Should fiscal policy be independent of who is in office?

[flanajb]

NOTE - This is not politics it's a serious question about the state of the nations finances and democracy in general.

The NHS is creaking, the public finances are in a mess yet each party seems intent on always offering tax breaks of one shape or another to entice the voter to vote for them. This in my eyes is a complete conflict of interest and the well being of the nation is actually 2nd to winning the vote.

If we all want to have first class healthcare, education, policing ... then each and every voter in the UK needs to understand that we all need to pay more for it. That means we all have to pay more into the system than we take out of it. Unfortunately, too many people are happy to take more out than they pay in. People also need to start taking responsibility for there own health, eating healthily and ensuring adequate exercise.

I for one would vote for tax rises (as long as it was for all), if the issues the country faces could be addressed. If fiscal policy was implemented by the OBR and politicians were unable to influence it, then I am convinced the countries finances would be in a much better shape.

 

[artie]

If we stopped paying interest on non existing money, to international bankers we would be in clover almost immediately.

 

[Cheshirechappie]

I see where you're coming from with the OBR, but I'm not sure I agree. Making a Quango responsible for something means that their accountability to the electorate is not direct, so they could wander off on their own sweet path (as the Environment Agency did in the Somerset Levels, for example), unaccountable to the people they're supposed to be serving. The one big advantage of having fiscal policy decided by governments is that they can be held directly accountable for their actions through the ballot box at regular intervals. If the electorate thinks a government is getting it wrong big-style, the electorate can throw them out and let another lot have a go.

 

[finneyb]

I would argue that in reality fiscal policy is independent of who is in office, the politicians hands are tied to a very large extent. Fiscal policy as I see it is driven by outside influences eg as of today we have zero inflation - allegedly, that must have an effect on future fiscal policy regardless of who is in power, because inflation needs to be higher otherwise we risk stagflation with all its predicted detrimental effects long term on the economy.

Similarly, low oil price - another outside influence - means that the oil industry needs tax breaks otherwise they won't invest in the future; politicians hands largely tied again.

It's a bit like GPs being given the reins in the NHS - I think a lot are now finding out that the control that they thought they were going to get is almost insignificant and outside influences take over and demand action.

Brian

 

[RobinBHM]

It is certainly a valid consideration. Governments have 5 year terms but fiscal plans should need to be set over a much longer period. Sadly a prudent policy by one party can be reversed by a spending policy by the next.

Politicians have to weave a tricky path between appearing to offer low taxes and high quality public services, whilst really trying to make plans to balance the books.

 

[Terry - Somerset]

I think there needs to be a real and informed debate about the level of public services to be provided through general taxation.

I would not expect this to be straightforward as individual needs and opinions will vary with age, income, health, personal responsibilities, and personal experiences. It would be comforting, albeit naive, to think that the young realise they will eventually become older, the older understand and/or remember what what is was like to be young, and all enjoy a shared vision of what our society should universally provide.

Realistically this is not likely to be the case. Whilst we may largely have a common view on the importance of (say) health and education, there are probably far more issues on which there may understandably be a diversity of views - eg: international aid, trident, green energy subsidies, welfare (safety net?), HS2, road building, BBC funding, pensioner heating allowance etc etc.

The OBR cannot make these judgements, and the public sector should only act on agreed policies. Politicians set out their stalls (manifestos) and invite the public to judge which they prefer. Every five years (or less) we have an opportunity to review their proposals and make a change.

This does not mean I am remotely happy with the status quo. Politicians seem at best selective with the facts (economic with the actualite??). Much of the electorate is ill-equipped to understand economic and fiscal issues and reliant on narrow personal perspectives and the media to form a view.

A more useful role for an independent body would be to contrast and communicate the real differences between the parties in respect common policies - eg: what is the real difference between funding commitment on NHS, what impact does investment have on the different deficit reduction claims, where more precisely will the savings imposed on public spending be made etc. This may take some of the rhetoric out of he debate and allow more informed judgements.

 

[themackay]

I think most of us are overtaxed already,If you cut out waste,needless buerocracy and incompetence from the system there would be plenty of money for world class services in this country.This is only getting worse due to the increasing numbers of PFI contracts that the taxpayer is paying over the odds for well into the future

 

[bugbear]

NOTE - This is not politics it's a serious question about the state of the nations finances and democracy in general.

Interesting. What on earth is your definition of politics?!

BugBear

 

[Random Orbital Bob]

Just what I was thinking! If that which Government chooses to spend our money on isn't the very heart of political decision making (ie what they value) then I'm a rabbit!

