Thursday, 24 March 2011

It's about time tax and NI were merged.

An interesting suggestion in yesterdays Budget was the decision to look into whether Income tax and National Insurance should be merged.

This is regarded as something of a political minefield and it is clear that National Insurance means something different to the older generation than what it means to me and my generation.

For us National Insurance is clearly just income tax by another name.  I understand historically the money raised was put aside for specific purposes and although a theoretical reserve remains the truth is the money is in the general pot.

Another concern particularly for those approaching retirement is that this will in effect be a tax on the retired as they do not currently pay NI.  This is an understandable concern but can be quickly and easily dealt with by raising the personal allowance further for people past the retirement age.

The current system of having effectively 2 income taxes is unclear and unnecessarily bureaucratic.  I often meet people who have put 20% of their profits to one side to cover their tax bill.  Most people don't realise that the also need to put aside another 8% to cover their National Insurance.

The system has been used to con the public in recent years.  Gordon Brown often went into elections promising not to raise income tax.  Once the election was won he duly put up National Insurance.  This is the sort of underhand political spin which has lead to politics in general being brought into disrepute.

A simpler tax system which is easier to understand is something we should all want to see and I for one hope the Government push forward with this as soon as possible.

Wednesday, 23 March 2011

Will Wales take the opportunity the budget presents?

The Chancellor did his bit today to get the Welsh Economy going again but there will see be considerable work to do for the next Assembly Government.

Whilst lower fuel costs and reduced corporation tax (for the few Welsh businesses that pay it at the higher rate) will benefit Wales, many of the other schemes announced will depend on who is running Wales after 5th May.

Wales got an extra £65m as a result of todays budget.  The big question is what are we going to do with it.  England will shortly get more than 20 new enterprise zones which will prove attractive to new and existing businesses.  It is vital that Wales uses some of its money to follow suit.  If we don't we risk falling further behind as businesses chase the lower taxes and easier planning rules available over the border.

The Chancellor also announced help for first time buyers.  Any help of this nature has got to be welcomed as it helps to get the property market and the construction industry going again.  Whilst I have not seen the full details of the scheme it is vital similar help is given in Wales.

My concern is that the extra £65m will be frittered away in other areas rather being put into economic development where it is really needed.

Jane Hutt said today the budget "did not do enough for hard pressed families".  What those families need is a strong economy with good jobs and she needs to spend less time moaning and more time coming up with policies to turn the Welsh Economy around.

Of course it will not necessarily be her in charge of the Welsh finances come 6th May and I look forward to seeing what the different parties propose to spend this latest wind fall on.

Thursday, 10 March 2011

Is the Welsh Language about to go the way of education and the economy?

I spent this morning at the Welsh Language Board "Welsh means Business" conference in Cardiff.

It is the first of their events that I have been to and I was very impressed by the work they are doing.  It is clear that they are making progress in getting Welsh businesses to use more of the language, this has got to be a good thing.

I was surprised therefore to find that the Board is to be replaced by a Welsh Language Commissioner, and some of its functions are to be absorbed into the Welsh Assembly Government.

We witnessed the "bonfire of the Quangos" several years ago where bodies such as the WDA, ELWA and the Welsh Tourist Board were absorbed by the Assembly.

Since that happened the Welsh Economy has fallen further behind the rest of the UK and Welsh education standards are at an all time low.

This may be a coincidence but I fear that the problem may be caused by the lack of accountability that being hidden within the Welsh Assembly Government brings.  If the Welsh Language Board is also lost the same way I am concerned that the excellent progress made over the last 20 years could be lost.

I appreciate that the commissioner could improve things but it is not the way to encourage small businesses to use the Welsh language.  Businesses will react far better to the carrot (such as a discount on business rates for adopting the Welsh Language Board Policy) than the stick which is ultimately what the commissioner will wield.

A far better option would be to allow the Welsh Language Board to remain and continue its work with business but have a separate commissioner who can further the good work that has been done in the past and focus on non compliance by the public sector.

It is disappointing to see Plaid Cymru pushing this forward, and they seem desperate to be seen to be doing something.  They should heed the saying "if it ain't broke don't fix it".

Thursday, 3 March 2011

Turnout Predictions

I popped into my local polling station on the way home and I thought I would give a quick update on likely turnout for tomorrow.

Barring a late rush the turnout looks like being about 30% in my polling district.  This compares with 55% in the last council election.

Very unscientific as my sample of one might be, I doubt it is far wide of the mark.

This is actually a bit better than I had feared but a low turnout should favor the yes campaign so fingers crossed for tomorrow.

Wednesday, 2 March 2011

Is Electrification Really Best For West Wales

My first reaction to the decision for electrification of the main line to stop at Cardiff was, like many in West Wales, one of bitter disappointment.

Once again it feels like Wales's second city was slipping further behind Cardiff.

But once I had read the facts I could not help feeling that we may be campaigning for the wrong thing.

The cost of the Cardiff to Swansea part of the Electrification project would be about £150m - £200m.

And what time saving would we see for this investment?


It turns out that the "geometry of the line" is such that trains could not travel any faster even with electrification.

It is therefore no wonder that it became difficult to justify the electrification on business grounds.

If electrification was to be carried out it is unlikely that further investment would be forthcoming to sort out the other issues which obviously exist so it is important we get what we need, which might not be the same as what Cardiff has got.

Therefore I feel our efforts would be better spent lobbying for the track to be upgraded in a way which will reduce journey times from Cardiff to Swansea.

The other thing holding us back is the relatively low usage between Swansea an Cardiff.  This does not surprise me as when I have used the train it has always been very quiet for that part of the journey.  But this is due the the fact that the train takes almost 50% longer than driving and only goes once per hour for most of the day.

If additional services were put on which went direct from Swansea to Cardiff they would prove more popular as this would cut out 3 stations and immediately save 10 mins with no further investment.  I appreciate that this would seem hard on Neath, Port Talbot and Bridgend but they would not lose any services.

Shorter journey times and more direct trains would increase usage and help build the business case for future electrification but first we need to give careful consideration as to whether that is what we really need.