Over the next few days I want to explore work.
Both the Labour and Coalition governments of recent years say they value work. They urge everyone of working age who can do so to get a job. They want people to take financial responsibility for themselves and their families.
The arguments between them are not ostensibly about the aim, but the effectiveness of their chosen policies. The Coalition has said it is concentrating on making it more worthwhile to work, and easier to create jobs. It has cut Labour’s planned National Insurance hikes, and cut income taxes for the low paid. That is all helpful. Labour favoured paying more in work benefit to subsidise low wages subject to taxes.
However, the cruel paradox is both in government have carried on taxing both job creation and earning. Both are strongly in favour of taxing people who choose to work long hours and take business risks, claiming that high earners should make a bigger contribution to tax revenues. They thought a higher rate would bring more tax revenue, but it brought lower revenue instead.
Taxing things does deter people from doing them. Governments tax smoking, drinking and driving because they see these things as wrong. They wish to reduce the amount of them that takes place, and punish the people financially who do them. The more government tax job creation, earning and effort, the less they should expect of each of them. The irony is they need the hugh tax revenues from them to subsidise the low net pay people earn after tax or to pay people not to work.
The Coalition says it wishes to break into this mad cycle. It has had some success in creating a climate in which the private sector has created a lot of extra jobs. It has had modest success so far at reducing the rate of new inward migration, so more of the new jobs go to people already here and on benefits. The next stage of this programme may need lower taxes on earning and job creating to give it more impetus, and more action to tackle EU as well as non EU migration.