Friday, 18 March 2016


Mr Osborne's Budget is taking aim at a very specific target audience, the Tory voters. It is nor surprising neither dissimilar to behaviour from past Chancellors from any party and budgets all over the world. However, this one is particularly cynical in its address. Clinical even.

Let's start with the corporation tax. Businesses, especially small companies would benefit greatly from its reduction to 17% by 2020, but big companies are quite certainly opening champagne bottles galore too. One cannot fail to imagine that Osborne's Google deal was struck with the knowledge of lowering this tax, the meeting going a bit like this:
OSBORNE: "I need to give the electorate something, anything to show I'm tough. I'm pushed to reclaim some money from you lot, help me here."
GOOGLE: "Ok, we'll start paying some tax, say £130m for the past ten years? But it needs to lower if you want us to pay in the future."
OSBORNE: "Fair point."
It is followed by a reduction in Capital Gains tax from 28% to 20% to complement a budget of investment stimulus, but excluding landlords makes it potentially harder to the rental market.
Ringfencing income tax, national insurance and VAT for a whole term is dangerous and reckless as in the world economy, let alone in the domestic scene, there are volatile and dramatic shifts from one year to the next. Capping those three incomes leaves the door open for nonsensical downgrading in other services.

In comes further security for traditional conservative voters: the threshold for the 40% tax gets raised to £45k; a lifetime ISA is introduced to help people under 40 with extra cash to save for a property or a pension (the government matches with an additional 25%). This particular measure ignores, rather conveniently, that the very reason young people cannot afford a mortgage is because they cannot save in the first place (unless they're wealthy in the first place, hence the demographic it is aimed at). A very tautological manoeuvre.

All this shift towards helping businesses and investors comes to the detriment of essential services. Hundreds of thousands of disability claimants will be denied entitlement to benefits and the others will see their benefits cut by a substantial amount. First of all, the judging of who is entitled to disability allowance is a delicate matter, often failed. Understanding disability is a crucial and incredibly complex issue; secondly, disabilities require more money, not less, as essential and external help is needed.
It reminds me of a joke Michael McIntyre made on stage about people driving into the disable parking slot in a supermarket car park. Others around then look at the individual who gets out of the car expecting at the very least for that person to fall on the floor and crawl to the shop's doors, or they are certainly a fraud.
That is the sentiment of this government's behaviour towards benefits. They look at the surface without wanting to take the time to dig deeper and understand the needs of struggling people, and the many ways disabilities work. You can laugh and be in good spirits on the outside but scream on the inside as most people learn to cope with symptoms but are struggling to be able to lead a normal life. Inevitably there is fraud but the very majority are people who need help and compassion, not patronising handouts. There is fraud in the banking system (at least 10 times more) but bankers are not targeted directly by the government, instead they're helped further in their quest for a wealthy life.
Therefore, £4.4bn is taken away from the benefits' pot and transferred to the financial sector. Raising 1p in fuel and alcohol tax would've solved this problem without sacrificing social services.

Jamie Oliver claimed a victory when the Chancellor announced the sugar tax, equating to an extra 8p per can and seemingly giving the cash to promote sports in schools. The sugar tax is retrospective. It lets kids indulge in sugar, then it goes on to tell them to do more sports. Those same kids quite possibly don't do sport in the first place. I'm all for a tax on sugar as long as it's for all products with sugar and the money gets invested in nutrition lessons in schools. Show pupils items of food and drinks and, side by side, the amount of sugar in them. Tell the kids what nutrients different foods have, what benefits, what's good for them and what's detrimental. Basically, educate before the damage is done, not after when it's too late.

All schools to become academies by 2020. This is a massive mistake. It puts too much trust on headteachers. It implies the vast majority of parents know how to run a school; this is often not the case. It's utopian in its implications. It also opens up ways for a headteacher to reward board members in order to keep their job. Controlling the finances in all schools under this scheme will be tough and how the funding will be implemented, it is not clear. Opening up the hours during which schools can stay open will help more parents no doubt but it will put a financial burden/stress on the schools' finances. This is comparable to taking the NHS to full 7-day service while increasing doctors' hours and decreasing staff. Academies might work in the long run but it's too soon to experiment on this scale, not enough evidence to suggest it works better than the standard model.

This budget is a hit to the very fabric of society. It aims at increasing the chasm between the opposite ends of society, a wedge between compassion and ambition. It's a very calculated operation in targeting specific voters. The economy continues to falter and debt as a percentage of GDP has grown since 2002 from 37.1% to a staggering 88.6% in 2015. The Chancellor continues to miss every target he sets himself.
In the words of Radio 4's John Humphrys while interviewing George Osborne:
"What's a bloke got to do in your job to get the sack?"

No comments:

Post a Comment