On July 7th I spent my lunch break listening to the budget… what a sad man I have become. It’s tragic really being a political obsessive, we’re not normal people. Who in their right mind watches a long, boring speech by the chancellor in the middle of a weekday? Or any day for that matter. Oh well, that’s my life now.
I decided not to add to the avalanche of opinions that came immediately afterwards, preferring to mull it over and read various analyses and perspectives. Now, I humbly offer to you a few afterthoughts.
The main thing to take from the budget is that George Osborne is becoming an extremely wily politician. He knows how to put the Labour Party in a difficult position and how to manipulate the headlines and so set the political weather. The headline policy was the raising of the minimum wage, which if nothing else was masterful politics. By stealing Labour’s clothes he has robbed them of a stick to beat him with, and calling it “the living wage” was fantastic political trick.
For those only half interested in politics, or those just wanting to know the key policies of the budget; “living wage” is the buzzword that has stuck in their head. When I returned to my desk after my break this was a policy that people noticed and approved of. Little else was discussed apart from a little debate about the abolition of the student grant. The tax credits didn’t register, in-fact little else did.
Tories everywhere are as pleased as punch about this of course, gleeful about their dominance of the political landscape and anticipating a decade in government. This I can certainly understand, but despite the political mastery of it all I can’t help but feel disappointed by the budget in many ways. Surely anyone who was hoping for a radical, state shrinking, tax cutting agenda must have felt a little underwhelmed?
I am happy about the plan to return to surplus by the end of the parliament, but when I look at the list of government departments, of public bodies, the number of ministers, and lords, I see room for even more vast savings. I see money that could be invested elsewhere, money that would create an even bigger surplus, and money that would make room for big tax cuts for all.
I applaud the long term aim of pegging the Personal Allowance to the minimum wage, but believe the same should be done with the National Insurance threshold. That would really help the working poor and would help address the issue of punitive marginal tax rates that hit those who come off welfare when they get a job.
I found the higher rate “tax cut” hugely disappointing. With the 40p threshold increased by less than the average pay rise it looks set to drag more people into that bracket. The aim should’ve been to raise the threshold to £50,000 as soon as possible, and then only as a first step towards further rises. Instead we have a tax rise in disguise that punishes aspiration. For people who have worked hard for years to achieve such a salary this is a slap in the face.
The top rate should have been abolished too, alas, it is here we run into the serious disadvantages of having a politically clever trickster chancellor; he’s too clever by half. There is no major across-the-board tax cutting agenda because he is concentrating on playing politics in order to occupy more and more of Labour’s territory, and position himself for a bid to become prime minister.
I don’t wish to sound entirely negative. Gordon Brown’s legacy is diminished, the state is shrinking, and the if all goes to plan we will return to fiscal responsibility eventually. Still, it could’ve been so much more…