CITY AND SUBURBAN
We're coming out of bondage to the Chancellor let a million corks explode!
CHRISTOPHER FILDES
Icall for a nationwide fusillade of cham- pagne corks at midday on Sunday. Better than firing off guns. I shall give the signal and set the example. This year, Sunday 28 May is Tax Freedom Day — defined as the day when the average income earner stops handing over all his income to the Govern- ment and begins to make money for him- self. So this week and every week since 1 January we have been working exclusively for Kenneth Clarke. On Sunday we shall be released from bondage, until 1 January, when it all starts again. Tax Freedom Day is worked out by the Adam Smith Institute, which tots up all our taxes, direct and indi- rect, local and national, and works them out as a proportion of the total of our per- sonal incomes. It has, of course, been get- ting later. Thirty years ago Tax Freedom Day fell in April, for the last time. It has advanced 12 days since Mr Clarke took over. Five months in the year seems a long time to spend in bondage to him, and longer for taxpayers who want to know what is in it for them. The biggest and fastest-growing item in his budget is expen- diture on welfare, which takes their income and passes it on to someone else. Now Tony Blair tells us that this is the way it is going to be: 'Much of the current debate on taxation and spending' (so he said in his Mais Lecture) 'is parochial and sterile. The boundaries for change in both are much reduced'. Mr Clarke might secretly agree. He will scrabble around in November for some token tax cuts, he is under the strongest political pressure to produce them, but he has little scope while he still needs to borrow half a billion pounds a week. His predecessor had borrowed to the limit. Taxing must have its limits, too.
Whoosh, shazam
THE ODD thing is that if Mr Blair and Mr Clarke would raise their eyes above the narrow boundaries of British politics, they would see another world. In America, Newt Gingrich has changed the political land- scape by claiming that taxes and spending can be cut and that people will vote for cut- ting them. Half of this proposition — the second half — he has already proved. The first half is now being put to the test. Already Mr Gingrich and his allies are dis- mantling whole departments of state. They are putting Commerce out of business. Surely their example must tempt Mr Clarke? Whoosh, shazam — and away go the Departments of Agriculture, Transport, Employment and the National Heritage, buildings, ministers, inmates and all. How- ever would we get along without them? Pretty well, actually. He could apply the money saved to cutting the tax on cham- pagne. Already he has made a start on this, boldly bringing the champagne duty down from £1.67 a bottle to £1.50. Just think what he can do when he gets popping.
Dog days
BLAME WANDERS around the corridors of history like a lost and smelly dog. 'Shoe Margaret Thatcher cries. 'Get out of here!' `Funny thing,' says Michael Heseltine, `didn't Margaret have a dog just like that? Or one she gave house-room to, anyway?' Tony Blair chips in to say that the dog had John Major's pine on its collar, so shouldn't the dog-wardens be called in to clear the matter up? Mr Major keeps quiet and hopes the dog will go away. Eddie George gives it a kick in the slats. This dog, so petted in its day, led us into the Euro- pean exchange rate mechanism at a rate of 2.95 marks to the pound. No one now has a good word for it. Mr Heseltine says that it reflected- the personal view of Margaret Thatcher as Prime Minister. Certainly the pound had been going up all year — by 8 per cent against our trading partners' cur- rencies. Either the markets saw us coming to the ERM or the pound was being ramped. At the time I thought it was a bit of both. For a hard-pressed government, join- ing was a gamble — a treble, in fact: if it worked it would bring lower inflation, lower interest rates and cheaper mortgages, which between them might win an election. It didn't work, the Prime Minister was brought down, and her Chancellor, Mr Major, took over. To me, the right rate of exchange for the pound is not so much a dog as a chimera. You might as well believe in a single right price for War Loan, or for eggs. Times change and circumstances alter prices. The Prime Minister who maddened her previous Chancellor by telling him he couldn't buck the market did at least know that.
Lloyd's foolish virgins
THE MOSHE Dayan Plan — start a new war, in the wife's name — has arrived at Lloyd's of London. A firebreak (I thought so) will separate the bad Lloyd's from the good, the old Lloyd's from the new. A blurred association of ideas, taking in the Holy Land, has sent Lloyd's planners to the story of the wise and foolish virgins. The wise ones kept a reserve of oil for their lamps. The foolish ones ran out and asked for a top-up. This is where Lloyd's has got to. The planners now assume that the wise virgins will say, 'Help yourself — it's all in a good cause.' That is not what they said in the Bible, though, and we shall have to see whether Lloyd's has the moral or the legal power to rewrite the ending. It would make sense to me. A member of Lloyd's is trad- ing off the back of the world's best-known name for insurance. I can't think why Lloyd's does not put that asset in its bal- ance-sheet, where it would come in handy. Certainly I see no reason why Lloyd's should not, in good times, charge its mem- bers for the use of it — if the charge can be made to stick. It does, though, conjure up the prospect of a Lloyd's where everyone is being sued or suing, rich and poor alike, wise and foolish. Only one outcome would be worse: a Lloyd's that thought it could go back to business as usual.
Paris in the spring
THE ORGANISATION for Economic Co- operation and Development meets in Paris this week amid surging indifference. Even Kenneth Clarke, who loves jaunts, cannot be bothered to go to the meeting. Nigel Lawson opined in his memoirs that this ministerial talking shop was a waste of time and money. This verdict was quoted against him when he was put up for the OECD's top job. I would settle for being an ambas- sador to the OECD — an undemanding appointment if ever there was one. A flat on the Avenue Foch would go with it.
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