Britain’s economy today is built upon a foundation of unsustainable rising debt and record trade deficits.
The Lab/Lib/Con alliance long ago abandoned any attempt to run the British economy for the benefit of the nation and have surrendered it to the dead hand of EU regulation and a rootless, amorphous globalist philosophy.
Inept governments, trades union militancy during the ‘60s and ‘70s and the increasing momentum of globalisation have combined to wreak extraordinary damage to the British economy, our industry and technology.
Britain, which was once a world leader in many technological and scientific fields, has had entire industrial sectors of our economy extirpated.
Factories, long closed or transferred overseas, cannot be re-opened when vital technical skills have been lost. ‘White flight’ or indigenous emigration, estimated to be in the region of half a million per year, has meant the loss of many of our skilled technical workers.
Any policy designed to repair this damage will take many years to complete and must involve governmental restructuring of both the educational system and the economy.
The tiger states of East Asia, such as Japan, South Korea and Singapore, operate their economies and industries in the national interest and that is the economic model which Britain should emulate.
Cutting Government Expenditure
With the current budget deficit at record heights, it would be grossly imprudent to increase Government borrowing, except in a case of dire emergency.
Fortunately, a British Democratic Party government would find considerable scope to raise revenues without increasing the tax burden.
Unlike the other parties, the BDP plans to cut all expenditure which is not in the national interest, rather than cutting front-line services to the British people. These cuts would include:
– The Climate Change Scam
The cost of so-called man-made climate change is estimated at some £18 billion per annum.
The BDP has highlighted the nonsense that has been employed in support of this fraud, visited upon the electorate by the three old gang parties in order to facilitate international governance and opportunistic corporate profit.
The £18 billion levy is made up of subsidies and the ‘green levy’ that is charged to current energy bills. Consumers pay these disguised costs often without even being aware.
– The Immigration Racket
The cost of the multicultural society (which has been imposed without any debate whatsoever by the three old gang parties and promoted by the Greens, UKIP, the SNP and Plaid Cymru) is estimated to be in the order of £13 billion per annum, according to MigrationwatchUK.
This embraces the cost of social security, crime, health tourism and NHS costs, translation expenses, unemployment, equalities legislation, education, related bureaucracy and much else.
The asylum swindle costs Britain in the region of £4 billion per year in terms of benefits, housing, support and legal fees.
– EU Membership
The cost of the EU for Britain in membership fees falls a little short of £15bn. Whilst a portion of this flows back to Britain, it may only be spent in such a manner as is prescribed by unelected EU officialdom.
The costs related to EU membership are in reality far higher.
The Taxpayers’ Alliance has estimated the savings to the economy of withdrawal from the EU, largely in terms of the regulatory burden, at £118 billion, and this does not even count the cost of damage inflicted upon our agricultural and fisheries industries.
While the halting of this cash haemorrhage will not immediately accrue to the Treasury, it will boost the British economy and ultimately enhance the taxable revenue base.
According to Open Europe, the expense of complying with EU rules cost each British household £4,912 over the past 11 years.
– The Foreign Aid Scandal
The cost of overseas aid is currently at some £9.1 billion per year. This cash goes directly to nations who very often are not in need of such aid (China and India, both of whose economies are larger that Britain’s), or to utterly corrupt states where it serves no good at all.
To make matters worse, it is the declared intention of all the other parties to increase foreign aid to around £13 billion per year.
The BDP would halt all foreign aid while there is poverty and deprivation inside Britain.
– Quangos and Politically Correct Social Engineering Schemes
Billions are spent every year funding assorted quangos such as the Equalities and Human Rights Commission and the myriad of ethnic organisations.
By cutting funding to these schemes and eliminating waste, bureaucracy, inefficiency, and unnecessary jobs in these quangos, we anticipate saving at least some £10 billion per year.
– Illegal and Immoral Foreign Wars
The BDP will immediately end British involvement in all illegal and immoral foreign wars into which the Tory/Labour regime have plunged Britain.
