As the opening shots in the forthcoming election are made we have to realise that this is going to be a long and (by the time we actually get there) a seemingly endless campaign. Mansion taxes on two sides, immigration and a potential long term slanging match with the EU on the other. Apart from the desire to hold power and certainly for the prospective prime minister an assured financial future, what are the parties really trying to sell us? What are their aspirations for this nation, what is their perfect country, years into the future?
The country we love to hate (France with whom we have fallen in and out of love over the centuries) has for many years, probably since their revolution, always sought to create the perfect state for their citizens. A health service they are proud of which is compared favourably with our troubled NHS and a pension system (at least for government retirees) that is mind blowingly generous are two areas that certainly everyone could aspire to. But currently they are in difficult financial straits, weighed down by a fixed exchange rate within the Euro, an economy that just doesn't seem to want to get going and tax rates that are a nightmare that won't go away.
We have seen our own HMRC become more strident in their demands and their pursuit of those they perceive as not paying their fair share of taxation. We have seen the extension of their powers and a more aggressive attitude in recent years and apparently much the same is happening in France. It certainly appears that the European governments have decided that one solution to their problems is to squeeze the taxpaying populations until the pips squeak (to borrow a phrase from a former chancellor).
Due to the more stringent employment laws in France smaller businesses struggle with terminating unsatisfactory employees and thus there is a reluctance to create new jobs. The requirements regarding maternity and sick leave are far greater than the UK. Yes, a Utopia for employees but unfortunately many small employers have been driven into bankruptcy by one or two employees being away from work long term.
The aspirations of governments in waiting can become the aspirations of a nation without any thought of the consequences. A promise of full employment, grandiose infrastructure schemes, a benefit system that discourages people from pursuing employment, a health service that is a right without limit are all examples of the promises our politicians have made in the past that add to our financial deficit. Yes our state should provide the safety net for its citizens but just how far should it go?
We, as accountants and auditors, are well aware of the need to analyse the actions of our clients and understand the consequences of current policies. We do need to apply these skills to the promises made by the parties in the forthcoming election.
Can we afford the promises that our political parties will make to get our votes? Will their promises and blandishments strike a chord with the voters to see them over the line and into power? But can we afford to live in Shangri La or Utopia or will the cost be a confiscatory tax system and a massive fiscal deficit, leaving our descendants to rue our love affair with politicians' promises?David IngallPast PresidentUK200 Group
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