UKIP has almost done something truly amazing

Patrick O’Flynn (he of Philip Scofield impersonator non-fame) did something flabbergastingly interesting the other week, he announced a fairly interesting UKIP policy. You can tell how good UKIP policies are by how quickly they are dropped and dismissed by Nigel Farage. Particularly stupid ones, like grammar schools and leaving the EU, become party dogma, stupid but mostly harmless one, like painting all the trains maroon and making taxi drivers wear uniforms, last an election before being dismissed as drivel by the dear leader and the relatively sensible ones, such as making the Circle Line circular again, vanish relatively quickly. Mr O’Flynn’s policy was so sensible it had a life span of about 23 hours.

In his address to the UKIP conference O’Flynn suggested that a VAT rate of 25% be imposed upon luxury goods, he cited examples of handbags costing more that £1000 and cars selling for in excess of £150,000. The very next day Farage popped up to say that the tax, which had by then been dubbed the ‘wag-tax’, was just out there for discussion and “isn’t going to happen”.

There are, however, several reasons for taking a much closer look at a higher rate of tax on conspicuous consumption. VAT is actually quite an unprogressive form of taxation, no matter how rich the buyer of a good is the tax levied is the same rate. (currently 20% on most items) This in itself means that the tax is not progressive yet it gets even worse when you consider that the tax is only levied when you buy something and because of the diminishing utility of money richer people can save more and spend a smaller proportion of their income in the shops. Poorer people meanwhile have to spend just about all their money scrambling from one paycheck to the next and therefore pay a greater percentage of their income in VAT than the well off. A higher rate of VAT on things that only rich people buy would help to redress this.

Nor is the idea of variable VAT rates foreign to us, the Treasury currently charges VAT at 5% on all sorts of things, mobility aids and solar panels for example while a whole host of other things are VAT exempt, this catagory includes books, newspapers and children's’ clothing. If we reduce VAT on some items it doesn’t seem particularly absurd to increase it on others.

So what would this tax be on? The specifics can be decided later and and subject to a debate, but broadly speaking the higher rate should be imposed upon Veblen goods, goods which are consumed conspicuously. If at a time of national belt tightening you decide to buy a Rolls Royce rather than a BMW I think it is reasonable assume you have more money to spare. The same may be said expensive wrist watches and handbags. The tax may even be helpful to the buyer of these goods. The reason that people buy Ferraris and the Rolexes is not that they are particularly functional and useful (in many cases they are the opposite), but because they are conspicuous; people will look at them and think “ooo goodness, isn’t he rich”, a higher rate of VAT will make them a bit more expensive and thus a bit more ‘ooo’ worthy.

Practically the tax has a number of advantages: The fact that the tax is paid at the point of purchase means that it is harder to avoid. This also means that it is relatively bureaucracy   light. If you introduce a new tier of income tax you generally need to hire approximately 3.2 billion more civil servants to implement and administer it, because this tax is paid when you buy the good the responsibility for collecting the tax actually falls on the retailer, who would sort and then pass the money onto the treasury in much the same way they do at the moment. This means that the tax would be relatively cheap to collect.

Its not an idea that will fix the deficit, of fill the shortfalls in NHS spending but it would help normal working people feel that perhaps we are all in it together and, as they say, every little helps. More flexible VAT rates is one way of making an unprogressive tax slightly more progressive and as such is the sort of policy that Labour would do well to consider  stealing and shouldn’t dismiss out of hand as another stupid UKIP policy, like the one to build prison ships.

Coming soon to a town near you: A crisis in British politics

This week has been quite good for UKIP but it also hasn’t a bad for Labour. The Party looked to be in a spot of bother after its largest stronghold in Scotland voted against the party leadership in the independence referendum and a rather flat and unenthusiastic party conference was capped by a speech in which the leader forgot to mention the economy and immigration. As such the diversion of the Conservative defection to UKIP, rapidly followed by a married minister sending pictures of his cock to journalists, came as a welcome diversion and increased the temperature on the Prime Minister to gas mark 5. He met this with a generally well received speech, to which UKIP could only respond with an announcement that a self important idiot had given them some money on the basis that he thought the cabinet, if not the whole country, should know who he was.

Lets not get ahead of ourselves though. As a very general rule what is good for UKIP is good for Labour. The party still, despite the protestations of Nigel Farage, takes the majority of its votes from the Conservatives and where they have made inroads into Labour’s northern heartlands Labour is in a stronger position to resist them and absorb lost votes. Yet for Labour to celebrate UKIp’s rise is, by and large to miss the fact that almost every aspect of British politics is broken.