The cost of the war in Iraq is estimated to have been some £49 billion, while the cost of the war in Afghanistan is set to rise from £3 billion to £5 billion per year.
Revenues and Taxation
The UK Treasury forecasts that the nation’s debt will exceed 75 percent of gross domestic product by 2014 (£167 billion), up from 43 percent just a few years ago.
Worse still, a recent paper by the Bank for International Settlements forecast that the UK’s debt will rise to 300 percent of the GDP by 2040.
Current government fiscal policy has borrowed growth from the future which must be repaid. In particular, the vast cost of bailing out the banking sector will be paid by the next generation.
It is estimated by the Institute of Fiscal studies that within four years, more than 10p in every pound of tax Britons pay will go towards the servicing of the Government’s ballooning debt interest bill.
Many of the ratings agencies regard a country as entering fiscal crisis and a likely downgrade in its credit rating once its debt interest payments exceed 10 percent of tax revenues.
Whilst we appreciate that a certain amount of debt is required by the Government, especially during recession, our view is that debt crowds out private investment and should be minimised.
As a result, the BDP sets itself as a goal the reduction of the debt to GDP ratio of some 30–40 percent.
Such a ratio will compare favourably with our competitors and will also reduce the debt burden and servicing costs to future generations.
It will also free up money for investment into infrastructure and services of direct benefit to the British people.
Stimulating the Economy: Lower Taxation Must Be the Ultimate Aim
Excessive taxation reduces productive activity and Britain has already reached a point at which further increases in tax rates will yield no meaningful revenue.
The BDP aims to lower taxation rates, both immediately and over the long term.
Immediate cuts which can be made which are feasible, affordable and especially desirable:
– A rise in the personal non-taxable allowance to £12,500
The BDP will raise the personal non-taxable allowance to £12,500. It is ridiculous that the lowest and poorest section of the community should be taxed on subsistence wages.
To offset this, repeated governments have introduced a myriad of credits, for which those affected must apply and at a vast cost to bureaucracy.
In other words, the Government increases taxes on the one hand, and then employs a bureaucracy to supplement the living standards of the poorest section of the community on the other.
The BDP will halt this double-edged spending madness by simply raising the personal allowance to £12,500 before any tax becomes payable. The savings in bureaucracy alone will more than compensate for this move.
– Reintroduce the Married Man’s Allowance
To encourage and reward the family unit, the BDP will reintroduce the married man’s allowance by as much as £2,500, depending upon the presence of children.
This, in conjunction with the £12,500 above, will raise the point at which tax is payable by married couples.
This change may result in some off-setting upward movement in the basic rate at which tax will commence.
Our aim is to maintain revenue neutrality, remove an enormous burden of bureaucracy and, not least, to incentivise the lowest earners in the community.
– Increase the Inheritance Tax Threshold to £1 million
Inheritance tax (IHT) is, in effect, a double tax as it taxes the already taxed income of a deceased person. We do not believe that an individual’s life work should be appropriated by the state.
The BDP will therefore raise the inheritance tax threshold to £1 million.
Corporate Taxation: We believe in dynamic, profitable companies
Taxation in essence makes the Government into the equivalent of a shareholder in private undertakings by withdrawing a “dividend” in the form of tax revenue.
The greater the profit achieved by the corporation, the greater the tax income which accrues to the government for the benefit of the nation.
We therefore believe in creating an environment which is healthy for businesses and consumers alike though dynamic competition.
However, it is of great concern that globalist corporations are able to effectively circumvent their tax burden by exploiting legal loopholes known as transfer pricing and by outsourcing jobs to factories and call centres overseas.
To combat the latter phenomenon, the BDP will introduce a special ‘level playing field’ charge on companies that evade taxes in Britain by outsourcing.
Transfer pricing is the practice whereby assets, services and funds are exchanged within globalist corporations through their various subsidiaries.
