Saturday, 19 June 2010

Budget time again.

I'd really like to devise a personal budget that keeps my income the same but forces everyone else to tighten their belts. Unfortunately I'm not Chancellor (don't have the eyebrows for it) and with my financial record, I never should be.

Next week there'll be a Budget. Duty on petrol, booze and fags will likely rise. VAT might increase too. The people I rent a lab from certainly think so because they've issued the invoice early for this quarter, which is nice of them.

So petrol duty, smoke duty, booze duty will rise and we pay VAT on those taxes, and that will rise too. Man with a Van will be absolutely ecstatic. He can add a quid or two to his prices and we won't worry about it. He's still paying the same over in Smokislavia or wherever he gets the stuff so it's pure profit.

Which reminds me - this weekend I have to refill the petrol can that runs my lawnmower. Okay, it's pennies of difference for me but pennies add up.

'Look after the pennies and the pounds will look after themselves'. A bit of Granny wisdom I once ignored, but no more.

As usual we will hear that more smokers have given up because of the price rise and that it is a Great Thing. Did they really 'give up'?


They did not stop smoking voluntarily. They stopped not because they 'gave up' but because they were priced out of the market. Or, they shifted from the much-lauded official figures to the unofficial figures held only by Man with a Van. Who doesn't publish his business data anywhere unless he's insane.

The same will be true of drinkers. Politicians will delight in declaring that drink sales are down, as proved by diminishing tax takes. In fact, more will be drinking dodgy stuff brewed and distilled in sheds and laced with industrial alcohol which is a seriously bad idea. That stuff is nowhere near pure. It's not even lab grade. But then, look at Iran, where alcohol is banned entirely. The people will drink what they can get. What they can get is dangerous but it's all there is so they buy it.

US Prohibition killed an awful lot of people with criminally-produced low-grade booze. Look at the current state of illegal drugs. What comeback do you have if your cocaine is actually drain-cleaning powder? None. Who gets arrested if a druggie snorts Vim? Nobody. It's chaos.

So when we are reduced to buying methanol-laced hooch and tobacco that might include carpet clippings, who do we complain to? The local Don? Not a great idea. Think about offers you can't refuse and waking up next to a horse's head (okay, we've all done that after a night on the house whisky but even so) and that's where the increased taxation is going.

Criminals love this sort of action. They delighted in the gun ban, they proliferated with the smoking ban, they are just waiting for prohibition of booze and they already have the infrastructure in place for it. Just as they did in the US before it came in. Criminals - proper ones, not Burberry-clad wasters with an IQ so low they can't spell it - are not stupid. I've met them. They are logical and calculating and they are businessmen. Not like those in films and TV. These guys do not go outside for a smoke and if you cross them, you become one of those mysterious skeletons that keep the archeologists busy. These guys are rarely caught.
Usually a sap takes the rap - sorry, showing my age there.

The sap does get paid for silence. A couple of years in the stripy hole or these days, a couple of weeks, and there's a nest-egg waiting and any family is watched over. They are not evil, these people. They are logical and in many cases more ethical than 'legit' business people. But then, if you annoy them, they can be a little on the harsh side.

The coming budget is going to be watched very carefully by some people I used to know in the past. They will already have made preparations. They will have made those preparations based on predictive logic, not on some populist agenda because they care not one whit what you or I think of them.

When you crush the market in any commodity, any at all, crime takes over. When it does it operates more efficiently than any government ever could. You want more criminal activity? It's easy.

Bans and taxes are meat and drink to crime. Ban things, tax things, and crime will flourish.

As far as I can tell, it's what our government wants. They fancy themselves as Al Capone but really, they have no idea.


Anonymous said... . distilling is so easy i can do it,column still you cant go wrong, stick to white sugar mashes, stay away from fruit, did you know that drinking cider causes a palsy caused by methanol in apples, anyway im off to work adieu

Angry Exile said...

"When you crush the market in any commodity, any at all, crime takes over. ... Bans and taxes are meat and drink to crime. Ban things, tax things, and crime will flourish."

You've put your finger right on it there, Leg-iron. When the government tells us they need to make new laws to control drugs, guns, whatever they are in fact showing us that they have given up control and handed it to criminal gangs. They might think they control it, but that's just another delusion of the professional politician.

Anonymous said...

Reducing disposable income via higher duties and taxes also takes real money out of the real economy with the knock on affects to jobs and business compounding the problem and perpetuates the economic death spiral.

On the other hand, think of the growth in policing required to shut down or stem the criminals including the users. Think of the growth in construction needed to build more jails and the prison officers to staff them. The supply chain to keep them etc. This could just be the best economic stimulus plan ever.

DerekP said...

"growth in policing"
"build more jails"
"prison officers to staff them"

Don't these all require money from the public purse, thereby not helping with the deficit?

Shouldn't the Govt aim to be doing/spending less while bringing in more revenue? If so, surely this is the time for the Govt to start making money out of the less harmful drugs? Also diverting resources away from the futile (American prohibition-style) 'war on drugs'.

Anonymous said...

Don't these all require money from the public purse, thereby not helping with the deficit?

