February 2023
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How do we escape the debt death spiral?

A couple of readers have challenged me to give an answer to the question of how we escape the debt death spiral I wrote about yesterday.

Firstly, as the Irish say, I wouldn’t start from where we are now – I would have started from the moment the Coalition got into power in 2010. But we are where we are. So, here are a few ideas (I’m afraid some of my proposals will upset Guardianistas. But Britain is as bankrupt as the loss-making Guardian newspaper, so we can’t go on spending more than we earn):

1. Declare a state of “national economic emergency” and put all public-sector and council managers and administrators on a 4-day week and all quangos on a 3-day week. After all, who would notice if the Department of Health only worked Monday to Thursday and the Equality and Human Rights Commission only did Monday to Wednesday? Saving £150m a week – £7.5bn a year

2. Set a maximum public-sector pension of twice the average wage and abolish the 3 years taxfree payments made to bureaucrats and top civil servants. Saving maybe £2bn a year

3. Stop all foreign aid till Britain eliminates its budget deficit and reduces its debt to 30% of GDP. Saving £10.5bn a year

4. Leave the EU – we can’t afford the cost of membership. Saving £19bn a year

5. Stop all subsidies to “green energy” and stop closing coal-fired power stations. Saving maybe £1bn a year. Resurrect Britain’s coal mines – extra tax revenues maybe £500m a year

6. Replace Corporation Tax with a retention of part of the VAT charged by companies so that all companies operating in Britain pay tax whether they claim to be based in Jersey, Cayman Islands or on The Moon. (Financial institutions would pay a tax based on their assets). Increase in tax revenues maybe £13bn a year. This would also result in many foreign firms moving their HQs to Britain creating say 10,000 well-paid jobs and generating say £3bn in extra income tax and NI

7. Declare activity sectors like energy, water, airports and ports as “strategic national assets” that can only be owned by British companies fully based in Britain for tax purposes. Increase in tax revenues, perhaps £3bn a year

8. Bring in a False Claims Act whereby whistleblowers who reveal that government departments are being overcharged receive a % of all money saved. Saving of say 1% on the government’s procurement bill of £170bn = £1.7bn

9. Bring in a scheme whereby public-sector, frontline workers (not managers) get paid a % of any money saved through a suggestion scheme up to a maximum of £50,000 per worker. Saving perhaps 1% of government spending of £500bn = £5bn

10. Set a mandatory improvement target for all public-sector managers of a very modest 2% a year. Saving in 1st year = £10bn: in 2nd year £20bn and so on

11. Cut the BBC’s budget by 5% a year for 5 years and restrict the BBC to making public-service programmes, not junk entertainment that belongs on the increasing number of commercial channels. Saving in 1st year = £150m: 2nd year = £300m: 3rd year = £450m and so on

12. Lower housing benefit by 1% a year and the cap by 5% a year for 2 years to force down rents across the private rented sector. Saving maybe £260m in 1st year: £520m in 2nd year and so on

13. Cut the number of MPs, MSPs, members of the Welsh and Northern Ireland Assemblies and their staff by 50%. Reduce the Lords to 100 members from over 850. Saving maybe £500m a year. Sell off Portcullis House earning maybe £300m

14.  End the culture of breeding at taxpayers’ expense – only give child benefits to the first 2 children: restrict social housing and housing benefit to people over 25: house anyone, who cannot live with their parents, in army-like barracks where they have to work (cleaning and so on) to earn privileges like TV. Saving maybe £3bn

15. Stop us being bankrupted by immigration – withdraw from the European Convention on Human Rights: extend restrictions on Romanians and Bulgarians for 10 more years: tighten habitual residency rules: deport all foreign criminals: no benefits to be paid to anyone who is not a British citizen or who has not worked full-time in Britain for 10 years. Saving maybe £5bn a year

16. Restrict citizenship – make the right remain and granting of British citizenship signed legal agreements between the government and the person, whereby it is agreed that any breach of the law by that person or any dependent results in automatic withdrawal of the right to remain in Britain and immediate deportation. Saving maybe £2bn a year

17. Give student grants to anyone aged 16 to 24 who goes on a vocational course to become a plumber, electrician, car mechanic, carpenter, bricklayer etc. Cost maybe £1bn

18. Impose a land tax on any development land that has been held for more than 3 years by a developer who has not built anything. Launch a programme to build 100,000 housing association homes a year on brownfield sites. Cost perhaps £4bn, but increases in revenue from income tax and NI and reduction in unemployment payments saving perhaps £1bn

We’re getting close to £90bn saved. Then hopefully economic growth would increase tax revenues by say 5% (£30bn) and that gives us the £120bn we need to eliminate the £120bn deficit.

But then we need to start paying down the debt of £1.2trn – that’ll have to wait for another day.

(Just a reminder – I’ve reduced the price of my latest book GREED UNLIMITED – paperback and Kindle versions – hopefully someone somewhere will now buy a copy or two)

3 comments to How do we escape the debt death spiral?

  • John Fields

    Thank you Mr Craig. Now all we have to do is to ask this
    public schoolboy government to read, inwardly digest, and put it into action.

  • Paris Claims

    Some good ideas…..but most quangos should be shut, starting with the Equalities mob ( and why do we have a potato board)Also what the hell are we doing in Afghanistan, except providing target practice for bearded goat-humping savages? All welfare benefits to immigrants should be stopped till they’ve paid in for at least 10 years, and they should pay for their education and healthcare needs. The £120 billion could be cleared up and the PSBR consigned to the dustbin of socialist history.

  • Philip Arlington

    You’re such a softie. The bureaucrats should either do more work for less money, or no work for no money.

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