The transfer price can be manipulated to affect the “profits” and therefore taxes paid by the international arms of a large corporation.
In essence, profits are transferred through this internal process to countries where taxes are low.
Globalisation has enabled, for instance, a microchip company to design products in one country, manufacture in another, hold patents in another and assign marketing rights to a company elsewhere.
This structure provides enormous discretion in allocating costs to each country and shifts profits through international trade.
According to the Organisation for Economic Co-operation and Development (OECD), some 60 percent of world trade consists of internal transfers within multinational corporations.
That, in turn, provides opportunities to transfer profits across borders.
By weighting their costs to the UK, where taxes are relatively high, corporations are able to reduce their taxes to the Exchequer.
The effect of this process is two-fold: the shortfall in taxes must be made good elsewhere and, secondly, domestic corporations — especially Small and Medium Sized Enterprises (SME) — are placed at a disadvantage because they must pay corporation tax at the full UK rate.
A recent media report revealed that three leading banana companies, which control two thirds of the worldwide banana trade, generated $50 billion in sales and $1.4 billion in global profits over a five year period — but paid only 14 percent taxes on profits.
In the UK, these companies reported combined sales of over £400 million but paid a paltry £128,000 in tax.
Nearly a third of the UK’s 700 largest businesses paid no corporation tax in the year 2005–6, according to figures from the National Audit Office.
This situation is untenable. The BDP will scrutinise, very carefully, the activities of the multinational corporations and the accounts of their various subsidiaries so as to ascertain their tax savings.
We oppose the view that the international profit and market share of the globalist corporation, facilitated by laissez-faire economics, should assume priority over the interests of the nation state, British companies and their employees.
Small and Medium Sized Enterprises
One of the most important inhibiting factors on SMEs — which provide the larger part of Britain’s employment — has been the vast layer of regulation which emanates from the EU.
A BDP government’s withdrawal from the EU will enable us to alleviate the onerous weight of regulation that is so harmful to SMEs. This encompasses well over 100,000 different laws and regulations, all created since the Conservative government signed the Treaty of Rome in 1973.
Many of these regulations are onerous to business, job creation and profitability. They undermine employment opportunities, especially for part-time and older workers.
The working time directive is but one example and, inter alia, it imposes a strain of record keeping required for compliance purposes.
For the larger company, the cost of regulation can more easily be absorbed as an overhead but this is not always viable for SMEs.
A BDP government will balance the interests of SME employer and employee rights by repealing burdensome rules and regulations on companies employing 20 persons or less.
Relieved of excessive regulations and bureaucracy, SMEs will thrive and this will stimulate private sector employment.
Globalisation and the Protection of British Industry
The BDP opposes globalisation which is extremely harmful to our nation for two reasons:
– It results in the importation into the West of millions of immigrants (in the form of “cheap” labour) from the Third World; and
– It transfers technology, manufacturing and industry to the Third World. This in turn causes the exploitation in labour in those nations and ultimately the collapse of our own living standards due to the inability of our industries to compete with that “cheap” labour.
The BDP also objects to the existence of disagreeable practices in the Third World, often tolerated by globalist corporations in the pursuit of international profit.
Such examples include the employment of child labour, the use of political and other prisoners to produce goods, lax environmental rules that would not be tolerated in the West, poor protection for workers, the absence of trades unions and employees’ representation, onerous working hours, an absence of social security systems, health insurance and so on.
Clearly, this places overseas enterprises at a considerable commercial advantage and facilitates cheap competition.
We are also aware of the restrictions many countries impose to protect their home industry, either in the form of red tape or direct tariffs.
We shall therefore impose selective tariffs on the import of goods from the Third World. Only those foreign nations and corporations who agree to abide by our strict social, environmental and ethical trading policies will be permitted to export their goods freely into the United Kingdom market.
To allow industry and commerce to adapt, tariffs will be imposed gradually through the years of our first term in office.
