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Friday 25 June 2010
Letters: Perspectives on the rise in VAT
Realistic view of a 'burden'
Many of the reactions to the proposed increase in VAT seem to verge on the hysterical. It is true that the worst-off pay the same amount of VAT as the richest if they buy identically priced items of adult clothing, televisions and so on, so to that extent the tax is regressive.
But there is no VAT on most food, nor is VAT charged on clothing for young children, and the rate of VAT will remain unchanged at 5 per cent on gas and electricity.
So, if one recognises that after paying for essentials, such as food, fuel and children's clothing, the worst-off have relatively little disposable income, it is highly unlikely that the increase in the standard VAT rate from 17.5 per cent to 20 per cent will impose "the monstrous burden on the worst-off" claimed by Derek J Cole (letters, 24 June).
To put the proposed VAT increase into context, the worst-off would have to spend £47 per week on items liable to the standard VAT rate for the proposed tax increase to cost them £1 per week. This is not to pretend that life is anything but difficult for those on low incomes, but the proposed VAT increase cannot be their main problem, or even a major problem.
The British economy is in a mess, and none of us can afford to pretend that it will recover without the Government cutting public spending and/or increasing taxation. None of the options is easy. Increasing the standard rate of VAT seems to me to be one of the least-worst options because the biggest burden will fall on those who are better off and choose to spend a significant amount of their disposable income.
Rita Hale, London N1
It takes a genius
I failed to follow George Osborne's reasoning that he had delivered a "fair" Budget, and that the rich will be the hardest hit.
All was revealed at Prime Minister's Questions (22 June) by David Cameron when he explained that the wealthy pay much more VAT than the less well-off. Lo, the scales fell from my eyes and I realised that, after 4 January 2011, someone buying a Rolls-Royce Phantom car will pay more tax than a single mother, on benefits, when she buys a Barbie doll for her daughter's birthday.
It is easy to understand the alacrity of the Liberal Democrats to tear up their manifesto when confronted by such genius.
A W MacQuillin, London, SE15
We have read much about the Coalition's proposed tax increases. In particular, its hike in VAT might simply make people realise that they need less stuff.
But whatever happened to that much-vaunted, even sacred, Lib Dem notion of a local tax? As far as I can make out, it has vanished. Will the Lib Dem vote do likewise next May?
Christopher Hawtree, Hove, Sussex
Budget for a Greek tragedy
The cuts in government spending are intended to save the country from the type of financial crisis that has afflicted Greece. The presumption is that the Greek crisis was caused by "too much" irresponsible spending and not by more systemic economic problems. But if such crises are the result of the inability of countries and companies to foster long-term growth, which is often aggravated by the short-term focus of stock markets, then the UK Budget is more likely to hasten an economic tragedy similar to the Greek one.
Only long-term investment, with cuts where there is waste, will allow Greece to achieve growth and avoid staggering from one crisis to another. Greece has, over the past decade, invested little in research and development, venture capital or technologies that enhance productivity.
Similarly, the global crisis, with its origins in the US mortgage market, was not just down to bad banks and the bad or criminal management of mortgage securities, but the diversion of spending from sound investment to ones focused on "financialisation". Many companies put more emphasis on keeping their stock-price high, through practices such as stock repurchases, rather than increasing spending on R&D, which could produce future growth and more employment.
To remain competitive, and get out of the crisis, the UK government must invest in innovation. Instead, the latest cuts will cut off the lifeline of the very sources that promote such innovation-led growth. Contemporary US competitiveness is a result of an active state in funding university education and research, major innovations such as the internet, and labs such as the National Institute of Health (which funds the research behind 75 per cent of all new molecular entities that found their way into international pharmacies).
The UK government must invest in innovation because, despite tax incentives, private companies are risk-averse. The need for green technologies is widely recognised and it would have been reassuring to see a Budget that laid the foundations of a new technological revolution. Instead, we have a Budget that promises deep cuts with offers of sticking plaster. It's only a matter of time before the wound is exposed again and the next crisis occurs.
Mariana Mazzucato, Professor of Economics of Innovation, The Open University, Milton Keynes
The cuts to public spending announced should come as no surprise and are something the construction sector has been bracing itself for. But the Chancellor's announcement contained little to stimulate the promised enterprise-led recovery. The Scottish Building Federation's latest membership survey has found confidence in the construction sector slipping into reverse, with many firms blaming a lack of bank-lending for our sluggish performance.