As it stands, the largest political party in the UK has draws just one representative from Scotland and is largely absent in much of the north. The opposition party has virtually no MPs in the south of England which are not in major conurbations. By far the most charismatic political leaders in the country belong to nationalist parties in the form of the SNP and UKIP and as recently as ten days ago over one and a half million people (45% of those asked) said they no longer wanted to be a part of this country.

The country is currently presided over by a prime minister who’s party was voted for by merely 36% of the electorate. His coalition partners won 23% of the vote yet only managed to get 9% of the seats. Meanwhile there are about 330,000 people in Northern Ireland who are not properly represented as their MPs are abstentionist. Not that the rest of us can claim to be better represented as only 65% of us bother to turn out at any given general election.

Indeed it gets worse. The European Parliament which, according to Nigel Farage, makes 164% of our laws was chosen in an election at which less than 35% voted. London is run by a man with questionable hair and legendary philoprogenitiveness who was elected on a turnout of 38% and in the West Midlands the man who runs the police was chosen by a mere 5% of those eligible to have a say. In Essex the same job is held by a man who was the choice of only 3.9% of registered electors.

In fact so few of us seem to care about politics anymore that it it may have passed the population at large by that in the past quarter of a century, the period for which I have had the good fortune to grace the earth, the police have been found (repeatedly) to be corrupt, incompetent, lying racists thugs, the politicians have been systematically on the fiddle and pretty much useless, the press have been morally bankrupt criminals who have been running the country on the sly and practically everyone who has ever been on Saturday night television has at best groped somebody’s tits or at worse raped a child.

The lesson seems to be, and I’m sorry if I sound angry but I am, that the country is perilously close to being fucked. I don’t mean fucked in the way that North Korea or Southend-on-the-Sea are fucked, but that the political system is becoming so remote that they cease to represent just about anybody and democracy starts to break down.

Do I have a brilliant idea to fix it. Well no. In this I am rather like those stupid people with dreadlocks who hang around New Cross proclaiming that capitalism must be brought to its knees whilst assigning the designing of a replacement economic system to just about anybody else. I am sure however that there is no single solution to these problems and that they won’t be solved by a convention. 

We can perhaps analyse the problem a little more closely and see what we come up with.

The Scottish Independence Referendum earlier this month showed that when an election may bring about some tangible change people are more likely to come out and have their say, not merely through voting but through getting involved in campaigns and debating the matter at hand. The reality is however that not all politics can be reduced to a series of polarising yes/no decisions and not a whole lot matters as much as whether your country should be independent. None the less it seems that if people feel they can directly influence things they are more likely to get involved. As such I think we need to have some form of electoral reform which means that elections are not decided by a relatively small number of marginal constituencies. As it is far too many people live in seats where they see little point in voting as they don’t think they can effect the outcome.

This may seem like a relatively minor constitutional amendment (I’m not suggesting behead the Queen) yet it will have a profound effect on our politics. Effectively we shall be ushering in coalition governments for nigh on eternity. In the past we have recoiled at this (nooo, look at Italy) yet in many places, like Germany, it works fine, and if you are worried proportional representation might prevent ideological halfwits rising up the political ladder, don’t worry, just think of Berlusconi.

Yet this is not enough. It is not the case that people aren’t engaged because the party they support because they don’t think they can win and their vote will be wasted, they simply don’t think there is a party they can support. As is shown by Owen Jones in his new book The Establishment all major political parties do not flock to positions which are popular with the public, but those which are supported by an elite cadre within society. 

Something must be done to ensure that the politicians dance to a different tune. The close links between those who run society and those at the top of it must be broken. I imagine this must happen at the level of access to ministers, the funding of political parties, even in decisions of where companies invest may need to be more closely watched than they currently are.

There are many other smaller things that need to be done. MPs need to be able to face recall, the House of Lords needs to be reformed either so it performs its examination role more effectively or, perhaps in tandem with major localism, some type of senate. We need to be better at holding our politicians and the powerful to account. When the people see something they don’t like they need to be inspired to take direct action. The News of the World, in part, was closed down because people pressured advertisers to pull out and then would, almost certainly have boycotted the paper. Such things can happen (look at the Sun’s circulation in Liverpool) but there needs to be more of this.

Some of this can be fixed by laws, but a lot of it is a question of changing attitudes. It is only through involving people in the political system, and making them feel that they are listened to and count that the malaise can be stopped and the drift towards nationalism, isolationism and the type of ‘anti-politics’ represented by the SNP and UKIP can be reversed.