James Max - James Max is a broadcaster, columnist and business expert

My take on Pasty-gate, Cam Dine With Me and the other PR gaffes

It would be easy to write a blog on how many mistakes Mr Cameron and his team have made this week. Indeed it as if he and his Chancellor are trying to break Gordon Brown’s record of “Just how many PR gaffes can we make in a week?”

So what I thought I would do is deal with the gaffes by proposing what he and his team should have done instead.

I don’t like pasties. I don’t eat pasties. I have never eaten pasties and nor am I likely to. I won’t pretend that I am a fan of Gregg’s the Bakers either. Personally, it all went wrong on the high street when we abandoned our local bakers and other purveyors of fine foods and ended up in the retail chains and supermarkets because we could not be bothered. Anyway. Each year Treasury officials try to do this hot VAT food wheeze. Normally it’s pushed back. Nigel Lawson let us into that secret. What George Osborne should have done is to simplify VAT on hot food and at the same time reduce the VAT to 10% if you take-away. We all know the VAT laws are a mess but we also know how many businesses and jobs depend on the food industry and how our lives have changed. Simple.

What an utter fiasco. Oh. Let’s bash the rich shall we? That will sound good when we remove the 50 pence tax rate. I never agreed with the 50 p tax rate. I will never understand how anyone can justify taking away more money from those who earn it and giving it to those who don’t over and above 40%. What I do understand is reducing the loopholes. Making sure people pay the appropriate rates and cutting the dodges that are legitimate right now. What some seem to confuse is that a rate cut doesn’t mean someone pays less tax. They just pay a lower percentage of their income in tax. In fact that is a good thing for the economy. However, let’s not get into the maths just now.

Repairing the housing market is a priority. You don’t fix it by stopping people from moving. You don’t fix it by taxing it and you don’t fix it by doing nothing to help the market operate efficiently. Stamp Duty is a vile tax. Whilst I can understand why you may impose a tax on second homes, overseas purchasers and on those who seek to make a living from buy-to-let, regardless of the value of the house it is pernicious to make the assumption that someone who lives in an expensive house or wants to buy one should pay more tax. I would assume that if you are buying a house over £2 million, the chances are that you already paid the top rate of tax on your income, that you are paying national insurance and so on and if you are looking for somewhere to live, why should you have to pay even more for the pleasure?

Worse than that, anyone who owns an expensive house is even less likely to move. That creates a shortage of supply and pushes up prices. Not just at the top end. So everyone pays. It’s ludicrous.

What George Osborne should have done is cut Stamp Duty. If more people move, supply eases, people buy stuff for new homes and fees are earned on trading. Mortgages are taken out, furniture and soft furnishings are bought, estate agents are used, removal companies, lawyers, builders, and retailers… everyone benefits. The loss in stamp duty will be more than compensated for in VAT and other economic growth.

You could not make it up. So a group of disgruntled workers threatens to strike. As a government it’s your job to help employers and workers come to some agreement. Particularly if it relates to something as important as fuel for the nation. What you don’t do is to fuel (see what I did there?) the panic and create a fuel shortage before a strike has even begun. What were Mr Cameron and his colleagues thinking? Are they really that stupid… or did they want to deflect from the other PR gaffe of the week?

Cam Dine With Me
We all know political parties have to raise money. Giving them state funding is utterly ridiculous. If someone or a grouping is more popular then let them raise their funds. If someone thinks they will benefit so be it. It’s no different from someone popping into his or her church and giving large amounts of money because they think it will help their relationship with God. Some may say how terrible it is that you can buy access. Some may argue that it’s awful that the Prime Minister should actually meet with the people who provide his funding. Or that he meets people from large companies. Or that he meets people from self interested groups. Well, actually I don’t have a problem with this. It is the case with every political party.

The simple way Mr Cameron should have dealt with this is by simply stating how policy is formulated and being robust in his views. For example the Prime Minister and others have been influenced by colleagues who have ideological views, lobbying happens every day of the week. What we have is a governance problem at the very top of government. Indeed it’s a problem that affects all parties and indeed the whole of politics given the House of Lords which still exists and indeed the potential for internal issues within the civil service, the lack of accountability for taxpayers’ funds and also the merry-go-round that we have for people who are booted out of office who end up in all manner of unelected yet appointed positions.

The Solution?
The biggest problem is that Mr Cameron and his team have a massive communication problem. For someone who was involved with PR for his career at Carlton Communications, this is surprising. If there was one lesson learnt from Mr Blair is that coordinated PR works. Mr Cameron and Mr Osborne can be as clever and tactical as they like. However they are going to have to do a far better job selling their ideas, convincing the British electorate that they are right for the job and that their plans are the right ones for the country.

They have made so many strategic errors both in PR terms and indeed in policy over recent months that I suggest they use this latest parliamentary recess for a serious strategy session. Our country has suffered from too much incompetence in the past decade. From the invasion of Iraq to the erosion of our key industries, the undermining of the nation’s strengths and the integrity of its reputation abroad. The strength of our borders to the ability to educate, govern and provide healthcare. Perhaps this PR disaster is more symptomatic of a bigger problem. Our politicians, because they are so short sighted in their objectives have failed to grasp that the real problem we face is that we are tackling symptoms and not causes and pandering to the worst invention of all time, namely the court of public opinion.

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