We are wary of the burden this may place on British consumers. In consequence, to avoid any general upward price movement, we shall reduce VAT (or such equivalent as we may introduce) with a view to securing revenue neutrality.
As already observed, some 60 percent of the world’s trade occurs as internal transfers within multinational corporations. This is detrimental to the environment and the measures outlined in this manifesto will diminish this proportion.
Not least, the option of closing down British manufacturing or services in favour of the Third World will become an unattractive proposition.
Finally, whilst we oppose globalisation, we would observe that the process creates disequilibrium within developing countries where self-sufficiency is eroded in favour of cash-crops, for example, at an expense to the environment.
Financial Markets and the Banking Crisis
The rebuilding of the British economy will generate attractive conditions for investment and it will be necessary to harness the skills and expertise that the city of London and its regional hubs provide.
A healthy stock market will form a part of our strategy to raise and attract capital.
The BDP differentiates between the numerous valuable activities within the City, such as investment, fund management, insurance, etc, and the recent excesses within the banking sector.
These excesses were recently described by Lord Turner, Chairman of the Financial Services Authority and a banker himself, as “economically useless,” and he also described the ‘bonus culture’ as having created “excessive risk-taking.”
Traditionally, banking was regarded as an important utility to oil the wheels of the productive economy.
Today, departments within the banking sector have become speculative vehicles where vast bonuses are earned in financial markets, at no risk of personal loss to the traders concerned.
Monies are being gambled, in the knowledge that shortfalls will be borne by the bank but any profits will be richly rewarded.
We recognise that when the economy is healthy, the banking sector provides significant tax revenues to the Treasury.
By contrast, during recession, difficulties within the banking sector often cause dire difficulties in the real economy.
The bankers then expect the Government to stand behind the sector — a process known as ‘moral hazard’ — which excuses even greater risk-taking in the good times.
This is unacceptable and creates misery, not least to the taxpayer, which has to make good the price of overconfidence and short-term profits.
To obviate these widespread concerns, we propose the following measures:
– A rigid separation between the utility (high street) banks and the investment banking sector.
The former will no longer be permitted to invest in derivatives, private equity or speculative instruments.
The latter will not be permitted to engage in retail or corporate deposit taking.
– The elimination of the short-term bonus culture. All bonuses to be paid in instruments connected to the underlying departmental profit, over a three to five year period.
– The restoration of the authority of the Bank of England (which will be renamed to the Bank of Great Britain) to oversee the regulation of the City and banking sector.
– The removal of the assumption that any institution is too big to fail. Whilst the Government should properly guarantee the savings of retail and corporate depositors within limits, the Government will not act as a bailing mechanism for shareholders or bondholders.
This applies particularly to banking failures. Rather than bailing out the reckless individuals who cause such collapses, the state would be far better off picking up the pieces to form a national reconstruction bank where individual shareholders would have their incomes and savings protected and guaranteed.
– The increase of minimal capital ratios to 10 percent of assets, with downward flexibility permitted in times of recession, as determined by the Bank of England.
– The doubling of capital required by banking institutions engaged in proprietary trading.
– The division of Lloyds Banking Group, which has clearly exceeded an appropriate size in a competitive economy, following its recent ill-judged takeover of HBOS.
We are also sceptical of the presence of vast international banking corporations, whose political, economic and global ambitions are very different to our own.
We shall not hesitate to introduce legislation to break up these financial combines, if necessary, to require their British activities to be divided into national subsidiaries, either with local partners or via a flotation on the London market.
We shall strictly forbid their intrusion into the political domain.
We expect the measures above to address the imbalances created by the bankers’ bonus culture. Where this does not occur, we shall employ the taxation regime accordingly.
Finally, we applaud the recent discussion of the introduction of a ‘Tobin Tax’ on spot conversions of one currency into another. Its application, however, would only be feasible by international agreement and we suspect there is an absence of determination to apply it.
By Andrew Moffat.