (not necessarily willingness) to spend. If this would was coupled with a substantial, perhaps 2 or 2.5% cut in bank base rates, then the benefits would multiply as would the potential speed of recovery. The government has indicated that they want to spend £12bn to create a database to spy on the public, apart from the fact that this is both unnecessary and a massive attack on our civil liberties, it is also something that is a nice to have, rather than a need to have. That notwithstanding, even if they proceeded with this database, the chances are, the contract would be awarded to an American company! Yet this £12bn, could ‘fund’ a 5% cut is direct taxation for nearly 3 years, if you were to ask the public what they would sooner have, there are no prizes for guessing their likely preference.

In addition, the government is intending to proceed with the £13bn NHS computer system. There is no proof that the system will work, nor has their been a sensible cost/benefit analysis. This project should be shelved and the money used to invest into small and medium sized businesses. I wrote an article yesterday, outlining some of my own ideas to assist small businesses. These companies employ 50% of our workers, some 13.5m people and provide nearly half of our output. An investment in this area, could secure jobs, companies and tax revenues.

It is true, governments cannot prevent a recession, but they can, through careful management of their (our) finances, targeted initiatives and the shelving of non-essential investment programmes, reduce the length and severity. Had the conservative party not nailed their colours to the mast, with an austerity assessment of the UK economy, claiming that “the cupboard was bare”, then they could have proposed this type of solution. Instead, they must either say that they got it wrong, or the Labour government, if they are bright enough to steal the initiative, will be able to come out of this smelling of roses.

For what it is worth, I am not convinced that this government, or the other political parties will want to endorse my suggestions, because they seem more interested in telling us what won’t work, rather than what might. It is this dithering and indecision that will damage this economy. Whatever action is taken it needs to be bold, decisive and meaningful. Therefore, in summary, my suggestions are as follows:

1. Shelve the £13bn investment in the NHS computer system
2. Cancel the proposed £12bn Big Brother Britain database
3. Reduce direct taxation by 5% for a minimum period of 3 years
4. Implement a package of incentives and tax reductions for small business
5. Instruct the independent Bank of England to slash rates from 4.5% to 2%
6. Ensure that all taxpayer funded banks pass on the full cut immediately, which should encourage the others to follow or lose

My suggestion will cost a tiny fraction of what the government has already invested into the banking system and provide a tangible stimulus to the economic activity of this country. Above all, it may just ensure that we can watch the news and receive some good news. If the government introduced, or the other parties proposed such an initiative, I do not believe anyone, other than a few discredited bankers and economists (who already got it wrong), would criticise the move. The bottom line is it is our money and we should be allowed to keep more of it and decide where we will invest it.

Now that Gordon Brown and Alistair Darling have committed some £500bn to the banks in loans, guarantees and shares, it is time to reflect, to allow the city, time to digest the level of this intervention before going any further. There is now a real risk that the government could become its own worst enemy, by saying they “will do whatever is necessary to stablise the UK economy”, they are sending the wrong message to the city. Yes, I mean the wrong message, city investors are not uninterested parties here. Whilst the taxpayer is shoring up balance sheets, buying up shares, rescuing companies and intervening in the money markets, the ‘city types’ have their own investment portfolios protected. The government is continuing to speculate at our expense, with limited or no risk to the investors.

As I have said before, I am no economist, I am no expert, but I have been blessed with some commonsense. This tells me that if you are constantly running at full pelt, you don’t have time to see what you have passed, what you have left behind and whether you are still in the race. The government must stop NOW, before they bankrupt this country. They have oiled the wheels and reduced much of the investor risk through these interventions and the substantial injections of cash underwritten by the UK taxpayer. No more open-ended promises.

Government must also look at which stocks are falling. For example, most people accept that we are about to face a world recession, therefore, you can expect organisations that are involved in commodities to see their share prices fall. And, of course, these are some of the largest companies, in terms of value, on the stock exchange. Add this to banking and financial stocks and of course we will see a massive fall in the value of the FTSE. On top of the so called banking crisis, a recession means that city experts will be looking at companies that will do well out of a downturn and those that won’t, this will then be reflected in their share price. So, given there is a recession looming, it is fair to assume that stock prices would have fallen anyway.

