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Boris on fiscal integration, the 50p tax rate and unemployment

by LLB Editor
18th Oct 11 6:31 pm

London mayor Boris Johnson snubbed David Cameron and George Osborne over “crazy” plans of fiscal integration in the eurozone at the Westminster lunch yesterday.

“I think it would be absolutely crazy to decide the solution to the Eurozone crisis is to intensify fiscal union and try to create an economic government of Europe,” he said.

While strongly supporting his call for the abolition of the 50p tax, the mayor shot down all suggestions of him vying to be the next prime minister.

“The reality is that I was incredibly lucky to get where I got as mayor of London and it is an immense privilege and a difficult job to do.

“I love it and I want to keep doing it for the next four and a bit years and I’m going to work very hard to do that. As I said to Jeremy Paxman, I really think it will be the last big job I do in politics or in life,” he added.

On fiscal integration

With the economic crisis in Greece and other Eurozone states looming large, the prime minister and chancellor have called for greater co-ordination of fiscal policy in order to turn the economy around.

Only a few weeks back, David Cameron said, “We must have a Eurozone” and that the debt crisis was “a threat not just to itself, but also a threat to the UK economy, and a threat to the world economy.”

The mayor, on the other hand, thinks that bailing the struggling countries out through a fiscal union would be a bad idea.

“I think it would be absolutely crazy to decide the solution to the eurozone crisis is to intensify fiscal union and try to create an economic government of Europe.

“I really can’t see for the life of me how that is going to work in the long term.

“Fundamentally, if you look at the ERM (European Exchange Rate Mechanism) experience and what is happening now, you get back to the issue of confidence. If people know the system can dissolve, then obviously they are going to wait for the moment when it does.

“That is the fundamental, inescapable problem that we face in endlessly trying to bail these countries out.

“It seems to me we are slightly living in a fool’s paradise at the moment,” he said.

On 50p tax  

The mayor has always been at loggerheads with his party over the 50p rate of income tax on those earning more than £150,000 and strongly mooted its abolition at the lunch.

“I don’t think we can go on with a top rate of tax that is higher than London’s major competitors.”

“We have got to look at the competitiveness of London against other capitals and at the moment they have lower tax rates than us. In the long term, I feel that will be a disadvantage.”

Speaking about the financial meltdown in 2007/08, the mayor said that bankers should have faced prosecution and possible jail for the lapse on their part.

“I do think it would have been a good thing if they could have found someone to carry the can, absolutely,” he said. “I’m afraid I am not sufficiently expert myself, not being a banker, to point the finger, but if you’ve got someone…” he said.

On unemployment

The mayor asserted that his office wants to be involved in any initiatives to ensure that born-and-bred Londoners are at par with migrants for jobs in the service sector, such as coffee bars.

“People often accuse us of lagging behind on this or that,” joked Mr Johnson. “The one thing we won’t be lagging on is lagging.”

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“Look at Pret-a-Manger. If you’ve been to Pret-a-Manger recently, how many native Londoners served you? What’s going on? We want to address that problem.

“Somehow or other, it strikes me that young people growing up in this city who are born here are not necessarily getting the encouragement, the skills, the work ethic that they might, or the ability to cope with work, the desire to do the job – whatever it is, there’s something missing.

“I don’t know what it is. I don’t have the answer. They need to be given the skills to compete,” he said.

Speaking about his ambitious Thames Estuary airport, the mayor said that the airport could be a “massive generator of employment, growth and hope” which would make London “a go-go city.”

At a time where business confidence is low, the mayor said that people need to feel that there is hope and that the economy will eventually turn around.

“The more the Government can communicate to people that things are coming down the track that are going to transform the country, the better,” he said.

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