How Fragile We Are, How Fragile We Are

(With apologies to Sting).

You know it's getting to you and you're going down in flames when you start bursting into tears for no good reason.

Get a grip, Ken.

Romney For President

So Rick Santorum has thrown in the towel. My man wins as I wanted. So what next:

1. The General Election has now started. Obama v Romney will start clashing daily.

2. Gingrich and Paul need to be told to poke off. They are now a distraction sapping energy out of the main effort. My guess is they will be forced to desist.

3. Who will the running mate be? Needs to be a conservative Southerner. Christie? Santorum? Perry?

Stuck

So...as I predicted here...I was right. We are well and truly stuck on the 45% top rate of tax from today's news. Well anyway until after a possible Tory win in 2015. And where does that place us in the international league table then?

Sweden - 56.6%
Belgium - 53.7%
Denmark - 52.2%
Netherlands - 52.0%
Japan - 50.0%
United Kingdom - 50.0% (old rate)
Austria - 50.0%
Finland - 49.0%
Germany - 47.5%
Ireland - 47.0%
Australia - 46.5%
Canada - 46.4%
Iceland - 46.1%
Portugal - 45.9%
France - 45.8%
Israel - 45.0%
Greece - 45.0%
United Kingdom - 45.0% (new rate)
Italy - 44.9%
Spain - 43.0%
United States - 41.9%
Switzerland - 41.7%
Slovenia - 41.0%
Chile - 40.0%
Norway - 40.0%
Luxembourg - 38.9%
Korea - 38.5%
Turkey - 35.7%
New Zealand - 35.5%
Poland - 32.0%
Hungary - 32.0%
Mexico - 30.0%
Estonia - 21.0%
Slovak Republic - 19.0%
Czech Republic - 15.0%

Whoopy fucking do. All that media savaging for that? Not good.

Interestingly, if you can be assed to delve into the Red Book and see what the Treasury's own analysis is on this issue, it turns out that 37% is the optimum rate for raising the most money. But then logic always gets trumped by politicking.

(PS The table highlights just how stupid the loony Lefty French Presidential candidate Francois Hollande's 75% policy looks. Coupled with their Financial Transaction Tax policy, this should utterly screw the French economy for some time. I suppose there is a silver lining to every cloud after all).

Rogue Media

Oh dear. Despite all the madness of 'Hackgate' and the horrible weekly revelations before Lord Leveson's inquiry, it seems that old Tabloid tricks are alive and well, with 'Red Top' reporters skulking around ministers' gardens trying to set up a sting (see here).

Which is why I continuously call for proper press regulation, just like the broadcast media has, and hope that the Good Lord Leveson sees sense.

Politicians' Tax Affairs

As I blogged a few days ago, Ken is a lying hypocrite. He has carried out sensible tax planning whilst blasting anyone else doing exactly the same as a tax avoiding “rich bastard”. He has then compounded this by smearing Boris as a tax avoider, when in fact Boris has either generously or stupidly not carried out any sensible tax planning and actually paid more tax than he is required to under current tax law.

All the London Mayoral candidates have now released some tax information. Ken’s is incomplete, incorrect and designed to obfuscate his real situation.

But after the media upped the ante on this whole issue, Boy George has now said he is up for the debate on whether frontline politicians should publish their tax returns, as in the USA.

This is a bad thing.

A really, really bad thing.

Of course we want our politicians to pay UK tax. So it goes without saying that all UK politicians should be UK tax resident. So far so good. And we want our politicians to not be lying hypocrites - hear that Ken? (Let’s not get started on all those Lefties who rail against private education and quietly send their children to private schools. That’s another level of hypocrisy for another post). But there are some serious arguments against extending these two perfectly proper requirements to requiring all politicians to publish their tax returns.