Virtually from day one, this government has used taxpayers money as if they had been given their very first credit card. They have gone on a spending spree, thinking they are rich and there is an endless money supply. Then, once they realised they had overspent or reached their credit limit, they simply came after the taxpayer for more money. As a consequence, this Labour government has set a poor example to everyone else, now we must all pay for our excesses…but that includes government who must haul back on their investment commitments, they must learn to live within their means, just like everyone else must do.

My concern, is that the current banking crisis has them on that road again, they think they can spend more and more of our future tax revenues in the name of saving us all from some type of doomsday scenario. Now I accept, some form of intervention was necessary, but this must have limits and I am worried that this government has exceeded those limits with an intervention that is worth at least as much as that provided by the American’s, who’s economy is 3 times the size of our own. It is also worth noting, that £500bn is more than double all tax receipts, based on the 2007 figure. Given we are likely to have much reduced tax revenues because of company losses (they can carry these forward to offset against future profits), falling employment and lower sales, this £500bn might end up being the equivalent of 3 years worth of tax receipts.

Now the government have told us there may be some upside for the taxpayer. I don’t like the word ‘may’, nor do I really trust this government to negotiate a good deal for the taxpayer. It has been suggested that this government has lost close to £110bn in poorly negotiated contracts, mistakes and failed projects. This record does not bode well for the taxpayer, when the same people are negotiating with experts. Lets hope, this time they have learned some lessons, though I will not hold my breath. But in the meantime, I would like to advice Alistair Darling and Gordon Brown to STOP, pause for thought, look at whether what you have done has had any positive affect and stop offering the city a blank cheque, no-one could blame them for taking advantage.

This Labour government is not really known for getting a good deal for the taxpayer, so I am left wondering what sort of quid pro quo, is received by the UK taxpayer, in return for the monies that are being loaned or gifted to the banks. Let me explain.

The justification given by the government for the intervention of the Bank of England is that they need to get the credit market going, increase liquidity, encourage the banks to lend to one another etc. However, what guarantees have the Bank of England or the government sought from these banks? After all, no-one is claiming that it is now easier to get a loan, a bank overdraft, a mortgage and so on. Therefore, is it fair to assume that the banks are not using the money they have been loaned for the purpose it was provided, or is the government just lying to us? Or perhaps, no-one has though of including any pre-conditions for the loans, so that banks are just using this money to shore up their immediate cash flow issues?

The Bank of England has had to intervene by taking over the mortgage debt of Northern Rock and Bradford & Bingley, much of which would be termed sub-prime, or ‘dodgy’ if you are English. If we are to believe all that we are told, then the banking sector is so intertwined, that somewhere, another bank, or more likely several banks have benefited from the effective underwriting of this so-called toxic debt. So, what do we, the taxpayer, having taken on all this risk get in return?

Perhaps I am just missing the point here, I am not a banker, nor an economist. However, I am a taxpayer and as such, my signature has been used to underwrite these debts and therefore, I believe I deserve a full account of precisely what has been taken on in my name, the risks, returns and the conditions, if any. The government and the Bank of England keep using terminology that is foreign to me, why… have they got something to hide? Surely if they are going to use our money to bail our both the banks and the city, we deserve an explanation in laymans language, not just a doomsday scenario designed, in my view, to frighten us all into submission and asking as few questions as possible.

I don’t trust this government, they have consistently lied to the public, manipulated figures and misled us whenever they could get away with it. Then there is the Bank of England, which is run by bankers and economists, the former (bankers), the government would have us believe are in part responsible for this mess and the latter (economists), should perhaps have seen this disaster coming. Whatever the situation, this government is spending billions of pounds our money and we don’t know what chance we have of getting it back. We don’t know if they have secured any form of agreement in return, such as a loosening of consumer and business borrowing facilities, nor do we really understand the government or BoE’s primary objective, so at least, we could measure whether they had been successful on our behalf or not. No doubt this is the whole point, if they don’t tell us what they are trying to achive, we won’t know if or when they fail!

In spite of all this intervention by so called experts, the stock market has plummeted by some 7% at the time of writing this post, so something isn’t working. Worst still, we are given to understand that the Bank of England has intervened in the stock market to slow the decline, so does this mean that we have also had massive paper losses. My message to the Government and the Bank of England is that it is time to come clean with the shareholders of UK Plc…right now!

