The Chancellor Can’t Add Up

mydavidcameron.comI was never going to like the recent emergency/austerity budget from the Con-Lib coalition. Instinctively anti-Tory at heart, I didn’t trust all the talk about ‘progressive budgets’ coming from the Conservative end. What made it more suspicious was how George Osborne, now chancellor, had been ferreted to the background during the election campaign after a surprising number of economic gaffes and a dire performance in the televised chancellor debates.

It’s simple: George Osborne can’t add up.

It was evident before the Tories got into power, and it’s evident now. And yes, I do consider this to be a Tory government: Nick Clegg appearing on the BBC Breakfast sofa every morning to defend Dave’s latest move and explain how really it is completely in keeping with Lib Dem policies doesn’t count. Nor does the occasional bone thrown to Cable to buy his silence.

The budget was also going to be painful, we always knew that. And frankly, not being an expert in economics, nor privy to the sorts of information the Treasury is, I’m not going to attempt to suggest detailed alternatives to what we have. What I can say though is this: Osborne promised he would ‘spread the pain’ and has instead delivered exactly the sort of budget one would expect from a Conservative government.

The VAT rate rise is indefensible. The job losses are inexcusable, and the pathetic attempt to counter-act them with 2.5million mythical private sector jobs is laughable. Under this budget, the government is going to add 1.3 million (at least) to the unemployed, pay them less benefits and make it more expensive to live all at the same time. Meanwhile, the private sector will be hit by lost public contracts, and fewer consumers able, or willing to spend money. Quite how this adds up to unprecedented private sector growth is beyond me.

Nice one George.

The fact of the matter is that in order to ‘spread the pain’, the budget would have needed to raise taxes on the rich. Cutting public services is always going to hurt the poor the most, as are blanket tax rises such as VAT, but the Tories, true to form, are unwilling to do this. They are particularly sensitive (as were New Labour) to the needs of the financial markets. This is understandable, the City does generate a disproportionately high amount of tax revenue compared to other sectors in the country. However, it should not be forgotten that it still only makes up around 10% of the total revenue. That should not make us slaves to the square mile. And with the new corporation tax cut, that will surely fall.

Capital Gains Tax is up. That’s good. As is the first step towards Cable’s pet policy of raising the personal tax allowance to £10,000, I particularly like that it’s on a sliding scale so only the poorest benefit from the so far £1,000 rise. But the overwhelming feeling from this budget is that it is business as usual from the Tories, and Lib Dem supporters are right to feel betrayed by Clegg’s smug appearances from the BBC sofa every morning defending this.

Nick Clegg

Sad face

Perhaps what Osborne recognises is that the UK economy doesn’t particularly excel at anything, and the prominence of London as a financial capital is all we have to hold on to on the international stage. But shouldn’t that send a signal? Exporting manufactured goods is unlikely to work as we are priced out of the international market by China and India, but weren’t we supposed to have an ideas economy? Certainly scientific developments from our better universities could be turned into money spinners – how about some investment in research?

Again, I don’t pretend to know the solutions. What I do know is that this obsession with bringing the deficit down at all costs, financial or human, is damaging, and a further symptom of the markets’ malevolent influence over our lives.

The problem with life is…someone put George in charge of the Treasury.



About Nick

I love music, vinyl, tube equipment, guitars. I love books, politics, science and philosophy. I'm cautiously in love with the internet.
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