1. We will never get the media and the Left to be able to understand the difference between tax evasion, aggressive tax avoidance and sensible tax planning. The first is illegal, the second is unpleasant and successive Chancellors endlessly chase this problem through new legislation but the third is to be commended. We want people to work hard and they should be allowed to keep their hard earned income. It is a basic human right as far as I am concerned. So everyone should tax plan to perfectly legally and properly retain as much of their hard earned income as they can. Meanwhile, all governments have a terrible and endless track record of wasting taxpayers’ money and we should give them just enough to do what we need them to do and no more.

2. Direct comparisons of people’s tax affairs are very difficult. Much depends on many variables including your age, your employment circumstances, your attitude to saving/pensions/investments etc and of course each tax year is different with changing tax rates and changing individual circumstances. We would get terrible, wildly wrong and very politically partial analysis of politicians’ differing situations.

3. People just won’t understand the information. There was much coverage some time ago about Romney’s tax affairs in the States. What almost all commentators simply could not understand was that Romney was actually paying proportionally more tax than his competitors. They all wrote the story the other way around as they simply did not understand the complex information they were dealing with.

4. It is interesting that all those who always wank on about human rights are the first in the queue to want to take them away from people they don’t like. I actually think politicians should be allowed privacy, whether for their financial affairs or their family or whatever. If not, we will end up stopping normal people from wanting to become politicians, ending up with dull, squeaky clean automatons with zero personality, history or ideas. We want politicians who are representative of our society not homogenised dullards.

5. We would also effectively stop anyone who is successful (ie rich) from running for office. We need these guys exactly because they are successful. But why would many of them want The Daily Hate screaming about their personal finances? They would not put themselves forward.

6. Now for the most important reason. Yet more personality politics. This harks back to the issue of ‘intellectual elites’. How many of us can explain Boris or Ken’s exact policy on transport, the police, the City, air pollution, planning, the GLA tax precept etc. Yet we all know about their personal lives, their tax status, their families, their extra martial affairs blah, blah. We need to know much more about what our politicians plan to do and much less about what they are like. This issue is a growing cancer in our political system. We are becoming more and more like America on this and that is not good.

The Powers That Bcc

What a hoo-ha about bugger all. ‘Surveillance Dave’ going back on his pre-election verbiage about civil liberties, according to that horrible combination of the opportunistic Left and the mad Right. As ever, the facts…

You will recall that Mr Cragsbury is a civil libertarian, so I am prepared for the odd crim to go free rather than impose serious curtailment to the rights of all. Some of my history on this issue is here, here, here, here and here. The state should never be given carte blanche or too much power. Hence, I was very against NuLab’s mad previous proposals for the Government to bug our email traffic at will and hold the data themselves. The current proposals are in fact very different.

For many many years, the Government has been allowed to listen to our telephone calls. They do this by requiring the telcom industry to hold data on when, where and from/to whom all our calls are made for a period of time, so that if they believe we are baddies doing bad things, they can check this info and then using that go (secretly) to court to get a legal order empowering them to then bug our calls. Very, very few of these legal orders are granted. Very, very few of us are ever bugged. This process is for suspected serious crims, terrorists, foreign intelligence agents etc. You and I need worry not.

Anyhoo, the volume of calls over the internet is exploding. And right now, the security services have very limited ways to investigate this, for example Islamic extremists in the UK on Skype chatting to their masters in Pakistan, Afghanistan, Iraq, Sudan etc.

Thus, all the Government wants to do is extend their existing powers on telephone calls to internet activity and most especially internet calls. Not an issue than we good people need worry about much but of course a wonderful hobby horse for the Dark Lord Dacre and all his malign minions to rant about in The Daily Hate, and perfect fodder for all good bandwagon hunting Lefties who want scare mongering and negative coverage of the Coalition.

Apologies

Mea culpa, mea culpa, mea maxima culpa.

I have been a bad blogger this week. A combination of work being (good) crazy, covering for other colleagues who are having babies/on holiday etc and, in the rare spare milliseconds, overseeing a small construction project at Cragsbury Towers.

Anyhoo, as the eldest Craglette used to say when she was about two: “I back now”.

A couple of posts today to make up for it.

The Greatest Story Ever Told

It's Sunday. It's late. Enjoy...