Yesterday, David Cameron, in his address at the conservative party conference told us that he was a man with a plan. The generally accepted definition of a ‘plan’ is ‘A scheme, program, or method worked out beforehand for the accomplishment of an objective’. Now, whilst I accept that he may have a plan, his speech was short on detail and therefore, he must either expect the electorate to take him at face value, or he intends to publish more detail in the future. If it is the former, then it is a very big ask, given few, if any politicians have earned the trust of the electorate. If the latter, then I would suggest that it be sooner, rather than later if he wants to be considered a heavyweight, rather than a lightweight.

It was clear that David Cameron wanted to come across as sincere, a man of depth, with honesty and sincerity at his core. Excellent values, but if I may be so bold? David Cameron adds little, when he simply repeats what we already know, that the economy is sliding towards a recession, the government has incurred significant debts and that the overall tax take is on a decline in line with the economic downturn. He tells us that we must fact a period of austerity and that he must make, indeed will make the tough decisions for the long term benefit of the country, “no matter how unpopular” that makes him. Really? Well I have got news for you mate, we have just had 11 years of tax rises and there is no point in the electorate voting in a Conservative government that is promising more of the same, No way sunshine, not in a million years.  

David Cameron may, albeit based on yesterday’s speech this is hardly guaranteed, win the next election simply because so many people are fed up with New Labour. But, if Cameron thinks he will be whisked into Downing Street on the back of tax rises, I think he is wrong. Okay, so he hasn’t said it in so many words, but isn’t that the point, we are all fed up with politicians talking in code, saying one thing and meaning another. However, if he tells us he is going to put up taxes, he would probably need to explain which one’s, by how much, when, and of course, why. So instead, we get coded threats about David Cameron being willing and ready to make the ”tough decisions”. Sorry mate, that doesn’t make you clever, because we could all do that, even Labour. David Cameron doesn’t deserve to be elected on a principle of using higher taxes to prop up government finances, after all, surely a principled man like David Cameron wouldn’t approve if we all went and helped ourselves to more money from our employers pockets and lets face it, there is no difference.

With a bloated public sector employing one in five of the workforce, massive government waste on projects and initiatives that have gone nowhere, or are going nowhere, there is plenty of ‘fat’ that be cut before dipping into our pockets. Much as many of us want to get rid of New Labour, I would urge floating voters not to vote for David Cameron on a mandate, coded or otherwise, of higher taxes. This is because it really doesn’t take a very clever man to increase taxes, in fact, that is the easiest thing to do. Increasing taxes is what we would expect from a novice, a man of little experience and man short on ideas, ability, depth or lets face it, credibility. It takes a real man, or woman, to tackle the reason why so much of our money is needed in tax and that, is what we have come to expect from a conservative leader. There must be a war on government waste and excesses.

I believe Cameron is sincere, but I also believe his personal life is shielded from the real problems of the people in this country. He doesn’t have to struggle paying his mortgage, car payments or utility bills. Yet he meets a couple of people and think he knows what it all means. If I spend 10 minutes observing my car being serviced, does that mean I am a mechanic?

I have said, in the past, that anything is better than New Labour. But if I am honest, a new government, that still believes that they are entitled to increase their tax take from the British public, in spite of the hardship, before knowing how much they could save by cutting government excess and waste, doesn’t deserve our vote.

Think again Cameron….the LibDems have failed miserably for the past 3 or 4 elections because they thought the British public would agree to higher taxes. They were wrong and you are wrong. It is possible that the conservatives will get in because of the significant backlash against New Labour, however, if we know that the conservatives are going to put up taxes, we may just decide that it is better the devil we know and stick with experience.

I have always been a conservative, but I could not and will not bring myself to vote for any party that includes tax increases as part of its commitment, not least because this current administration has left enough fat within government to keep a butcher employed for 5 years without losing any of the meat. Think about it Mr Cameron, get rid of some of your Eton boys and get some real people in to advise you….before you cock it up!

Gordon Brown is right, the rumoured proposal that the government provide rebates or vouchers to those in ‘fuel poverty’ is simply not sustainable. With an estimated 4.5m homes in fuel poverty by the end of the year, this problem is of a scale that no government can realistically resolve without placing a massive burden on the public purse. Worst still, the problem will still be there in a year’s time, possibly even worse and those recipients will expect the government to step in again.

