Almost since the UK's EU Referendum in June 2016 and particularly
after the June 2017 General Election, the UK was in political stasis, which
appears to have ended as a result of the December 2019 election.
Proper democracy is wonderful (as opposed to rigged
democracy) and the UK is a good example of proper democracy; although this is
arguable in the period from June 2017 to December 2019. More on this later.
The Conservative Party’s win, on the 12 December 2019, was
emphatic. This gives rise to two
opposing issues; firstly the Government can proceed to govern plus, perhaps
more concerningly, the Opposition was decimated, meaning scrutiny of the Government
will probably be insufficient.
What does the result tell us?
1) It’s difficult to disagree with the conclusion
that the result gives the Government a mandate to enact the UK’s withdrawal
from the EU. I’d be surprised if any
politicians think another referendum on EU membership is likely. The parliamentary Anti-Brexit programme,
which gained steam after the 2017 Election, has run its course and many of its
supporting Members of Parliament (MPs) have been voted out of their
constituencies. The Anti-Brexit
programme was essentially undemocratic in that MPs worked actively to delay and
ultimately try to prevent the enactment of the result of a nationwide democratic
vote. Some of the reasons given for their
behaviour actually annoyed people who had voted to remain in the EU. It appears that quite a lot of voters
correctly identified the undemocratic behaviour and used the election to cast
out these politicians.
Politicians are not the smartest
people in the World so, for future reference: The result of a nationwide referendum, once
accepted by the Government, is not something any MP should try to prevent or
hinder. If an MP voted for the losing
proposition and cannot support the winning result; they should resign. If they actively work against the winning
result they should have the Whip removed and be de-selected from their party,
irrespective of whether they are in Government, or not.
2) The Election result was also an emphatic
rejection of the Labour Party’s leadership and manifesto. Just imagine what could have happened if the
Labour Party, actually going into the December 2019 election, was the one lead
by Tony Blair in the run up to the 1997 election. The short answer is that the Conservatives
would not have a large majority, if any. So, Labour’s personnel and policies handed
the Conservatives a windfall. The actual
result doesn’t mean the Conservatives are in any way superior, let-alone more
competent politicians! I do have some
sympathy for Labour supporters who know that long outdated Marxist, Socialist
ideologies failed in the UK in the 1960s and 70s (and then largely in the rest
of the World, after this). Mr Corbyn’s
& Mr McDonnell’s ideologies simply don’t fit, or work, in the modern
world. If enacted, policies such as
punitively taxing the rich, nationalise industries or grab company shares,
would ensure companies and entrepreneurs avoid the UK thereby reducing employment,
tax revenue and GDP. In short, a
disastrous economic approach.
It’s worth remembering that a
Government needs tax revenue, which comes from businesses, consumers and
workers. When politicians say that rich
people should pay more tax, a lot of people readily agree. However, a person with a salary of £1 million
per annum, would pay nearly £459,000 in total payroll tax (47% of Gross
Salary), compared with £8,656 tax for the Median Disposable Income case (23% of
Gross Salary). For more detail, see the table of salaries
and tax contributions at the end of this Blog.
As a Government, would you rather have the £459,000 tax revenue, or
not? If your tax policy causes one
person with a salary of £1 million per annum to leave the country, you would
need approximately 53 new workers earning a gross salary of £38,100 per
annum, to make up the shortfall.
So, the old socialist ideology of
taxing the rich simply doesn’t work; the rich leave and the rest have to pick
up the tax bill and/or suffer reduced services, as the Government has less tax
revenue. It doesn’t need any rocket
science to see that, the more very highly paid workers there are, the greater
the tax revenue, potentially leading to reduced tax rates on the lower paid and more money for services such as the NHS, social care or pensions. The Labour Party don’t appear to understand
this.
3) The Liberal Democrats failed to make a
significant impact, largely due to pinning their fortune to being
Anti-Brexit. In The Economist issue
ahead of the election (see the web-link for the article at the end of the Blog),
their leader-writer couldn’t support the Conservatives or Labour; preferring
the Lib-Dems because of their Anti-Brexit plus economic policies. It appears voters weren’t enamoured with
either and the Party Leader lost her seat and has resigned. I find it quite ironic that a party called
Liberal Democrats stood on an anti-democratic platform, albeit with some
pragmatic ideas on tax, spending plus the environment. Will the Lib-Dems understand their
anti-democratic naivety and re-build in time for the next election?