Desperation Politics

Brain donor of the week - Diane Hill who sustained 40% burns when attempting to decant petrol from one container to another in her own kitchen with the gas cooker alight.

Opportunist of the week - The man who wants to be our Chancellor of the Exchequer giving an interview and actually trying to blame Francis Maude for the injuries sustained by the woman.

Pathetic news organisation of the week - The channels which actually half ran with that story for a few hours. (Are you independent news organisations or the PR department of the Labour Party? Make you mind up).

Knobs of the week - John Mann MP, Karl Harris MP and Lord Toby Harris (all Labour) who called for Francis Maude to resign on the strength of this news story.

Interpreting By-Elections

Much arrant nonsense is always talked about by-elections, both before and after. Today was no exception. So I thought I’d give you…drum roll please…Melvin’s Top 10 By-Election Tips.

Tip 1 - In reality, by-elections are simply a referendum in one constituency on how the punters there are feeling about the Government on that given day. Thus, most by-elections are protest votes.

Tip 2 - By-elections therefore tell you bugger all about (a) the Government’s real (un)popularity, b) the Opposition’s real (un)popularity or (c) public opinion on any one issue.

Tip 3 - Melvin’s ‘rule of thumb’ is that sitting Governments usually get a kicking, the Opposition usually prospers and occasionally a small bunch of one issue loonies surprises everyone.

Tip 4 - If the Government candidate does well, however, then that is probably significant.

Tip 5 - If the Opposition’s candidate doesn’t do well, then this is also probably significant.

Tip 6 - If a loony third candidate does well, this usually means fuck all and normal order is resumed at the next General Election, with said loony disappearing into obscurity.

Tip 7 - If it is a safe seat, then most other main parties don’t spend much time, money or resources on it.

Tip 8 - The party which wins, claims “this is an historic victory which will change the mould of politics for all time”. It doesn’t.

Tip 9 - All parties try to use the result to damage the other parties, even if their own result is woeful eg “Well, David, we didn’t do as well as we had hoped (swing against of 90%, they lost their deposit and their candidate committed suicide at the count) but really the story of the night is that this is a truly terrible result for the x party”.

Tip 10 - Any truly meaningful impact of the result is always completely lost on the media.

So how did last night’s Galloway spectacular measure up, then?

Tories - Did badly, as expected. Not really a shocker for a Government in the middle of an austerity programme.

Lib Dems - Ditto.

Respect - Typical, horrible Galloway campaign playing to the young disaffected Muslim vote. He has one card and he plays it well. He will make some amusing speeches but will be an irrelevance.

Labour - What a shocker. They were either complacent or incompetent or both. Their once brilliant election machine is history. Too much time is being spent right now arguing internally about who should be sitting on which deck chair while the very unhappy good ship Titanic further embeds itself in the iceberg. Bad, bad news for Millipede Minor. If he can’t win a by-election in a half-decent Labour seat right now, after a truly horrible week for the Tories, even loyalists must be wondering when to wield the knife. Expect manoeuvres in this weekend’s press from the Blairites and Millipede Major.

Impressionable Elites

This last week has seen some really big news (eg the Coalition’s economic strategy seems on or perhaps ahead of target while the OECD predicts we’re in recession) and some unimportant but much overblown news (eg some future pensioners are going to be £300 a year worse off and ‘Pasty-gate’).

Why has the Commentariat focussed on the latter and not the former?

You need to read Mark Penn’s Microtrends to understand. Penn was Clinton’s favourite pollster. He’s a shrewd guy. His book is a fascinating and very easy read. He picks out some clear trends from all his polling data. One of my favourites he called ‘impressionable elites’.

This is the term he used for educated, affluent people who focus more on personality than issues when it comes to evaluating political decisions. His research shows that those at the top end of the population are heavily swayed by gut and impression, not numbers and facts. They vote more on the basis of personality in campaigns, they buy products more on the basis of brands and they invest more on the basis of a tip than on sound investment logic.