The government is right, investment needs to be placed into a long term solution, that both encourages and helps people use less energy. This is part education and part investment. It is estimated that home insulation and other energy saving measures can reduce energy bills by as much as a third. However, the government recently reduced the money available to Warm Front by a third, this does not provide much evidence that the government is practicising what it preaches. No doubt Gordon Brown will reverse this decision and then suggest that it is “new money”.

Whilst there are an estimated 4.5m people in fuel poverty, it is worth noting that everyone is suffering, irrespective of whether they have been labeled as such. Those that are not currently in fuel poverty are also having to contend with higher fuel bills, higher food bills and in some cases, higher mortgage costs. Many who are actually working have had to seek part-time jobs. If the government provides subsidies to those in fuel poverty, the truth is, everyone else will have to foot the bill, either through higher taxes or higher fuel bills. The government need to be creative rather than simply shifting the burden, not least because those that are in work have consistently, under this government, been expected to take up the slack and pay for those that are not prepared to look for part-time work.

The government should increase the amount of money available for energy saving measures such as insulation and low energy bulbs. They should persuade, rather than attempt to threaten, the existing energy companies to meet this additional investment on a pound for pound basis. It must be remembered that these energy companies will have to invest billions of pounds over the next 10 years to secure our energy resources for the next generation. They must stop talking about a windfall tax, but instead, use the carbon trading scheme to maximum affect to encourage the investment in UK based energy saving measures rather than those of third world countries.

There is no doubt that the energy companies have taken advantage of the current turmoil to increase their profits and therefore the dividend payments received by their shareholders. The government must provide the regulator with teeth, in order that the regulator can control and approve energy increases. If the regulator is not in place to keep a handle on such matters, then what is it there for? [Can Parliament control Energy Prices]

Another, perhaps more controversial solution, is to allow those in fuel poverty to seek part-time jobs. Yes, I am talking about lone parents, pensioners, the unemployed and the 2.5m in receipt of long term disability payments. There will be some that are genuinely not capable of work, even light work, but the vast majority could do something, stacking shelves, cleaning, washing cars etc. If those in work have to help themselves to keep their heads above water, then why not the unemployed, lone parents, pensioners and long term disabled? Many won’t because they have to declare the money they earn and so, for every pound they earn, they lose it in benefit. So in a way, their view is understandable, given it is a disincentive to help themselves.

Instead of just giving them another handout, which only encourages them to expect a bailout everytime they are in trouble, the government should give them a tax free allowance, that would allow them to earn, for example, up to £150 per month without having to pay tax or national insurance. Yes, we wouldn’t get any tax revenues from these earnings, but neither would the rest of us have to pay out a cash subsidy in full. Better still, it encourages them to stand on their own two feet, to stop looking at the state, or more accurately their working neighbours, friends and relations to subsidise their living expenses. There may be a special case for pensioners, but they, of course, do receive additional fuel allowances and many would work part-time if it were not for the complicated process of paperwork and tax they must endure at the hands of this bureaucracy obsessed government. Those in receipt of ‘tax credits’ could be provided with a special ‘work credit’ that would allow them, or their partner to earn a specified amount of money which would not be subject to tax or national insurance. This could be removed, if necessary, at a leter date as the economy improves.

Any allowances should be very carefully targeted at those that simply cannot help themselves, genuine cases, not the workshy. Those in receipt of benefits would have no excuse not to do what everyone else must do when things are tight, to go and get a part-time job, to help themselves. You reap what you sow.

A creative approache to government always has its critics, because there will always be those that believe it is wrong to expect people to help themselves, or it is just not the way things are done in the UK. Who cares, our greatest leaders have had original thought and a desire to deliver. But, desperate times require desperate measures. A government bereft of original thought, needs to be more radical, a government that believes throwing money rather than opportunity in the direction of the so called poor, needs to look at alternatives.