Sadly, I can find nothing in the Budget that would help ease the availability of affordable credit to building firms or to expanding businesses and homebuyers that should be driving future construction demand. However politically popular it may be, I fear the proposed new bank levy may actually encourage banks to restrict their lending further.
What's more, for the construction sector, increasing VAT to 20 per cent is a retrograde step which plays into the hands of cash-in-hand cowboys by increasing their competitive advantage over legitimate building firms.
Michael Levack, Chief Executive, Scottish Building Federation, Edinburgh
Hamish McRae claims that, "This is not about politics, it is about mathematics" (23 June) but many economists (Nobel prize-winners included) beg to differ, arguing that these claims to technocratic fait accomplis mask the naked ideology underpinning an all-out assault on public services under the cover of economic determinism.
Chicago school neo-liberals have long employed a heads-we-win, tails-you-lose strategy. When the economy was motoring, pumped up with unsustainable levels of private debt by reckless banks, the argument was that the "efficiency" of markets vindicated the privatisation of public services and the slashing of welfare; now, as we sit amid the smoking wreckage of market failure, we learn that the costs of propping up the banks have rendered public services and welfare unaffordable.
Slashing budgets represents the kind of scorched-earth neo-liberalism described in Naomi Klein's The Shock Doctrine. When people see the consequences, the fantasy of Nick Clegg's "progressive cuts" agenda will be laid bare. This is Thatcherism on steroids.
Charles Hopkins, Norwich, Norfolk
Charles right to write to sheikh
I'm not sure I understand the fuss about the Prince of Wales's letter to the Qatari sheikh about the proposed development of Chelsea Barracks site (report, 24 June). Why is it all right for a property developer and his selected architect to determine the future of a large development but not for Prince Charles to "urge [them] to reconsider"?
He has been accused of "using his privileged position" to "skew" the democratic planning process. I was not aware there was a democratic process for the public to have a say in the design of new buildings. Planning applications can be objected to on grounds of density or traffic or any number of numeric factors. But the only means to affect the design is through persuading the developer, which is what Prince Charles has tried to do.
His intervention, although not directly democratic, does provide a channel for the views of those who prefer architecture to be on a human scale rather than a grand artistic statement. It is unlikely the sheikh would have listened to anyone's views except those of his architect without this intervention.
Prince Charles's views are frequently presented as his own quirky ideas, as if he just thought them up one day. But there are many in the architectural and building professions, and outside, who know that 20th-century building design has failed in many ways that earlier design did not. We do not need to copy the past, but we do need to recognise the patterns of building that work, and express them in ways suitable for today's needs.
Julian Gall, Godalming, Surrey
Educating young footballers
About 15 years ago, Arsenal decided that any of their junior players with respectable GCSE grades should be able to study for A-Levels (Education and Careers, 17 June). They sent them to our tutorial college, where the timetable is flexible enough to allow them to fit all their lessons into one day a week (leaving five for training and one for time off).
It was a great success. They learnt a lot, and so did we. They ended up with good grades in a wide variety of the subjects that interested them, and good prospects for universities and careers. We still hear from some of them who remember us with gratitude and affection.
Higher authority put an end to this scheme, and now almost every young player must study the same subject. An advanced apprenticeship in sporting excellence is probably the perfect choice for some young players but not for all. (And the 85 per cent of young hopefuls who will eventually have to rely on it for a career may well find that there are not enough jobs to go round).
Your article suggests that it is now difficult for an individual to fit an A-Level course into his training. Our experience shows that when it is arranged for a group, as part of their regular timetable, the young players manage it easily, with enjoyment and success.
Jane Darwin, Former Co-Principal, Westminster Tutors, London,SW7
EU getting grip on side-effects
I fully sympathise with the Grant family's fight for information about the drug Roaccutane (report, 21 June), which is why we are about to change European law on access to the data on side-effects of drugs. Since 2001, all side-effects which are reported across the EU are put into a European database. This massively increases the chances of potential problems being picked up and acted on, because it is easier to detect problems in a pool of 500 million people than it is working with only national data.