Of course it does Derek, I was typing with my tongue planted firmly in my cheek. Any kind of public sector growth combined with reduced public sector income just accelerates the economic death spiral. Increased national debt and / or taxes can only sustain this in the short term.

The sin tax Elasticity theory is a myth and LI is correct, the the Government will spin reduced sin tax income as proof positive that they are amending bad life style choices and therefore saving lives and the money. This of course is another myth but I will save that for another day.

Sorry for any confusion caused.

DerekP said...

"Sorry for any confusion caused."

Not at all. I'm just a bit embarassed I needed it spelt out for me.

Chuckles said...

Funny, It seems like only yesterday...Oh wait, it was. So the govt. gets two bites at the jugular this year?

Dick Puddlecote said...

They seem blissfully unaware of the existence of the Laffer curve. They're already well into the negative aspects of tax-imposition and still pushing. I'm always saying that MPs are jaw-droppingly stupid but they carry on taking that stupidity to new highs.

June 22nd will set a new record in dull-mindedness no doubt.

Chris said...

Bans and taxes are meat and drink to crime. Ban things, tax things, and crime will flourish.

...and then the money laundering and civil asset forfeiture (aka expropriation) laws are extended even further. Ostensibly for use against the criminal gangs, actually to mulct anyone the state feels like.

"On exactly what grounds do you object to this, kulak?"

Anonymous said...

Dear Mr Leg-iron

I find it increasingly difficult to distinguish between governments and organised crime. Their modus operandi are virtually identical.

The only difference appears to be that one is illegal.


Anonymous said...

Great song over at Ranty's place, that just about sums it up really.

Lady Friend

Anonymous said...

I normally buy a decent medium priced whisky so will drop to a decent lower priced whisky, have just bought a bottle of LIs recommended Glen Orchy to try (nearly half the price of my normal tipple) forgetting that its fathers day tomorrow. Today was visiting day for two of my offspring so two more bottles now in the cupboard, maybe a bottle or three tomorrow so I`ll be well stocked for the near future. Got myself a little Honda C90 motorcycle (100mls plus to the gallon £15 road tax and so much fun to ride) so bring on the budget I`ll still be able to manage pretty well

Junican said...

What amazes me about 'duty' is that, for decades, only fuel, tobacco, alcohol, and other minor things (if any) have been considered worth levying duty on. Is this just another example of the laziness and short-term thinking of politicians? I fail to understand how it can be that a commodity such as petrol, which could have been considered to be a 'luxury' 100 years ago, could be considered to be such a thing at this time. Petrol is now no different from coal in the olden days. It makes no sense any more to levy duty on petrol - this levy simply contributes to our uncompetitiveness in the world. We are a small country, densely populated - but that gives us the advantage of short lines of communication. How stupid is it for our rulers to destroy this advantage by over-taxing the cost of the movement of goods? This error is so obvious that it is frightening.

What is the difficulty in removing duty from petrol altogether and levying duty on other things? For example, Luis Vuitone handbags and imported fashionable clothes? Over a period of 100 years or so, why have the catagories of goods on which duty is levies stayed the same? It can only be sheer, stupid laziness and short-termism in our politicians minds.

The present coalition seem to have some reasonably good intentions, but they seem incapable of original thinking.

Shug Niggurath said...

On giving up smoking, couple of years back I got tired of the game my doctor played with me. You know, go there with a swollen knee, asked if you are still smoking...

So the next time he asked I just said, no actually, quit a couple of months ago.

I'm pretty sure he knows I haven't, but he no longer broaches the subject with me - not that I visit a lot, just that one bugbear is gone.

Anonymous said...


I intend to do the same with drinking. An argument would be counter-productive to my wider interests.

Asking to see the evidence (which doesn't exist) for their safe limits just looks argumentative, particularly since it's true.

I don't even drink that much, LI is a legend to me, but as soon as they can get you on the defensive, they will never stop 24? 20? 16? 12?...

I will / would be perfectly happy to get to 65-70 having fun and drop stone dead then. I've got / had rellies that got to 85-95 their lives were fucking shit for the last 10-20 years - no thanks doc.

I'm not sure that the world has such a glorious future (best of luck etc), I'm sure as fuck not living like a monk hoping not to have an accident on the off chance that it's okay.

Giolla said...

Le Fee? I do hope you didn't drink too much of that stuff it really is somewhere in the sub-bells region of Absinthe - the stuff from Spain especially Ibiza is much better.

please allow me to point you towards a rather handy confluence of EU trade and the internet, a Spanish booze seller:

Obviously cheaper to buy a bit to save on shipping but...

PJH said...

US Prohibition killed an awful lot of people with criminally-produced low-grade booze.

Actually, the US government was directly responsible for some of those deaths:

Frustrated that people continued to consume so much alcohol even after it was banned, federal officials had decided to try a different kind of enforcement. They ordered the poisoning of industrial alcohols manufactured in the United States, products regularly stolen by bootleggers and resold as drinkable spirits. The idea was to scare people into giving up illicit drinking. Instead, by the time Prohibition ended in 1933, the federal poisoning program, by some estimates, had killed at least 10,000 people.


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