 

[Woodmonkey]

I think most of us are overtaxed already

Most of us, yes, apart from the top 5 percent who own 95 percent of the wealth... Oh hang on, yes this is definitely politics!

 

[finneyb]

... Oh hang on, yes this is definitely politics!

But its not party political dogma promulgated by those without the ability to think for themselves - it is intelligent debate and discussion. So perhaps the rules should differentiate between politics and party political ie politics OK ; party political NOT OK.

Brian

 

[finneyb]

.... Governments have 5 year terms but fiscal plans should need to be set over a much longer period.

In theory I agree, but the problem is that to plan for even 5 years ahead is nothing more than a guess. Was the dramatic drop in oil price on the cards one year ago, let alone 5 years - I think not. Who is to say where it will be in 5 years time.

Zero inflation/stagflation has been a possibility since 2008, but nobody knew when or if it would occur - you can't change fiscal policy on a maybe, because that will damage the economy. I think we have to react in the short term and take advantage of opportunities as they arise, because if you don't react to the short term issues you won't be here for the longer term.

Brian

 

[Cheshirechappie]

There does need to better general understanding of the facts and debates around public spending, fiscal policy, national debt, deficit, and all the rest of it. If one trawls the inner pages of the broadsheets, quite a lot of facts, analysis and opinion can be found, but not without a lot of time spent reading.

The problem, I think, is not so much the politicians as the media, and especially the broadcast media. Their approach to political reporting relies heavily on soundbites, limited examination and explaination of economic data, and they much prefer the (broadly irrelevant) knock-about of Prime Minister's Questions to careful summary of longer, more detailed debates. They've also become arrogant - witness their actions over the proposed Leaders' Debates - who is it that's supposed to set the political agenda; the politicians or the broadcasters?

As the broadcast media often operates in soundbites, politicians are effectively forced to speak in soundbites, which isn't necessarily the best way to convey complex information or set out reasoned argument. I'm well aware that some politicians waffle, but most of us can tell the difference between a waffling windbag and someone setting out a reasoned argument; we don't need a self-regarding journo interrupting every three seconds to help us form our own judgements.

I've been slowly coming to the view that the broadcasters have way too much influence over the political process. I'm not sure that they intend to have such influence, it's just the way things have happened in broadcasting, but it's detrimental to properly informing the public about what is happening in Parliament, Whitehall and Brussels. Instead of being the conveyers of information, the broadcasters go looking to create dust-ups between politicians of differing viewpoints because it makes more entertaining television.

I'm increasingly of the view that a lot of the disaffection with politics is because of the way it's reported.

 

[Random Orbital Bob]

... Oh hang on, yes this is definitely politics!

But its not party political dogma promulgated by those without the ability to think for themselves - it is intelligent debate and discussion. So perhaps the rules should differentiate between politics and party political ie politics OK ; party political NOT OK.

Brian

The point is well made and if people were able to behave like gentlemen and honour that then life would be good. Regrettably, experience suggests otherwise and that it only takes any opportunity to open political discussion for someone to snipe about left or right and boom off we go into a childish merry-go-round. I notice a few posts back someone has already commented on how wealth is concentrated in too few hands! Do you see what I mean

I'll leave this up for just as long as people can behave but the moment some . decides to "educate" us all with his diseased imagination on how he would do it better then its gone.

 

[Random Orbital Bob]

There does need to better general understanding of the facts and debates around public spending, fiscal policy, national debt, deficit, and all the rest of it. If one trawls the inner pages of the broadsheets, quite a lot of facts, analysis and opinion can be found, but not without a lot of time spent reading.

The problem, I think, is not so much the politicians as the media, and especially the broadcast media. Their approach to political reporting relies heavily on soundbites, limited examination and explaination of economic data, and they much prefer the (broadly irrelevant) knock-about of Prime Minister's Questions to careful summary of longer, more detailed debates. They've also become arrogant - witness their actions over the proposed Leaders' Debates - who is it that's supposed to set the political agenda; the politicians or the broadcasters?

As the broadcast media often operates in soundbites, politicians are effectively forced to speak in soundbites, which isn't necessarily the best way to convey complex information or set out reasoned argument. I'm well aware that some politicians waffle, but most of us can tell the difference between a waffling windbag and someone setting out a reasoned argument; we don't need a self-regarding journo interrupting every three seconds to help us form our own judgements.

