Whoever wins - do keep it simple
WITH five disagreeable weeks of Election campaigning ahead of us, let’s start with a plea to our next Chancellor – whosoever he or she may be.
It is to stick to the KISS principle – keep it simple, stupid. This acronym dates back to US Navy practice during the Cold War, when they found that simple systems were more reliable under pressure than complicated ones.
But it is something that all of us know from our own experience. It is the electronics of modern cars that go wrong first. Self-service supermarket checkouts are a pain. And as for pensions, argh!
Businesses are beginning to understand that the complicated supply chains they have created are too difficult to manage, and it is better to rely on local suppliers than ones on the other side of the planet. But the message for governments seems not to have hit home. This is a general plea and it should be applied to every aspect of government: tax, spending, regulation, legislation, the lot.
There’s not a lot of point in picking over the detail of what politicians say on the hustings, though I must confess to a sense of déjà vu when I see Labour’s nationalisation plans.
Why, as my father used to observe, make the same mistakes over and over again when there are so many new ones you could make instead?
What there is some point in noting is that governments come in with grand ideas to change things, and it takes them a while to learn the lesson of unintended consequences. The current example of this on the tax side is the shortage of senior doctors, who have to cut back on their shifts because changes to pension taxation mean it costs them thousands in tax if they earn a few more pounds above a threshold.
But there have been many others, with the poll tax leading to the end of Margaret Thatcher’s premiership, and the so-called dementia tax damaging Theresa May at the last Election.
So what would a Chancellor genuinely committed to simplicity do? There are a couple of principles to follow. One is efficiency, the other fairness.
On efficiency, the approach would be to look at the admin cost of every tax and compare it with the revenue it raises. Then axe the taxes that are worst value on that tally. I suspect that inheritance tax would look pretty bad on that score.
On fairness, the test is more nebulous, but I think we all know whether a tax feels fair or not. By and large, simple taxes will seem fair because people understand them. Complicated ones won’t, because clever people (or at least the well-advised) can avoid them.
Eventually this Brexit business will be done and dusted, and politicians can think of something else. When they have the bandwidth to do so, could they please not try to be clever. Come to think of it, the past few months have been a classic example of clever people using their intelligence to make things more complicated – and whatever your
FIGURES last week from the Office for National Statistics showed that banking exports last year were a new record of £36 billion, while total financial services exports were £62.5 billion, up more than £3 billion on 2017. We can all get cross with banks for a host of reasons but let’s remember that £36 billion contribution to the national accounts next time we buy an imported foreign product that sees money flow abroad, whether that’s a car, a bottle of wine, or simply an avocado.
THINKING of imported avocados, I was stuck by some comments in Gardeners’ World by Alan Titchmarsh on strawberries and tomatoes. We should not, he said, be eating them in winter. His argument was simple. We should eat seasonal, locally-grown vegetables and fruit instead, and we should eat British produce rather than imported stuff. He is right, of course, and for three reasons. Home-grown food is kinder to the environment as it does not have to be transported. It supports UK growers. And it tastes better.
We can still buy avocados, but let’s look for the union flag and buy local if we can.
Clever people of late have been making things more complicated views on Brexit, they have not been a bundle of fun.