A budget of sound bites not substance
This budget did little more than tinker around the economy’s edges. Osborne desperately needs to take tougher decisions
Yesterday’s budget has been assessed as everything from a “failing… obsession with austerity” (Green Party) to “moderately positive” (John Redwood); Chancellor George Osborne has been hailed as “the toast of Britain’s pubs” (British Beer and Pubs Association) and derided as “the wrong man in the wrong place at the worst possible time” (unsurprisingly, Ed Miliband). So, as per, it was divisive.
At first glance it is a budget that those of us on the political right should support. The personal allowance rise, a slight tax cut, has been brought forward; corporation tax will be cut in 2015; most government departments will see their budgets cut by 1 percent in each of the next two years; the 1 percent cap on public sector pay has been extended and limits on “progression” pay rises likewise; the military are to be exempt from aforementioned limits; the private sector has replaced each lost public sector job six fold; the 3p fuel duty rise has been scrapped and the price of beer has been cut by a penny.
These are all good things and what is more they are actions that are expected of a government that has a Conservative Prime Minister and Chancellor.
But despite an unusually “economicsy” budget speech, laden with figures, Osborne cannot hide that the growth forecast for this year has halved and our national debt as a share of GDP is set to increase from 75.9 percent to 85.6 percent in 2016-17. No matter how many times Osborne claims to have reduced the deficit we are still borrowing phenomenal amounts year on year; the coalition is set to borrow more in five years than Labour did in thirteen.
The fact is this budget was one of populism and sound bites; one designed to make headlines rather than reduce the deficit. Furthermore, when you scratch the surface, it is not a budget one might expect from a Conservative Chancellor, albeit one in coalition.
According to The TaxPayers’ Alliance this budget takes coalition tax increases to over 400 since 2010. Despite the nominal tax reductions, it is clear that what Osborne has given in one hand he has taken back with the other. The Office of Budget Responsibility itself states “the ‘giveaways’ and ‘takeaways’ net to zero when aggregated over the forecast and the tax and spend measures have a “relatively modest impact on the deficit, increasing or reducing it no more than 0.2% of GDP.”
This budget did little more than tinker around the economy’s edges while further complicating the tax system. It failed to tackle the serious problems we face while hopelessly missing the government’s own targets on growth, the deficit and our national debt. Osborne desperately needs to take tougher decisions; both spending and taxation are still far too high.
In one of his opening lines, Osborne claimed Labour’s budgets “tilted against the right thing”; in my own opinion, following from a PMQs where our Conservative Prime Minister gleefully brayed that the rich are paying higher taxes than under any Labour government, it is not so much that Labour tilted against the right thing, rather that Cameron and Osborne remained determined to tilt against the Right.
Alexandra Swann is a freelance journalist and prominent member of UKIP since leaving the Conservative Party last year. She is a self-described anarcho-capitalist and considers taxation to be state sponsored theft
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