Conversely, rational and informed behaviour is more widespread through the now better educated working class - those who now can get to university, often now have ‘information economy’ jobs and use the internet.

His logic for this is that those at the top of our society really have never had it so good. They may moan, and may have less disposable income than a couple of years ago, but there is food on their shelves and petrol in their cars’ tanks. In short, they don’t have to struggle. Thus they have the time and space to be able to be interested in what colour tie the candidate is wearing or what his wife looks like.

Meanwhile, those at the bottom of the pile are still trying to get out of the shit heap. They could not give a toss about the candidate’s tie or the attractiveness of his wife, they want to know about his policies and how they will help them get out of the shit heap.

So, back to the beginning of this post. Why has the Commentariat focussed on ‘Pasty-gate’ and not the Coalition’s economic strategy and the OECD?

Well, of course, journalists to a man all come from ‘impressionable elites’. Which is one reason why we get much too little sensible and objective news and way too much trivial nonsense.

Nightmare on Ken Street

Sometimes politicians do dumb things. Sometimes politicians make mistakes. But it’s not often a politician seems to have a complete death wish. Welcome to the mad mad world of Ken. Some examples from the last few weeks:

Ken caught lying.

Ken caught insulting Jews.

Ken caught insulting gays.

Ken keeps promoting his over close relationship to London Islamists.

Ken defends taking Ahmadinejad’s money.

Ken avoids taxes.

Ken’s behaviour driving his own supporters away here and here and here.

Ken becoming an embarrassment to his fellow Lefties.

And all this in the last few weeks, the weeks before the London Mayoral elections. You could not make this up. This is the sort of list of events that if it was in a film we would all sit in the cinema saying: This is so unrealistic. It would never happen. No one is that stupid.

Prediction: Boris will win handsomely. Ken will never again be supported by the Labour Party nationally.

Crisis? What Crisis?

And so fake outrage at political fundraising once again breaks out. It’s like Groundhog Day. Soooo dull. This one comes around as regular as clockwork. And all the Shock! Horror! faux bullshit from Labour, the party which gave us cash for access (again), cash for honours, changed Government policy on tobacco advertising after receiving Mr Eccelestone's £1 million and - to keep this list very up-to-date - the secret Millipede/Roland Rudd meeting with business leaders, the Opposition's voting list being actually written by the unions etc, I could go on and on but won’t. Anyhoo, the facts:

We already have limited funding of political parties by the taxpayer. It’s called ‘Short or Cranborne Money’ and gets dished out to the opposition parties in both Houses roughly in proportion to their number of seats. But this is as far as all right-minded people want to go. We should never propose taxpayer funding of political parties direct. We all have an interest in Parliament functioning properly but not in funding political parties’ election leaflets. You want to win elections? Then produce a manifesto that people want to fund and vote for.

The Tories always attract funding by business. This is not evil, Lefties. This is because they have policies which are business friendly. Labour always attracts funding by unions. This is not evil, Righties. This is because they have policies which protect unions. And no fucker gives the Lib Dems anything much because mostly they talk vague twaddle.

This is called democracy, children. I like your policies, I give you money. Simple. If you want more money, give me some more policies I’ll like.

Question - What is wrong with senior business people meeting the Prime Minister, or any of the Cabinet for that matter? Moreover, what is wrong with senior union leaders meeting the Labour leader? Or vice versa indeed?

Answer - Nothing.

Again, this is called democracy children.

What you can’t have is an un-level playing field, where your supporters are allowed to fund you but my supporters are not allowed to fund me.

For the record, if I was giving £250,000 to a political party, sure as fuck would I want to meet its leader to tell him what he was doing wrong! I might even want a blow job from his wife/mistress thrown in for good value. And of course, our American cousins just laugh at how cheap we are. Obama, Romney and the assortment of Republican weirdoes in Primary mode would just laugh at these pitiful amounts.

Our system is not corrupt. I have worked in Brussels, I can tell you about real corruption. Yet we make such a meal about these piffling issues.

