The budget this week increased IPT from 9.5% to 10%. This latest announcement exposes a deep hypocrisy in government thinking and pronouncements. The best way to spot hypocrisy is normally to ask the right questions, so here are four of them:
- The government told us that it was determined to reduce the cost of motor insurance – how does increasing IPT assist this aim?
- We are told that this latest 0.5% increase in IPT is to pay for flood prevention. Where therefore has the income gone from the 3.5% increase in IPT which took place only a few months ago? Attempts to link certain taxes to certain expenditure are always popular – of course I wish that all of my tax was spent helping disabled children and that none of it was spent by government quangos. Labelling tax as one thing or the other does not change real spending, it only changes the labels.
- We were told that removing the right to claim general damages for whiplash would reduce fraud. It is equally true that abolishing housing benefit would reduce benefit fraud, and that abolishing all types of money would reduce bank robberies but this of course is rather beside the point. Something which is beneficial should only be reduced or removed if the fraud associated with it is at such a level as to cancel out (or at least severely damage) the benefit itself. Are personal injury claims at that level, given that the levels of damages are heavily controlled by the courts and that the number of claims is falling?
- We have not heard about “the Compensation Culture” for a while, but this appears to lie at the heart of the government’s antipathy to compensation for personal injuries. The Compensation Culture argument was that legitimate activities (maypole dancing, sports days and charity events etc.) were being inhibited because of a culture of compensation. How will removing the right to claim whiplash in motor accidents fulfil this aim?
Presumably the aim is to allow people the freedom to drive more recklessly?