Skinflint's City Diary
For some reason that I have never grasped, the alternative to inflation is said to involve the deliberate creation of unemployment, presumably to reduce demand and thus lower wages and prices. To stabilise money, so the story goes, "you need two million unemployed" or whatever figure comes into the mind of the cranky rightor leftwinger making a pundit reputation talking about these things.
The country is now assumed to be in a terrible state, though in seven years North Sea oil will make us rich again and all our troubles will be at an end — or so, again, it is assumed. My own scenario for a happier future would go something like this. A general election would be held and the winning party would declare a five-year energy-crisis plan for its period in office. They would get us out of Europe and put forward measures that would, in essence, be a draconian rationing and no-growth economy for this period. There would be strict control of overseas holidays, the rationing of imported goods, particularly luxury foods and petrol, and the covert protection of nascent and weak industry through import deposits. Emigration would be discouraged and immigration qualitatively encouraged. The birth-rate decline would, so far as it lay within the power of the authorities, be reversed, because of the horrifying prospect — both strategically and economically — that by the year 2000 more than 30 per cent of this country's population will be over retirement age.
The purpose of rationing, as is fairly well known, is not only to reduce our import bill, but to lower demand, and thus prices. During the war, the private soldier drew £1 a week, not because the government was not able to print him a fiver, but to lower his purchasing power at home and in other theatres suffering from shortages of the very things that he wanted to buy.
Critics will at once say that this is the reverse of what the Common Market and other tradewidening plans are all about. They will say that it would lead to economic struggle and perhaps even war, and that we should be aiming towards free trade. I do not think so. Free trade was a perfectly proper policy in the last century, as Britain put herself first, naturally, so as to benefit from her developed industrial strength.
But things are very different now. Five lean years would give us a respite from the relentless competition for limited fuel oil at the new prices. None of us can stomach mass unemployment, and we all suffer from inflation. Let us wait for the new discoveries like the huge Selby coal bed and the North Sea oil becoming available, when it will be time for us once again to become economic expansionists.
Meanwhile, as someone over the weekend quoted Napoleon as say
ing, "the masses are less concerned about Liberte than about Egalitd."
Charitable trusts
Reg Freeson, the Labour Member of Parliament, is linking Lord Carrington with what he calls 'obscene' land speculation. Apparently 150 acres of the Carrington estate near High Wycombe, which has been in the family for 200 years, is to be sold to the local authority for £10 million. I rather like to hear of heart-warming profits like these, though, since Lord Carrington is a member of the government responsible for the inflation that made it possible, perhaps he should declare an interest.
Nevertheless, you might think, and of course you would be quite wrong, that Lord Carrington is going to pay £3 million in capital gains tax. Later, you might think, the Inland Revenue would be getting back, say, £1 million a year in perpetuity on the investment income produced by the remaining £7 million. You would be wrong again. Lord Carrington will not be paying a penny piece, due to a handy provision slipped through by his own party when they assumed office and as useful to the very rich here as the oil depletion allowances are in the United States. Lord Carrington has set up a private charitable trust with, as an objective, "the improvement of the environment." The gift of land or shares to a private charity no longer throws up a capital gains liability. The income from the settled funds do not pay income tax, surtax, estate duty or anything else, though it is perfectly proper for the trust to buy, if they see fit, Lord Carrington's private estate and rent him the house, to buy shares, speculate in further land or buy pictures or any other treasure that the trustees may consider suitable to promote now, or however far in the future, "the improvement of the environment."
Lord Carrington is an utterly honourable man and I like him.
There is no scandal linked to his name and I know that there never will be. The scandal is in the con tinued existence of charitable trusts and their tax-free status. A charity should, of course, be per mitted to collect funds door to door or on the street on the assumption that the money has been through the tax net. Once collect ed, the investment income shook be taxed as any other corporati income.
What i§. quite iniquitous is that some of our largest family coo panies and landed estates are owned by charitable trusts. They are uncontrolled except in the loosest way, pay no taxes or estate duty and are self-perpetuating. They are by definition onlY available to the very rich able to afford the legal advice and cost Of their foundation. They keep their fat ugly faces hidden except when from time to time one of the latl" gest decides to release a little of lfa, swollen cash to found a hospital, wing or a university hall 0,1 residence. Then it is the settlore name that figures large not only In the press but, hopefully, in the birthday honours.
Hereditary titles
There has been no paper more critical than The Spectator of ivIr Heath's decision, taken arbitarilY and without reference to the Party, the cabinet or th,' sovereign, to discontinue heredr tary titles. This decision has made an elite of holders of existing hereditary honours. The oriV reason that appears to justify tills levelling is the European comnT: ment; its ultimate result must o' to diminish the status of till: monarchy and to bring into a presidential system of govern' ment with the ultimate possibilitYi terrible as it is to contemplate, ca, Mr Heath as the first president 0' Europe. I have never cared for the. Gdnisctlhaiismdine change in the law that permitts ed abdication of peerages, allowinA to be a good reason to permit th politically motivated sons to ta' disclaiming soifohnerthere e d hereditary r:ptpiee tlaers thieve. • their place in the House of Lorda instead of their fathers, who al no longer be inclined for activ political life. For example, 10/n.5 Ponsonby of the Fabian SocietY an exceptionally brilliant alit; hardworking socialist of a tyPe e whom it is difficult not to ha.; i admiration, however diverge!:. one's political views may be to hle', His father is, so far as I am aw3„rd not interested in the cut a'd thrust of day to day politics, might well be inclined to see son take his place in Parliarne'er where his father and grandfat,i1v, before him have served so There must be many more him.
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