It’s a little like discussing “sex in public”. So says, of all people, the grey-suited, white- haired and usually rather restrained Alistair Darling. The former Chancellor is not, I should make clear, talking about making love in a public place. He’s comparing the awkwardness of talking openly about sex with the difficulties of having a candid conversation about “it”. The “it” in question is “tax” – where it comes from and where it goes; the subject of BBC2’s Your Money and How They Spend It.
Misleading us How right he is. Over the years politicians have been not just coy but positively misleading in their desire not to talk in front of the children about how much of your money they want to tax and spend. On 29 November, as the Chancellor delivers his autumn statement, I will sit under hot studio lights with a curling BBC sandwich trying to interpret his words. Some bits will be simple to understand.
The economy’s going to grow slower than he hoped if, that is, it continues to grow at all. And the deficit will not be cut as fast as he’d planned. So far, so easy. The tricky part will be specific policy announcements.
For politicians, ignorance is all too often bliss – our ignorance; their bliss. In Gordon Brown’s last few words of his last budget as Chancellor – back in 2007 – he stunned his opponents by announcing a 2p cut on the basic rate of income tax. Moments later, David Dimbleby turned to me for some instant analysis. I asked the right question – “What we don’t know is how this will be paid for?” – although I didn’t know the answer to it.
Nor did anyone else until weeks later when some of the poorest people in the land realised that they’d be paying several hundred pounds each more in tax thanks to the scrapping of the 10p tax band. It was Alistair Darling, Brown’s successor at Number 11, who had to buy off the revolt that followed at the staggering cost of £163.6 billion. He tells me drily: “If something looks too good to be true, it probably is”.
It’s a motto to bear in mind when you examine how government is taking and spending your money. It helps explain why more and more people on higher incomes are paying higher-rate tax without the inconvenience of government announcing a tax rise. The tax thresholds are regularly not increased in line with inflation. It helps explain why Tony Blair could sign a promise not to increase income tax rates and then increase another tax on incomes – national insurance.
Tax by any other name
Market research has shown that voters thought that national insurance was just that – insurance – when, in fact, it’s just another tax that fills the government’s coffers. That’s why VAT – which was unveiled as a “simple tax” is now mind-numbingly complex and baffling. For instance we pay it on our chocolate digestives but not on our chocolate-chip cookies or Jaffa Cakes. Don’t ask me why!
If you find all this obfuscation as downright infuriating as I do, then join me in my quest to persuade our politicians to unbutton and let it all hang out – to treat us like adults and spell out in plain English who they expect to pay what when they need to raise money.
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