March 25, 2006

Chancellor Doidge's Budget

It's a bit like fantasy football, only it's useful and everyone can understand it. I was crap at fantasy football. Anyway….

The 2006 Budget, by Chancellor of the Exchequer, Chris Doidge

Ho, Ho, Ho… Merry Christmas. Unless you're rich, vote Tory, are about to die, have private health insurance, send your kids to public school, drive a 4×4 for 'leisure purposes', or buy stocks and shares.

Here's my budget, and I commend it to your house.

Talking of which, houses. I'm going to tax you for them. In fact, I'm going to tax you if you have more than one. If you go and buy a 'crash pad' as they do so often on Relocation Relocation on Channel 4, thereby taking a perfectly good cheap house away from some poor bugger, then I won't just charge you Stamp Duty. Oh no. I'll charge you Multi Stamp Duty! On your first house, you'll have to pay 1% in duty. But on your second house, you'll have to pay 5% in duty. And then 10%. Bad luck. Except if you're a first-time buyer and then you won't have to pay stamp duty at all. Ooh, what a socialist I am. Naughty me.

Next up, cars. Big changes here I'm afraid. Car tax will be directly related to your MOT test, which will now have to happen every 18 months. At the test, you'll have your mile-o-meter read, and if you've done over 2,500 miles in your car over those 18 months then bad luck! You're paying for them! A £100 flat fee, in fact, except if you've got a 'green' car. And £25 if you haven't hit the magic 2,500. To be 'green', it has to be on my specially-approved list. Any car that Jeremy Clarkson detests goes on there. Pretty much anyway. The good news is that if you own a Chelsea tractor, you only pay £100 if you use the bugger! So light weekend use will mean you might end up paying naff all for it.

Next up, time to make sure you don't go and get pissed before driving your Chelsea tractor. Anyone found guilty of drink-driving won't just get a fine. Oh no. We'll have your car! If it's any good, we'll give it to the police to speed around in. And if it's not, we'll recycle it and turn it into something useful. Like a slide in a children's playground.

Meanwhile, a radical new approach to taxes on drink and ciggies. Unlike that bozo Brown, tax on booze will relate to the likelihood of anti-social behaviour being brought on by it. So lager and spirits? Up you go. 5p a pint or shot and 20p a bottle of vodka etc. But real ale gets a cut. Apart from the Real Ale festival in the Cooler, how often do you see loutish behaviour as a result of drinking good old British beer? Exactly.

Red wine gets a rate freeze, while white goes up a bit. Just cos it tastes like vinegar. But British wine gets a cut – 20p off per bottle.

That champagne muck? Well yeah, great for celebrating with, but go and find some British sparkling wine. It's bloody good apparently and you should be supporting your own. Champers goes up 50p per bottle. So there.

Next up, ID cards. That imbecile Blair thinks they're a good idea, but then this is the same buffoon that thought that invading Iraq was clever. From today, I can announce that (in conjunction with Microsoft, Visa, Mastercard and the number 7) ID Cards will be free! That's right. And they'll also double up as your passport, debit card, UCAS card, library card, European E111 card, birthday card and any other card you can think of. They'll be paid for by taking 0.1% of your debit card spending from the retailer (Visa and Mastercard can carry on having the rest of their 1%). We'll install some nice RFID tags inside them (no, you can't play with them Capita) and you can go round with a nice empty wallet. We'll automatically work out how much tax you owe, and what credits we owe you, and we'll upload them to your card. But we won't allow you to go into debt on them, cos there's quite enough of that to go round. This budget's probably just created a hell of a lot more of it! Oh and just as a bonus, we'll bring in legislation that means that nightclubs have to accept your ID card as proof of age, and if they don't, you can wave your RFID-enabled card at their genitals and it'll send a 25,000 volt burst of electricity to their upper groin. And then they'll let you in.

Moving on, and time to look at income tax. Oh yes. Fun for all the family. Unless you're under 16 and then we won't even bother assessing you for tax. So you won't have to claim it back later. And we'll give you a one-year break from paying income tax at any time in your life, so if you're saving up for something you can do so for 12 months without having to worry about how much of your money we'll grab. Just 12 months, mind. Once it's gone, it's gone. Power to the stupids.

Income tax brackets will change. I'll be a lot more honest with you, and the brackets will go up by earnings each year, not RPI. I won't play around with them, and where necessary I'll just change the headline XXp per pound.

So first up, you won't have to pay income tax until you hit £15,000. Let's face it, you're going to give my most of that back in VAT anyway, so I might as well give you a break while you're so far below the average wage in the UK.

