It's that time of the year when, having over-indulged over the holiday period, we promise to do better over the next 12 months. Our political leaders have over-indulged for a good deal longer than just a few days, and we can see the cost in the state of the public finances and falling standards of living for most people. So here are a few New Year’s Resolutions which, if they made it into the party manifestos for the coming election, would leave us all feeling healthier.
Bring transparency to taxation
Let’s end the pretence that national insurance is anything other than another form of income tax. It long ago stopped paying for specific benefits and now goes into the general taxation fund. It is time to merge national insurance with income tax, rather than diverting attention with misleading headline cuts in rates.
Honesty over debt and the deficit
Transparency on tax would increase pressure on politicians to use public money wisely. But they also have to come clean about how they will tackle the terrible state of the public finances. Rather than vague promises from all parties that the deficit will be eliminated and debt slashed, the electorate deserves to know how this will be achieved. And how, if tax cuts are promised, they will be afforded.
Lift those on the minimum wage out of tax
It is scandalous that the Exchequer still siphons off tax from the lowest paid. The threshold for national insurance is £2,000 below the £10,000 starting point for income tax. Raising the threshold of the newly-merged national insurance and income tax to the level of the minimum wage would correct this abuse. As a first stage, the starting point for national insurance should be raised to the income tax threshold.
Shift the balance from taxing jobs to taxing profits
Let’s raise the threshold for employers’ national insurance contributions too. This will pay for additional increases in the minimum wage and encourage firms to create more jobs. The cost can be met with a slight increase in corporation tax. The balance has moved too far to taxing jobs rather than profits.
It’s education, not immigration, that’s the problem
Let’s stop obsessing about immigration. It’s not new immigrants stopping poor white males getting jobs, but their low achievement at school and their low aspiration. This group, the worst performing at GCSEs, is let down by a lack of focus on their education and future.
Engage with Europe, don’t withdraw
Europe is our biggest market and a major part of our future. We would be stupid to walk away. We should be looking for allies in Europe to reform it so that it can deliver better for all its citizens, not always throwing our toys out of the pram. There are plenty of countries that share our views. We should be making friends, not threatening them.
Recognise the Cold War is back
We need to accept again that the interests of the West and Russia are in conflict but, just as we did before, find a way to live with this reality. It is no good wishing Russia away or ignoring its strategic interests. The country has shown it will fight to protect them. The West has both been too casual in threatening Russian interests, and yet too disunited for the Russians to fear an effective response.
Accept that climate change is real
The scientists aren’t making it up: temperatures and sea-levels are rising. And it is clear that our activities are largely responsible. We owe it to future generations to be much more serious about reducing carbon emissions. If China, whose development is still well behind Europe and North America, can take it seriously, so should the West.
Develop a sensible long-term energy policy
We need an energy policy which cuts emissions, delivers security and keeps down costs. But we are a long way from any of these goals at the moment. Onshore wind and solar are already the most cost efficient forms of energy and they are going to get even cheaper. We should be expanding them, not cutting support or subsidising expensive offshore wind, unproven shale gas production or nuclear power.
Find a storage solution for renewable energy
German politicians provided the financial incentives to ensure that their renewable energy ambitions became a reality. We need the same effort and investment so we can tap into the energy of the sun 24 hours a day. Just imagine how African development could power ahead if we store solar energy. We need an international drive to find this Holy Grail, which is far more important to the world than intergalactic space travel.