The Illusionist: George Osborne is a con trick artist on a grand scale….
George Osborne does his best, in public at least, to cultivate his image as a quite affable, if not rather posh, chap simply going about his business. If he thought you were worthy, he might even come up to you in the street and shake your hand, however, what yesterday taught us is that if he did you’d have to beware his other hand wandering into your back pocket, for this is exactly what his Budget did, shake the hand of the poor and middle-income earners and offer a warm, reassuring smile, while picking their pockets on the sly.
He had the sheer cheek to call it a ‘budget for work’ while kicking away vital support that keep low-income earners heads above water. Also, he called it a ‘budget for business’ while announcing a cut in corporation tax that is of no benefit to small and medium-sized businesses. This is the problem with this Budget, even measures that seem ‘progressive’, supportable even, are in-fact set in the broader context of economic measures calibrated to make sure the 99% pay the price for the excesses and misjudgments of the 1%. The same people who Mr Osborne handed a eye-watering 5p reduction in income tax yesterday.
Let’s start with the legendary elevating out of tax of those on low incomes by raising the income tax threshold. Sounds great doesn’t it? No more tax! Accept, of course, no more tax is accompanied by the choking off of tax credits – a measure which is so fiscally regressive as to wipe out the benefit from dropping out of income tax on its own. You don’t need to have to even take into account the fiscal effects of continuing high inflation, high fuel prices, high energy bills, wage freezes, etc and of course the increased costs caused by the governments privatisation drive. All of this taken together, and you can’t hive-off the income tax threshold raise because its paid for by the rest of the measures, is a financial pounding of our countries poorest. This is just our poorest people in work, the people Mr Osborne claims to want to support. Woe betide you if your out of work because here it looks like the government is still going to prune a welfare bill it itself is largely responsible for inflating.
Pensioners, the Chancellor says, are better off due to the rising state pension and despite the now infamous ‘granny tax’. However, again they really aren’t; that raise will easily be erased by other pressures on consumption and in addition the raising cost of care for the elderly. Does Mr Osborne live in a surreal universe where the elderly don’t drive cars, heat their own homes or require any care? Small business won’t benefit from the Corporation Tax cut in any case, and even if it did, it’s going to be clobbered by rising business rates. A clobbering that smaller businesses wont be able to absorb with no lending support (another botched job by Mr Osborne) but larger corporations will. So, the Chancellors ‘enterprise’ strategy for job creation and growth, is, to put it plainly, a load of old bunk.
Even by the standards of his own rhetoric then, this Chancellor is a failure and a grand confidence trickster. This was the stab-in-the-back Budget. Everything he and this government does is with one end in mind and one end only, the enrichment of the vested interests that support him and his Party, his Christmas Card list as Ed Miliband aptly put it. Our job as the opposition is not to be taken in, not to be deceived by grand sounding ideas, like the income tax threshold, and to expose this man and this government for what they are, great deceivers of the British public. Finally, also we need to offer a vision and a narrative that will chart a new course for the economy and the country. Ed Miliband gave a clear indication yesterday he has the first part pretty much nailed down. However, we now have to move onto that second part, and that is easily the most difficult task now facing Labour in the upcoming years.