People earning between £15k – £30k pay 25% tax
People earning between £30k – £50k pay 35% tax and
People earning over £50k tax pay 45% tax.

Fair's fair I think. I'm not sure if that will blow my budget, but I'll get some bright young spark like Miliband or Balls to work it out.

Oh, and did I forget to mention that income now includes council tax? That's right. I'll collect your council tax and give it to your local council. Or councils if you're a rich bugger. Because if you've got two houses, I'll give equal amounts of money to both local councils you live in. Let's face it, you'll be paying me more in income tax, so I can afford it.

Pensioners don't tend to pay income tax, so they won't have to pay council tax any more either. I think they've deserved it.

It also means that students can live with non-students, without all being eligible for council tax. Because only the earner will have to pay anything, through income tax. If they earn more than £15k that is.

Now I know what you're thinking. Anyone earning under £15k will be able to scrounge off the state cos they won't be paying any tax. Well, you're wrong hotshot. VAT applies to everyone (even poor little kids), and those scroungers will probably be paying more in excise duty on beer, fags (up 10p per pack of 20) and spirits. Oh, and did I forget to mention? You'll have to pay satellite tax. I'll charge 30% VAT on all subscriptions to television services. So there, rich guys.

That doesn't include the television licence, by the way, which I'll scrap. Sorry BBC, but it's not working any more. I mean, I listen to Radio 4 far more than I watch EastEnders, and yet I'm not paying for that. And from next year, any television I do watch will be through my Windows Media Center-enabled PC with broadband connection. So instead, I'll pay for it out of that 30% VAT on Sky subscriptions, and the rest out of income tax. What's more, I'll bring in legislation which means I can't increase the licence fee by anything less than in inflation. So if they go and accuse me of exaggerating how good I am in bed (45 minutes, by the way) then I can't really do anything about it. Might come to regret that one.

Oh, by the way. I'll scrap BBC Three. I realise it'll leave a gap between 2 and 4, but it really is shit and More4's better. Sorry.

Also related to broadcasting, I'll scrap this silly idea of auctioning off the bandwidth created by shutting down analogue TV. I'll give half of it to small, community-based radio stations who can broadcast on it using a free licence, and the other half to the Freeview consortium so I can watch snow leopards and Wayne Rooney in high-definition. Fantastic.

Next up, one of my more controversial moves. I'll privatise the Royal Mail. Sorry. Well, sorry to the Lib Dems at least, for stealing their idea. But I'll sell it to someone who can actually do the job without making postmen use their own cars to shift post about. And they can set postal charges at any price they like. Let's face it, even old people can use e-mail nowadays and the market will just price them out if they charge too much.

But I won't be selling off post offices. I'm keeping them because they're cosy and smell a bit like libraries. Talking of which, I'm combining the two. I'll spend £3bn over the next five years, merging the two operations. Libraries will have post offices in them (not bloody tai-chi clinics), and post offices will have libraries in them. And I'll spend another £3bn on books. Apparently stocks have depleted by 20m over the last decade. Also, I'll start digitally scanning in books at the British Library and then start redistributing them to smaller places. What use are they all in one London building with a reading room the size of my thumb? Get them out to the people where they can be read, and the British Library can keep hold of the electronic copies.

Next, there's a big problem with our pensions. They've got more holes in than a slice of Emmental. I'm more of a solid Cheddar man myself, so I intend to give pension funds a special tax credit so that they don't have to pay any of those silly taxes that individual savers do.

But individual savers will be able to benefit from a bigger ISA. I'll allow you to put up to £10,000 a year in there, tax-free. And I'll give kids £1,000 at birth, which I'll invest into an ISA on their behalf. How nice of me. The money will come from inheritance tax, by the way, which I'm afraid is where I'm going to be a bugger.

IHT is good and bad in equal measure. But if I ring-fence the proceeds from it, then I think I can justify taking 40% of your savings when you go to heaven/hell/house of lords. 35% will go directly into those child savings accounts that I just mentioned. And I'll keep the other 5% so I can afford to make those savings accounts tax-free.

It's not a redistribution from rich to poor, but from old to young. From past to future. Because I'm not an analogue politician. I'm a 64-bit, quad-core, liquid-cooled politician. And if you don't think so, you can go and live in the UK's one-and-only tax haven. That's right, there's no other good use for it, so I'm turning the Isle of Wight into a free-for-all, for anyone stupid enough to want to live on that godforesaken hole.