The new law will give the public the right to access data held by the European Medicines Agency (EMA), and from next year it should be possible to search on the EMA website for reactions to a particular drug.
The article also mentioned the common problem of companies slipping out of their obligations to do post-authorisation safety studies once their drug is on the market. The new law will give regulators powers to require industry to conduct safety studies at any time, and enforce penalties where they fail to comply. Abstracts and summaries of the studies will also be published on a new web portal, increasing the transparency of the whole process. Such measures will, I hope, remove the kind of obstacles to proper information experienced by the Grant family.
Linda McAvan MEP, (Lab, Yorkshire and the Humber), European Parliament Rapporteur on the revision of EU laws on pharmacovigilance, Brussels
A word or two on crosswords
Your Word Cloud feature suggests significance in the frequency that specific words are used. This led me to speculate about the compiler of your Concise Crossword (who, surprisingly often, has "Japanese" in his clues; is he Japanese?).
In the first five months of this year (after which I went on holiday), of the 3,130 words described by his clues, 185 appeared twice, 12 three times, four four times and just one ("Event") five times.
From the twice-used, I deduce that he likes to holiday in Sligo, Ely, and Italy (especially on Etna); that his favourite foods include suet, stodge, cabbage, tea and rioja; and that he enjoys music from oboes, banjos and sextets, especially the treble.
Eight animals appear in this "twice" list, but is there significance that the only one appearing four times is "ass"?
Again, it is worrying that the category containing the most twice-used words is the one I would classify as negative: odium, ignoble, grumble, errant, brute, offhand, etc (15 words in all), with "enemy" appearing no fewer than four times. This may be offset by the thrice-used "yes", "relief", and "rescue".
As for the five appearances of "event", this might have something to do with the World Cup or the 1912 Olympics; but I suspect it simply reflects that he is contributing to a medium the raison d'être for which is the reporting, and commenting on, events.
(Did I hear you say, "Get a life"?)
Andrew Warner, Andover, Hampshire
Church is not fair-minded
Ann Cryer (letters, 24 June) is concerned, saddened and disappointed at the traditional misogynist behaviour and attitudes of her church. I cannot but wonder then why she continues to be a member, and I do not understand why she expects any faith-based organisation to be as rational, inclusive and fair-minded as she clearly is.
Surely she realises that all religions are naturally exclusive. This is why I object to her suggestion that the Church of England is "serving everyone who lives in this country". For me, the Church of England serves only as an unwanted tax burden and I cannot wait for its inevitable disestablishment.
Ian Quayle, Fownhope, Herefordshire
With regard to whether women (or gay priests) should be able to become bishops (letters, 24 June), there is one very simple answer: abolish the House of Bishops. There is no justification for such a rank in the Old Testament, in the teachings of Jesus or the writings of Saint Paul. It seems that many religions are a way of establishing an all-male hierarchy.
I write this as a life-long worshipper in the Church of England, but as a long-time harsh critic of that organisation.
Richard Betts, Norwich
Ageism in the workplace
The Government has announced the scrapping of the mandatory retirement age at 65, which is to be welcomed. At last, a common-sense approach to legislation which was rooted in the 19th century when life expectancy was considerably shorter. The 2006 Age Discrimination Act was toothless legislation which still allowed employers to stop people working as soon as they reached 65.
But the question is, how are we and the Government going to convince employers to employ older workers when ageism is still a fact of life in the UK workplace?
Martin Lloyd-Penny, Nottingham
It is worth noting one genuine advantage of choosing House of Lords members by lot from ordinary citizens (letter, 22 June). Without need for positive discrimination, it would immediately result in a much higher proportion of women in Parliament than is the case now.
Earl of Clancarty, Petersfield, Hampshire
Has anybody else wondered why the significant increase in the NHS budget over the past decade has not led to a reduction in the expenditure on incapacity benefit and other sickness and disability welfare? There should be an approximate correlation.
Michael Brice, Reading
Just winging it
I wish you would stop referring to pterosaurs as dinosaurs ("Festival flypast by dinosaurs", 26 June). After all, you do not refer to whales as "fish" in the whale conservation story in the same issue.
Dougal Dixon, Wareham, Dorset
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