Putting aside Labour’s endless childish attempts to try and skew that playing field in their favour, we actually need business and union leaders to all have access to Government. Otherwise politicians who have never run a business or union will do some very dumb things. And the Law of Unintended Consequences will apply on almost every piece of legislation. That is why lobbying is a force for good, children, despite what journalists of either colour will tell you.

Everything You Need to Know About Labour and the 50p Top Rate of Income Tax

(Apols - Blogging's been light. Been a bit of an ill and flopsy mopsy bunny rabbit).

Anyway, Labour had 13 years to increase the top rate of tax from 40p to 50p. They did nothing for 12 years and 11 months.

As they were about to be voted out of office, they increased the rate to 50p as a political gesture, simply to screw the Tories around.

At Budget time, they wanked on and on about how it shouldn’t have been reduced and how they would reverse it.

But last night they abstained on the vote on that clause in the House.

As ever, lying duplicitous political bastards.

Economics is Fun - Specialisation

After Budget week, let's let Madsen Pirie entertain us:

How Was It For You?

So, the budget was partly depressing and partly really good news. First, the depressing bits.

Every year I am amazed at how the Commentariat miss the point. They always fixate on one or two issues of detail and completely miss the big picture. They disappear off into the weeds, usually led by the Opposition of whichever political colour. This year they are gorging on the so called Granny Tax and new 45p top tax rate, two reasonably modest elements in the overall picture. The media are absolutely sucking up Labour’s empty agenda. It’s risible. The world is still coming out of economic meltdown and all Labour can find to talk about is a future tax allowance reduction for future middle income pensioners? Is that your main beef, Ed? Really? So everything else is fine then?

And why oh why can the Coalition never get its presentation right? Have they learnt nothing from the NHS reform debacle? They sorely miss an Alistair Campbell figure who innately understands how to present their agenda and can ‘deal’ with the media. Every fucking initiative bar one was leaked. (The problems of competing agendas in a coalition government, maybe?) And the one initiative that wasn’t is what the Left are lying about and exaggerating to death, with a benign media drinking their ludicrous spin. Sort it out, Cameron et al.

Granny Tax – The Facts

The basic personal allowance is climbing and so will overtake pensioners’ additional personal allowances. So something needed to change. And as the IFS has pointed out, pensioners have done pretty well out of the Coalition, suffering much less than the rest of us with generous increases in their pensions. Take your pain, wrinklies. This is a future reduction that will affect future pensioners. From Labour’s briefing which the media have hoovered up you would think that Boy George had actually taken cash away from pensioners as of today. And frankly, one rate of personal allowance for all seems fine now that the rate is going to be so high.

45p Additional Rate – The Facts

Mistake. This was the trap left by Gordon that Georgey Boy had to deal with. We should take all the pain now, down to 40p in one go, otherwise either (a) you continue the pain of the next 5p reduction into one or both of the two budgets left before the election or (b) we get beached on 45p, which isn’t low enough to make us internationally competitive.

Now for the good stuff. Overall, this was a good budget.

The really big news - Unemployment and inflation revised down and UK growth revised up while Eurozone growth is heading the other way. Nice. We're borrowing less and the deficit reduction is slightly ahead of target. A clear focus to stimulate growth by lowering corporation tax and the top rate of income tax (although by not quite enough as already mentioned). All good. Melvin is very happy.

The quite big news - Personal allowances on course towards £10k and the child benefit plan reworked and thus less painful. Good stuff. Personal tax statements will be a game changer in media and public opinion terms when they come in. Trust me on that. When all taxpayers see how much of their hard earned cash is being wasted on crap, there will be a more aggressively focussed view on high spending governments. The foreign rich are being soaked on expensive house purchases which is fine but the Lib Dems’ £2 million mansion tax is not good. This will depress the £1.5- 2.5 million housing market. If they can’t move, then others below them can’t move and so it goes on down the chain. And this will be a problem.

The small print - Future pensioner shit already talked about. Fags and booze - who cares?

He didn’t do everything I wanted him to do, but overall it was a credible job. He's quite a canny one, young George. They just need to sort out their presentation. Fast.