I've been slowly coming to the view that the broadcasters have way too much influence over the political process. I'm not sure that they intend to have such influence, it's just the way things have happened in broadcasting, but it's detrimental to properly informing the public about what is happening in Parliament, Whitehall and Brussels. Instead of being the conveyers of information, the broadcasters go looking to create dust-ups between politicians of differing viewpoints because it makes more entertaining television.

I'm increasingly of the view that a lot of the disaffection with politics is because of the way it's reported.

I would broadly agree with that and add that because the media know they have such influence they play to their strength which is why you'll pretty much never find a broadcaster that isn't either blue, red or green and their party allegiance colours their reporting significantly. Same is obviously true in print (Mail versus Guardian) and even radio.

 

[bugbear]

But its not party political dogma promulgated by those without the ability to think for themselves - it is intelligent debate and discussion.

A quote by Mandy Rice-Davies springs to mind.



BugBear

 

[RobinBHM]

I think most of us are overtaxed already,If you cut out waste,needless buerocracy and incompetence from the system there would be plenty of money for world class services in this country.This is only getting worse due to the increasing numbers of PFI contracts that the taxpayer is paying over the odds for well into the future

A year or so ago, I did a large project for somebody who has a large house in Sussex and also a large property in Portugal. What does he do for a living? -consultancy.............mostly for NHS and other public authority departments. So it seems that the highly paid managers in these sectors need outside managements consultants. In theory, the huge contracts paid to business consultants improves productivity so much its a money saver.............

 

[finneyb]

I've been slowly coming to the view that the broadcasters have way too much influence over the political process. I'm not sure that they intend to have such influence, it's just the way things have happened in broadcasting, but it's detrimental to properly informing the public about what is happening in Parliament, Whitehall and Brussels. Instead of being the conveyers of information, the broadcasters go looking to create dust-ups between politicians of differing viewpoints because it makes more entertaining television.

I'm increasingly of the view that a lot of the disaffection with politics is because of the way it's reported.

In particular Murdoch who seemed to hold court over the politicians, despite not having the right to vote.
What surprised me is the alleged power of the Sun 'newspaper', personally wouldn't give it houseroom. But coming from Merseyside we use Andrex rather than the Sun 'newspaper' ever since the mis-reporting of Hillsborough 25 years ago.

Brian

 

[themackay]

If things carry on the way things are going with public services it will just be a case of handing Taxpayers money to the private sector to provide NHS services etc,A transfer of wealth to mainly American companies.hedge funds etc.

 

[Cheshirechappie]

I've been slowly coming to the view that the broadcasters have way too much influence over the political process. I'm not sure that they intend to have such influence, it's just the way things have happened in broadcasting, but it's detrimental to properly informing the public about what is happening in Parliament, Whitehall and Brussels. Instead of being the conveyers of information, the broadcasters go looking to create dust-ups between politicians of differing viewpoints because it makes more entertaining television.

I'm increasingly of the view that a lot of the disaffection with politics is because of the way it's reported.

In particular Murdoch who seemed to hold court over the politicians, despite not having the right to vote.
What surprised me is the alleged power of the Sun 'newspaper', personally wouldn't give it houseroom. But coming from Merseyside we use Andrex rather than the Sun 'newspaper' ever since the mis-reporting of Hillsborough 25 years ago.

Brian

I was thinking more of broadcasting - television and radio. With newspapers, it's generally pretty well known which way each title leans politically, and people can read with that knowledge firmly to the fore. Those who dislike Murdoch will tend to avoid the Murdoch press, for example.

It's far more insidious with broadcasting, and particularly with 'public service' broadcasting, which has the lion's share of viewers and listeners.

To illustrate the point, particularly with the OP's question in mind, how many people know what GDP is, or the difference between debt and deficit? How many could put a figure to each of those for the last fiscal year? How many know what proportion of GDP is public spending, and of that, what proportion is funded from taxation and what proportion from borrowing? How is public money spent? What's the defence budget, or the health budget, or interest on debt, and what proportion of total public spending and GDP are each of those? (Such facts and figures have been published and discussed in The Telegraph, and I'd be surprised if they haven't in the Gaurdian, Times and FT as well. But not on the BBC.....)

None of that stuff is concealed, but an understanding of the facts and figures would inform sensible debate about such things as what proportion of GDP should be taken in taxation. It's not hard to explain or comprehend, but broadcasters rarely make any effort to educate or inform the public, despite having several 24-hour channels available. The broadcasters would rather transmit a prolonged navel-gaze about whether or not a Prime Minister who hasn't even won a second term might or might not serve a third. Most of us are not remotely bothered about hypotheticals of that nature.