4) Lastly, the Scottish Nationalist Party (SNP). I am certain their increase in MPs will be
taken by the party leadership to mean there is even stronger support for independence;
that’s the easy logic. But, context is
key. Scots who voted to remain in the EU
may feel betrayed by the result of the Referendum (no democratic closure here),
which the SNP consistently keeps at the front of the mind.
This mind-set is unable to accept or get behind the country-wide EU
Referendum result and move forward as the United Kingdom. Nationalism is a potentially dangerous
characteristic. In terms of Scotland,
the SNP are in effect saying that they would be better at setting-up and running
an independent Scotland than previous and current Scottish MPs have done within
the United Kingdom. You can look at the
SNP’s record on running the devolved government as an indication of their
ability to run an independent Scotland.
Are the SNP any better? Probably
not.
With a population of around 5.5
million, the only comparable-size modern countries are Denmark, Finland, Slovakia,
Ireland, Norway and New Zealand. The small,
established EU countries are effectively locked-in and unlikely to change. Norway is unique in terms of resources and
New Zealand is long established in the Australasian, west-Pacific and wider global economy. So, it’s unlikely Scotland could improve
economically as a totally independent country, outside the EU. Even within the EU, it’s likely that personal
and business taxes would rise above what they are now, plus services decline,
as tax revenues drop. Scots should (and
probably do) realise the pros and cons of independence; it’s extremely risky to
extricate yourself from the 1707 Act of Union, let-alone set up a new country
and then start the process of joining the EU.
All for what?
The Undemocratic Democracy
You can argue that democracy in the UK is well-established, functions
well and has little corruption. You
could also argue that in the period between the EU Referendum and the December
2019 election that democracy was high-jacked by MPs who disagreed with the
result of the EU Referendum. This was
actually facilitated by the Conservatives dismal election campaign in June 2017,
giving rise to their minority Government.
The fact that the previous Government relied on an
arrangement with MPs from the Democratic Unionist Party, plus its own internal
discontent, allowed EU “Remainer” MPs to mount an undemocratic assault on the
Government. Coupled with the
Government’s own internal issues, the enactment of the referendum
result was stalled. With the emphatic win for the Conservatives in December 2019, the “Remainer” tail is no longer
wagging the dog; democracy has been restored.
Whether MPs properly understand what their democratic duty, towards a
national referendum, should be; remains an open question.
The good news for the UK is that there is a Government that
can now govern. The bad news is that the
size of the majority and the decimation of the Labour Party means the Government
is able to implement policies which could be poorly constructed. Ideally the UK would have benefitted from a
majority of approximately 25; comfortable, but not too comfortable for the
Government.
Is the new Government any better than the previous one? Almost certainly not; however, you can be sure
they think they are; simply because of the size of the win.
Prepare to be disappointed.
Salaries & Taxes
Below is a table showing what Pay As You Earn tax amounts
to, in the 2019-20 tax year, for tax-payers in England, Wales & Northern
Ireland, on a range of gross salaries.
Scotland has different payroll taxes.
The Net Salary numbers were derived from: https://www.thesalarycalculator.co.uk/salary.php
Case
|
Gross Salary
|
Income Tax & National Insurance
|
Net Salary
|
Tax Percentage of Gross Salary
|
Additional Tax Over & Above a £38K Gross Salary
|
£20,000
|
£2,864
|
£17,136
|
14%
|
||
£30,000
|
£6,064
|
£23,936
|
20%
|
||
Median
Disposable Income in 2019 (£29,400)
|
£38,100
|
£8,656
|
£29,444
|
23%
|
£0
|
£50,000
|
£12,464
|
£37,536
|
25%
|
£3,808
|
|
Approx. Mean MP
Salary
|
£80,000
|
£25,064
|
£54,936
|
31%
|
£16,408
|
£100,000
|
£33,464
|
£66,536
|
33%
|
£24,808
|
|
Approx. Prime Minister
Salary
|
£150,000
|
£59,464
|
£90,536
|
40%
|
£50,808
|
£500,000
|
£223,964
|
£276,036
|
45%
|
£215,308
|
|
FTSE100 CEO
|
£1,000,000
|
£458,964
|
£541,036
|
46%
|
£450,308
|
£5,000,000
|
£2,338,964
|
£2,661,036
|
47%
|
£2,330,308
|
The Economist’s 5th December 2019, UK edition has
a leader entitled:
“Our Election Endorsement
Britain’s nightmare before Christmas
A divided country faces an election that will tear it
further apart.”
Have a read and enjoy the benefit of hindsight.