No post today...

...need to digest Boy George's words.

Melvin's Budget

(Long post today, collated and written over many days. Enjoy).

‘Medialand’ is of course fixated on the Budget day announcements. This budget is important, as I said here, because this is the last budget that will have any affect before the 2015 General Election. The impact for the first time of a ‘fixed term’ Parliament is important here. Normally, right now, Boy George would be having to run both a ‘go early’ strategy and a ‘full term’ strategy. The ‘go early’ option always used to pressure Chancellors to start the great give away sooner than was really sensible. Boy George has no such problem. He can afford another year of pain before two giveaway budgets in 2014 and 2015.

Many things the Coalition has done have had my full support. But if I have a fundamental criticism of them it is this: because of the shocking state that Government was in when they inherited it, and the depth and immediacy of the financial crisis we were all in, they have concentrated exclusively on the ‘here and now’. This Budget is the time to show the long term plan. Where do we want to head; what is our destination? We need the short term changes required of course, but set out against the backdrop of - to use a Tony Blair term - ‘the narrative’. You can only hit the punters with the stick for so long before you have to show them the carrot or else they start complaining.

So this is the Budget for Boy George to show his direction of travel upon which the Tories will fight the next election. He should be saying:

“Government cannot solve every problem. Individuals can mostly solve their own problems. The previous 13 years of the Left’s misguided faith in ‘Government action on all fronts’ has meant that Government has got too large, too bloated and, as ever, is terribly inefficient. We have looked for too long for Government to solve every injustice, every crisis, every problem.

“This has meant that it has taxed too much and borrowed too much to try and pay for everything it has tried to do (mostly badly) and that was one of the fundamental reasons our recession has been so bad compared to many other nations.

“And yet, we are still spending more than the taxpayer can afford. We still need to trim the size of Government. We need to decide what the Government actually does and what others are better at doing. Government needs to do less and do it better.

“And, most importantly, we are a low tax party. And we will progressively reduce taxes for all. We believe that people should keep their own money as they are almost always better equipped to make the right decision for their family on how to spend it for their benefit.

“So by 2020, we plan to have cut Government by x% and increased its efficiency by x%. At the same time we want to ensure anyone earning £12,000 or less pays no tax at all. And our top rate of tax should be under 40% to make us really internationally competitive. And this Budget sets us on that course.”

I’d love him to say that, but he won’t of course. Nevertheless, I am going to ignore all the Budget small print so efficiently leaked these days and concentrate on some of the bigger stuff I think he should be including.

What should the Government’s strategic economic priorities be?

First, pay down that deficit as fast as possible. Funding the interest on Brown and Ball's debt is costing us taxpayers around £50bn this year. That's about 7% of all Government spending. More than we spend on defence (£40bn), law and order (£33bn) and transport (£23bn). Madness. Thanks, Labour.

Second, aim to balance the national budget as soon as possible; that is, spending each year no more than we collect each year from us taxpayers. This year we are borrowing around £127bn to balance the books. Behind income tax (£158bn), but ahead of National Insurance (£101bn) and VAT (£100bn), borrowing is still the second largest source of income for our Government. Thanks Labour.

Third, as a fundamental matter of principle, plan thereafter to run a budget surplus over the term of each Parliament. Forever. Forget over borrowing. Keep us in the black. This means that we will always be prepared properly for the next recession and never be anything other than a AAA rated country. It also gives us the ability to do other things listed later in this post.

Rebalancing government spending

Our top 4 spending budgets are social security (£200bn), health (£126bn), education (£89bn) and defence (£40bn), (putting aside Brown and Balls’ £50bn debt interest as mentioned above which is the 4th highest spend in Government). This is completely out of balance. We are spending way too much on social security and health and way too little on defence and infrastructure - roads, rail, energy etc. This has to change.

