It has become obvious that no-one can foresee the future anymore and no particular economic theory can cope with the crises, which, by the nature of our civilisation, occur more frequently.
The old systems no longer work so what is needed is a pragmatic way of dealing with problems and efficiency, which can be altered to cope with crises as they occur.
This idea, plus other suggestions, is expanded under the following headings:
A solution to the present crisis.
Elimination of the morally corrupt and incompetent politicians;
Eradication of “Fat Cats”;
A better Society;
A sensible Foreign Policy;
Greens, CO2, etc.
No more doctrinaire policies – only pragmatic solutions in a real democracy.
A SOLUTION TO THE PRESENT CRISIS
To end Tax Avoidance
At the time of writing, the National Debt has grown enormously. A simple and effective solution to this problem would be to eliminate tax avoidance and tax evasion.
The Liberal budgets before the First World War introduced the death duty tax on large estates with the object of breaking up the large holdings of a small number of Dukes, etc. However, a good proportion of the wealthy have avoided tax by employing talented professionals. The commonest vehicle is ‘The Trust’. As a result, a recent survey shows that the rich are getting wealthier.
Theodore Roosevelt stated that the transmission of enormous wealth to young men does not do them any good and he wanted to apply Inheritance tax to large fortunes. Many wealthy people over the years have realised that it often ruins character if a person does not have to work for a living and that a heavy Inheritance tax is in everybody’s interest.
Taking these facts into account, the solution would be to have a maximum income tax of 20% and capital transfer tax over £1,000,000 of 95% or over, which would apply to all trusts (which are not real charities) every 30 years, applicable immediately to all trusts over 30 years old.
This measure alone would raise enough money to solve the present crisis and pay off part or all of the National Debt.
The amount of revenue lost worldwide through Tax Evasion is huge. The solution to this cannot be quick or easy.
The European Union, United States, Japan, etc., should agree new International regulations so that all countries disclose to other governments details of all accounts held for foreign nationals; also data regarding beneficial foreign ownership or control of all companies, trusts, etc., with severe penalties on their citizens for non-disclosure. Heavy financial penalties and/or sanctions would be applied to countries that do not comply and to countries still dealing with the tax havens. A month’s amnesty could be offered as … without accounts could be declared or …., which, combined with the projected lower tax rate would be attractive. In addition, it should be possible to extradite tax offenders to Democratic states as long as it is crystal clear that they would have a fair trial (alleged tax offenders from dictatorship countries should be tried in a neutral country to ensure the allegations are not politically based).
The principal benefit of this would be to greatly reduce corruption in the Third World, probably saving a least one million lives a year.
With the National Debt eliminated, a move to a balanced budget with a top rate of income tax of 20% and initial VAT of 20% should be possible in three to four years. The road tax should be applied to the roads. Also the population under, say, 45 years should start individual pension funds, with the employer contributing.
At the beginning of the twentieth century Lloyd George attempted to introduce Inheritance tax as a means of reducing large fortunes, etc, which was largely ineffective as the wealthy employ professionals to avoid this.
A suggestion would be to have a threshold of £1,000,000 per child; over this figure the tax to be 100% or just under. Obviously to make it practical the personal transmission of items over, say £50,000 per year outside the UK should also be taxed.
Trusts and other tax avoidance vehicles should be taxed on a similar basis every 25 years unless being used for charitable purposes.
What would be the effect of these measures?
Firstly, if Trusts were subject to immediate retrospective tax there would be a massive sum raised, which should eliminate the National Debt, saving billions in interest. This should enable a flat income tax or company tax of 20% with no allowances with an income tax threshold of £5,000 p.a.
In 2010 there is no need to describe in detail what is wrong with our M.P’s!
In the previous generation most M.P’s went into politics out of a sense of duty or a strong desire for social justice, etc. An increasingly affluent society seems to result in the motivation changing to be either an ego trip or an “easy way of making a living”, or both.
Any attempt to impose conditions on a person standing for Parliament would normally be anti-Democratic. Possibly a clause making it mandatory to have been in local government for a number of years could help?
Otherwise voters should only choose a political party if it makes it crystal clear what each M.P. receives; his net worth and it insists on a very high standard of conduct.
Salaries should be fixed at about three times the average wage for a five day week (one day in the constituency office) with overnight allowance of, say, £100 for M.P’s more than 50 miles from London. Secretarial services and a staffed Constituency office should be provided by the Civil Service.
ERADICATION OF “FAT CATS”
Shareholders now have very little influence on large corporations so that the top Directors often get far too much of the profits made by lower and middle management. Often much time is spent on jockeying for position and influence and not on increasing profits.