P.S. Next year I'll be scrapping tax credits for kids and just giving you free childcare (not vouchers… I'll just pay nurseries directly). And if you're one of those Spiderman-dressing dads who don't pay your kids' maintenance then I'll set you to work making Coventry look nice. You should be done by 2050.

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  1. Regarding landlords and stamp duty: we need a healthy private rental sector. If you had to pay 10% stamp duty on your third house, and so on upwards, it would be more or less impossible to find anywhere to rent. Those lucky few who could find somewhere to rent would pay a huge premium, so only the rich or well-connected would be able to find somewhere to rent. Students would lose out more than anyone, and we'd probably all go back to living with parents.

    It would also decrease liquidity in the (purchased) housing market, since current landlords are going to hold on to what they've got for all they're worth. Probably pushing purchased house prices up. So pretty much everybody would lose.

    I fully agree with charging a local income tax rather than a council tax. Councils need to be made independent of Whitehall, and the council tax as it stands is massively unfair, so this would kill two birds with one stone.

    Quick question: if a student lives with non-students, is the full rate of council tax due on the house?

    25 Mar 2006, 14:34

  2. Oh, and I guess this post was made half in jest :), but I thought I'd respond anyway…

    25 Mar 2006, 14:36

  3. The trouble is that in many areas there are too many people taking out buy-to-let mortgages as an investment. Yes, people need to rent somewhere, but some people are struggling to buy flats because they're being priced out by richer people wanting to rent them out instead. I guess people intending to rent houses out might be liable for less stamp duty, but I wasn't intending anyone to have to pay more than 10% anyway.

    But surely if stamp duty for third and fourth-homes is 10%, then the landlord simply needs to recoup rent 10% faster. I don't see that a 10% increase in rent would be that big a premium for tenants, as market forces would keep prices down and keep liquidity high.

    I believe that if students and non-students live together, the full rate of council tax is payable, but someone might want to prove me wrong.

    And I didn't mean my income tax suggestion to mean 'local income tax'. All tax would be collected centrally, reducing bureaucracy at the local level and just letting local councils get on with the job of spending money. Local taxes would simply be scrapped altogether and collected in one go. It also means non-earners and pensioners wouldn't pay towards local amenities, but I think that's a price I'm willing to pay.

    25 Mar 2006, 15:09

  4. John Dale

    Disappointed that your budget didn't address the controversial question of how best to fund UK HE in the coming decades. Seems an odd oversight for a Chancellor who's currently at university!

    25 Mar 2006, 19:09

  5. Controversially, perhaps, I wouldn't mention HE in the budget because I wouldn't really change anything. After looking at the arguments for and against (unlike the NUS) they're not as bad as they appear, and any fall in applications is because of the anti-fees rhetoric from the NUS, Student Unions and the media. Not because of the actual system, which if people understood it properly, they'd probably not have a problem with.

    However as part of my Comprehensive Spending Review next year, I'd be increasing funding to universities, although I'd be tempted to ring-fence some of it for spending on books in libraries, and not those useless 'e-resources' things. I'd pay for it partly by scrapping the stupid idea of trust schools and just giving schools a flat rate per pupil (weighted depending on geographical location, i.e. London might get a bit more, as would rural areas). A huge amount of money is spent by schools just trying to get more money. In other words, employing people to seek more funding from central government.

    Fundamentally however, I don't see the problem with top-up fees, but don't really want this entry to turn into a pros and cons discussion! Maybe I'll save it for later.

    25 Mar 2006, 20:02

  6. You running for chancellor Chris? I think you'd terrify Brown because you'd be so popular overall, though I don't agree with everything I think the bit about making Coventry look nice is particularly good… and when they are done there they can start on Crawley, West Sussex. They should be done there by about the year 3000 if they start tomorrow.

    25 Mar 2006, 21:47

  7. RE council tax…
    The amount payable by a house is calculated in two parts. 50% relates to the house, and 50% to the occupants. If there are 2 people who should be paying council tax in a house (i.e. working, non-students, non-blah blah other concessions etc) then the full rate is payable. If ONE non-student is living with students (as I was last year) then 75% of the total is payable. And the non-student should really pay for that themselves (as I did). It's not up to the students – there is a reason they're exempt – they have no money!

    Other than that – my brain hurts. I can't cope with economics on a Sunday morning…



    26 Mar 2006, 12:31

  8. Check out chancellor Doidge in today's Guardian by the way!

    28 Mar 2006, 15:50

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