This government needs to look at its income much the same as the average family. In difficult times, the family will look at ways to economise, ways in which they can generate additional income and ways in which they can reduce or minimise the cost of their borrowings. Government needs to adopt a similar approach. There are countless examples of this government’s waste, excess and abuse of taxpayers money. They need to reign this in now. Government needs to look, not at borrowing their way out of this mess, or just dipping into the pockets of the hardworking taxpayers once again. They must be creative in their thinking, radical in their approach and understand that if it was not for the taxpayers of this country, the poor would be desolate, starving and homeless. But there is a limit to just how much you can redistribute wealth and most taxpayers have had enough.

The pound is low, which makes exports much cheaper, this government should have their best ’salespeople’ lobbying leaders of other countries to buy our products, to improve our exports. It doesn’t matter whether it is the trade department or the ambassador, everyone should be put to work to help this country. Taxpayers funds, as the government has finally discovered, are not the bottomless pit they once believed. Be creative, be bold and stop worrying about your seats at the next election. This government must start to demonstrate respect, not contempt for the ‘have’s’ that have subsidised and supported the ‘have not’s’ and allowed you to spread our money around as if it were your own or an automatic entitlement. Above all, remember, there are 650 of you that have been entrusted with the future of this country, earn that trust by doing your jobs!

A good start would be to suspend or dramatically reduce our overseas aid budget. This could provide up to £5bn to invest in energy saving measures. Charity, as the saying goes, begins at home. This government ignores that at it’s peril.

Once again the news contains an interview with Gordon Brown declaring how he is going to give away taxpayers money dressed up as humanitarian aid. Now don’t get me wrong, I accept that we have a oral obligation to assist those in need, but in the case of Georgia, it is not a particularly poor country and lets face it, if the Russians are responsible, then the powers that be should put pressure on then to pay restitution.

At a time when the people of this country are facing rising unemployment, rising food bills, increased mortgages and huge hikes in fuel and utility bills, Gordon Brown needs to practice what he preaches. A few weeks ago, this arrogant little man sought to patronise the electorate about food waste, a subject he must know very little about having been cosseted for so long. Now in just his second sentence, he says that “we” will provide aid to Georgia.

This year it is likely that many of our old age pensioners will have to choose between whether they eat or heat their homes. They need our help, instead, Brown gives them a humiliating hand-out, he needs to address the real issues, if heating bills are set to remain high, then adjust the pensions, don’t make former taxpayers beg for the money. Gordon Brown is a control freak, whenever there are allowances to be had, he insists that people have to claim them, even though it costs billions to administer, requires an A level student to complete the forms and makes no sense at all, well except to him.

Charity begins at home, what this country needs is a prime minister that genuinely understands the pressures on its citizens, not one that wants to be on the world stage, viewed as a philanthropist, doling out taxpayers money. Just who the hell does Gordon Brown think he is, what gives him the right to write-off debts and issue aid as if the money knew no end? The country is borrowed to the hilt, its citizens are struggling to pay ever rising fuel costs and taxes are set to rise. Yet we still have a £5bn slush fund for aid, enough to build 20 hospitals!

It is high time Gordon Brown started to get out a bit, connect with the people he seems so keen to lecture and fleece. Instead he surrounds himself with yes men, or business people with little or no understanding of the real world. Bottom line is, many of these these so called experts have no mortgage, are not forced to find the extra money to fuel their cars so that they can get to work and are not having to watch every penny. What on earth does Gordon Brown believe they are going to add. When he said he would have a government of all the people, clearly he forgot about you and me, over 60m British subjects.

When was the last time Gordon Brown went shopping, drove a car, heated his own home? He is out of touch, he surrounds himself with people that are out of touch with the majority of people in this country and he listens to flunkies, to scared to tell him the truth. It is high time Gordon Brown brought in real people to advise him, people that will not cower if he has a temper tantrum and above all, people that are not seeking some reward such as an MBE, knighthood etc., for their efforts.

Gordon stop worrying what the press says, start worrying about the people that you are supposed to represent, stop giving our money away as if it is your won and stop spending money that that you don’t have. You govern by consent, there is a limit to what the public will accept in terms of taxation and you have reached it. You can no longer use sleight of hand to take our money, we are wise to it, no-one ever listens to your budget anymore, because we know that the real pain is in the detail, so we have to wait for the analysts and newspapers to tell us how you are going to extract our hard-earned money. We are wise to you, shape up or ship out and remember, charity begins at home, so start looking at the most needy in this country.