Competition should be encouraged and the law on cartels, etc., should have similar penalties as the U.S.A. In other words, the Directors, if guilty, go to prison.
Public companies and large private companies should have one or two staff members on the Board.
Net profits should be divided, as follows:
20% Government (instead of Company Tax)
30% Staff bonus
20% Research and Development or, if not possible, the price of the product or service.
The ratio between the top and bottom levels of staff salary should not be more than 1 to 30, e.g. £10,000 to £300,000 with no share options or bonuses, except as above. Directors would not receive any form of compensation if the company has lost money. Compensation of any sort not covered by the above should be taxed 100%.
A BETTER SOCIETY
There have been several post-war surveys of the developing world, which showed that happiness did not necessarily relate to income, although increasing the nation’s wealth is necessary for improving education, the health system, etc.
The pillars of a contented society are:
- Low crime rate;
- Good education;
- Efficient health system;
- Adequate Pensions
- Full employment.
Some suggestions to achieve this:
The nineteenth century objection to a national police force was on the grounds that it would lead to a dictatorship. This is surely no longer valid. Combining all the English county forces would increase efficiency.
It also seems a waste of time and money to train a policeman and then employ him on trapping speeding motorists. Most traffic offences should be handled by a new body (traffic police?), including Traffic Wardens, etc.
Much of the increase in crime is due to drugs. The present methods to reduce drug taking seem to be ineffective. An experimental two or three year period of making all drugs freely available under suitable controls would be worth trying, even if it did not reduce the number of addicts immediately, it would certainly reduce crime.
Many of Britain’s cities are blighted by graffiti and rubbish. When one looks at the miles of railway lines daubed with paint within a mile or two of Parliament, it illustrates the inefficiency of the present Government.
The New York policy of zero tolerance should be applied. Another example is Singapore, a spotless city with the same litter laws as England, a fine of about £50. The difference being in that in Singapore the law is applied.
Asylum seekers should only be admitted from counties that have been listed with citizens at risk. It would be more human to establish proper camps near the country, e.g. for Zimbabwe in South Africa, Mozambique or Zambia.
Visitors outside the E.U. would have to agree on arrival to immediate deportation if they over stay their welcome. All aliens with residency permits or naturalised UK citizens should carry an identity card.
Much more attention should be paid to preventing first offenders becoming permanent criminals.
The solution to most problems is rooted in Education.
As a general observation, the present system is still partly organised to produce the professional qualifications for Doctors, Lawyers, Civil Servants, etc., and children (80%) who do not qualify feel they have failed before they left school. It was hoped that the comprehensive school system would change this but has only been partly successful.
Most children have a talent and the system should identify this and educate and train the child for the right job.
Students going to Universities should be encouraged to take ‘difficult’ degrees such as Medicine, Engineering, Science, Computer Studies, etc., by having their grants doubled.
At the primary level much more emphasis should be placed on citizenship and morality.
As the press constantly points out, there are problems with the service, too much bureaucracy and Government obsession with statistics.
The best solution may be to switch to the French system and also encourage prevention by doubling the contributions of the obese, smokers, etc., and reducing it for others with a healthy life style.
Looking at reviews the history of the British Empire, one is struck by the fact that one quarter of the world’s population was content to be governed by a very modest number of administrators and military forces. The reason may have been an independent system of justice and it is interesting that the European Court of Justice is widely accepted in all countries of the European Union.
International justice via the United Nations is flawed due to the major powers being able to block any action if they perceive it being against their own interests.
The long term policy should be to establish an International Court whose decisions will be binding in all international disputes with a security force under the control of the court.
The idea of Federal world or even regional government looks attractive to idealists but in practice all nations wish to govern themselves; however, most would accept an International court for disputes, etc.
The European Union will continue to be a success provided the commission is under democratic control. Possibly a two chamber parliament with elected members in one and national representatives in the other.
The Economic Union should expand over the next decade to include Russia and countries outside Europe, such as Japan, Australia, etc.
Establishing a proper International court opens the possibility that over the next century it would be universally accepted, ending national conflicts.
Ambassadors were necessary when letters took weeks to reach London. With modern communications the present system is obsolete. Much of the diplomatic time is spent in a sterile round of receptions and dinners. All that is needed is a centre for gathering and distributing information, plus a Consular Section for issuing document and looking after distressed nationals.
Tariffs and a Democratic levy?
