Osborne needs to unleash his inner supply side capitalist
Enough messing about on the side lines, Osborne needs to unleash his inner supply side capitalist
In the Spectator last week, Fraser Nelson revealed that if the Treasury didn’t have to release a budget this year, they wouldn’t. He forecast what he describes as a ‘whale spray’ of policies: “a fuel duty cut here, help for the low-paid there.”
To say that this is a shame is an understatement. It is a huge missed open goal for Osborne. When the conservatives in New Zealand enacted a supply side revolution it took three years for the resultant short time shocks to play out and the long term rewards to flower (securing them re-election). With two years until the next general election, if Osborne is going to do something similar, it has to be done today.
And there is much that he can do. In my budget briefing on behalf of the Bow Group, I’ve set out a whole raft of supply side measures that would kick start the economy and champion conservative values.
Measures such as: an 8 percent tax cut for lower salaried jobs, putting an extra month’s wages in people’s pockets and encouraging more people off welfare; a meaningful cut in VAT rates to get people back into the shops; a three-year zero rating window on Capital Gains Tax to encourage companies to release assets and reinvest in their business; and the introduction of German style ‘mini jobs’ in which workers are able to earn £400 a month tax free, and are able to hold as many mini jobs as they can juggle, benefitting both worker and employer through offering a more flexible workforce; fuel duty shouldn’t exceed the cost of the fuel at the petrol pump.
This budget has been notable for its relative lack of leaks (particularly when compared to last year’s); nonetheless a few details have emerged. To take just one example, we’re told that Osborne is to allow parents a tax break of £1,200 per child for childcare costs – but not until 2015. Why? Up and down the country right now there are parents willing to work but unable to thanks to high childcare costs. The economy needs those people back in work today, not in two years’ time.
So far the government has made much use of the stick to reduce the welfare bill; these and other measures would act as a carrot by incentivising work by allowing people to keep more of the rewards, and allowing their money to go further in the marketplace.
This would have the happy effect of once again unleashing the potential of the men and women of this country to work hard, produce wealth, and make Britain great again.
As a now ex-Tory I have grown accustomed to sighs of “so close!” whenever I hear a statement from Conservative frontbenchers (or even more often “nowhere near!”). Meanwhile, the economy is flat lining and shows no signs of recovery. If Osborne wants to win the next election, it’s time for him to take a deep breath and unleash his inner supply side capitalist.
It’s time for him to enact meaningful radical solutions to getting Britain working again.
Donna Edmunds is the Head of Media for the Bow Group. Follow her on @DonnaInSussex
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