To be fair to the Coalition, they have started well with IDS' re-engineering of social security and Lansley's much (unfairly) derided re-engineering of health. But much much more needs to be done here. To take one simple example, the DWP announced last week that 71% of disability benefit claimants either have no reason to be on the benefit at all or could work with some assistance. And that’s just one benefit. And don’t get me started on the NHS which always reminds me of that famous Ronald Reagan quote: “Government is like a baby: an alimentary canal with a big appetite at one end and no sense of responsibility at the other.”

Meanwhile our defence budget is in tatters. We are now a third world defence nation with second world needs and first world aspirations. We are building a couple of massive aircraft carriers but cannot afford the planes. Thanks Labour.

I don't know exactly what the right percentages are - greater minds than mine can work that out - but we need to rebalance departmental spending badly. We are currently spending around 2.7% of GDP on defence. Countries like Botswana, Chile and Morocco spend more than that. It’s pathetic. Thanks Labour.

How to pay for all this?

The cold hard truth is that until the deficit is under control, now it not the time for tax cuts, however much the Tory Right and business bleats. Any give aways tomorrow should be fiscally neutral ie should not increase or decrease spending or tax.

Let’s now cover that thorny issue of the 50p tax rate. This is very simple to deal with. As a matter of principle and good practice, no tax should cost money. All taxes should raise money. This tax costs and thus has to go. It’s pointless. It was a political not an economic initiative carried out as a cynical act the month before Gordy left office and expressly to make life uncomfortable for Boy George. And in that aim it has worked. But it’s loony. It depresses the money HMRC earns exactly when we taxpayers need HMRC earning more. Madness. Thanks Labour.

Georgie Boy will want to go for 45p first so that the Lefties can’t whinge too much. The problem is we may get stranded at 45p if the wind changes in the future and 45p may not change the rich’s behaviour. Remember where we are on that horrible league table of top rate income taxes. 45p doesn’t help us much. It is making us an unattractive investment target. It should go altogether. It makes no economic sense to keep it.

And on the subject of tax cuts, as I have said before, the only tax cuts that deliver growth are income tax top rates - that pesky 50p again - CGT and Corporation Tax. If we need growth, these are the ones to target, not basic rate thresholds (Lib Dems) or VAT (more Balls). The OECD agrees so I'm in good company.

The pay and rations of the public sector is already being squeezed. I’m afraid there has to be more. National pay is illogical and has to go. The indefensible union logic that public sector pay should be the same in Newcastle and Knightsbridge is risible. (This also nicely kills the unions’ endless strike ransoms at a stroke. Add to that slaying all the Pilgrims and listing unions as lobbyists. Mrs T would be proud, George).

And we need a new era of privatisation. Governments are always hopelessly inept at running services as the dead hand of expensive bureaucracy ratchets up the cost. Either sell off or transfer service delivery to those that are much better at it - the private or third sector. Don’t just stop at the Royal Mail. Be radical.

Now my reading of Jim O’Neil’s latest book has taught me a little about Germany’s success. Germany’s stellar growth in recent years is very seriously reliant on a clear strategy to manufacture and export to China and India. As China and the other BRICs shift from being cheap manufacturers of our consumer products to being consumers of their own products, we need to cash in on their new found wealth. Third World cheap mass manufacture has killed our manufacturing sector. But we have a hidden gem: precision high tech manufacture. We need a planned and targeted incentive regime to massively grow that sector fast because all those BRICs are soon going to need our high tech exports, just like right now they need BMWs.

A final thought: we need a UK sovereign wealth fund. We need to generate investment income just as China, Abu Dhabi, Qatar, Norway and all the rest. We can’t do that now, but we need a plan for it sometime soon.

Pre-Budget Fact 2

Depending on which estimate you believe to be more accurate - HMRC, OBR or the IFS - the Additional Rate income tax rate of 50% for salaries above £150,000 reduces the Government coffers by between £300 million to £1 billion (ie it’s a cost not a gain - look out for this analysis in Boy George’s Budget speech).

Pre-Budget Tax Fact 1

Does Boy George have any room for manoeuvre?

Tax income 2010-11 - £450 billlion.

Tax income 2011-12 - £590 billion.

Go figure.