An Economic Union by definition has to have a general tariff applied to goods entering from outside the Union, which I would suggest should be 10%, except for food; also food subsidies should be removed.
This would aid the Third World and save many lives. There is no reason why farming should have special treatment. I can remember being struck by the incongruity of a meeting asking for higher subsidies to protect British farming where nearly all the farmers arrived in foreign cars while the British car industry was in crisis.
The war in the Falklands and the Iraqi invasion of Kuwait, the aggressor countries were ruled by dictators.
There is a case for having a “democratic levy” on all imports and exports from or to undemocratic countries. This would exert a constant pressure on dictatorships, which would be aware of the automatic and immediate reprisals resulting from wrong policies.
In cases of dispute, the decision of an International tribunal would be binding.
As an example:
5% levy if there is no free press
10% levy if there is no free press, free elections &/or suppression of minorities
20% levy for imprisoning political opponents
30% levy for imprisoning and torturing political opponents
Trade embargo and intervention for genocide
50% of the above rate to be applied to countries not applying the rates but still trading with the respective countries.
At least half of the income from the levy should be applied to foreign aid.
The country that really needs help is Africa. However, unlike Asia, most of the aid has had little effect due to corruption and a high birth rate.
I suggest that a five (or longer) year plan is offered, properly financed, on the following basis:
- Expatriates to help the Permanent Secretaries in Ministries, with power of veto;
- Immediate steps to reduce the birth rate and increase education and training;
- Strengthen a free press and media;
- A strong independent anti corruption bureau;
- Heavy investment in industry and services.
Most overseas aid should be under these conditions.
The British found an effective way of reducing colonial administrative costs was to establish the Crown Agents who supplied staff, standard designs for bridges, railway engines, etc. The European Union could establish a similar body, which could offer, for example, standard Power Stations 50MW 100 MW, bridges, etc., and much more and also have a core of engineers and civil servants for serving overseas.
Financing trans-African highways, railways and pipelines would also help.
GLOBAL WARMING, GREENS, etc.
The root cause of global pollution is mankind.
The population should be stabilised initially at the present level and then reduced slightly every decade.
No aid except in extreme cases should be given to any country not following this policy.
The Green movement has been valuable in pointing out the dangers of an industrial society. But with echoes of the Luddite movement shows a lack of judgement on what is possible politically and economically.
As example of this is that the only practical way to reduce CO2 to the recommended level is to have Nuclear Power Stations and electric cars (both having zero CO2 emissions), which would probably never be endorsed by the Greens. The nuclear plants to be of a safe standard design with new technology for eliminating most of the radioactive waste.
This also gives Britain a wonderful opportunity to start building electric cars as a new industry.
Dominion citizens should be allowed to visit Britain without visas.
The hereditary monarchy is now often considered an anachronism but in practice has worked well. A whiff of democracy for the institution would be for Parliament to elect the King or Queen (plus the Prince or Princess of Wales) from the House of Windsor or the Stuarts.
The United Kingdom is typical of many British institutions in being of an illogical or untidy construction.
The remnants of the Empire, now called the Dependent Territories: Gibraltar, Ascension, St Helena, Tristan da Cunha, Falkland Islands & Dependencies, Pitcairn Island, Montserrat, Bermuda, Cayman Islands, Turks & Caicos Islands, Virgin Islands and Diego Garcia, should be given the choice of Independence or joining the UK as an overseas province or department with an MP.
The apparent reason that this logical step has not been taken was the reluctance of the Foreign Office civil servants to suggest the required legislation on the old principle that causing problems was not the way to get promoted.
A result of this was the Falklands War. If the islands had been part of the UK, they would have been protected by NATO so Argentina would never have invaded. The considerable loss of life and money would have been avoided.
It would also make some recompense for the outrageous treatment of the British inhabitants deported forcibly from the British Indian Ocean Territory islands. The alleged reason ‘for US security’ has no validity as they could have been left in the northern group, which is miles away from the main bases. In any case, it would have been better for the Americans to employ British subjects in the base in place of foreign works, such as Philippinos, as is now the case.
The rights of Irish nationals are virtually the same as for British subjects. The laws were passed when Ireland was a member of the British Commonwealth. Now it is a foreign country while Dominion citizens, i.e. Australia, Canada and New Zealand, owing allegiance to the Queen are treated as foreigners.
The solution would be to offer the chance of being either British or Irish to all people living in the British Isles who had been born in Ireland (North or South). This would also help solve the Ulster problem as if there were substantial pockets of Irish in Ulster, the border could be redrawn or establish enclaves, as there is a customs union.