Well, THAT was anticlimactic, wasn’t it?
For those who pay no attention to politics whatsoever – other than reading this masterpiece of a blog of course – yesterday the Right Honourable Mr. George Gideon Osborne announced the government’s Budget for the financial year ahead. This document contains many things, ladies and gents, but by far the most important is that word which strikes fear into the hearts of princes and paupers alike – taxes.
Now, the Budget is usually one of, if not the most important pieces of legislation of the year. It allows an ambitious chancellor to restructure the UK economy at a stroke, changing the very way in which that shiny stuff we call cash in transferred to and from the vaults of Her Majesty’s Treasury. Judicious use of the Budget can make the reputation of a Chancellor, and of a party too.
But it can also break it. And perhaps that is the reason why this particular Budget has contained virtually nothing of any importance. There is an increase in the Personal Allowance (untaxed income) to £10,500. That is welcome, but is a limited change, considering that such an Allowance still falls more than £5,000 short of covering the minimum wage. The threshold for the top 40% rate of income tax has also been raised slightly, effectively extending the tax break given to low earners to those earning more money. For those lucky enough to fall into the reprieved bracket, such a change will also be more than welcome – for the rest, this is actually a bad thing, as it means less tax revenue for government and therefore more spending cuts to follow. But hey, we’re used to that, right?
Other than this, not a lot has changed. Pensioners can now withdraw their savings as a lump sum rather than an annuity – this makes sense, as it allows people to organise their own spending, but has little actual effect, provided the pensioner in question is able to resist the temptation to spend it all on sweets. Savers have had a break – after long years of irritation over the low 0.5% interest rate, the removal of the 10% starting tax rate on income from savings will surely be welcome. Alcohol duty is down 1%; tobacco duty up 2%. But these are small changes – tinkering at the edges. There is no meat on the rather bleached and sandblasted skeleton of this Budget.
Why is this? Most likely, Osborne is saving himself for next year. For that will truly be a momentous occasion – the last Budget of this Parliament, just a couple of months before the general election in which the record of the first Coalition in Westminster since the Second World War will be tested. Osborne will be desperate to make sure that that budget goes down very well with the public indeed. It could have a huge effect on the outcome of the election, one way or the other, and the government needs as much money in the bank as possible to create a plan which will inspire the public to cast their vote in a favourable manner. The best way to achieve that, at least in the traditional Conservative mindset which dominates the Coalition, is to keep the economy steady and scrimp on spending now so more money will be available in the future. Hence the tinkering.
Oh, and give us a lovely new pound coin to keep everyone occupied. Look! Isn’t it shiny?!
Ahem. In any case, Osborne and co. must have access to data I don’t if they think that their current approach is going to get the economy to a position in just one year that they can provide an attractive Budget in time for the election. Much has been made of the drop in UK unemployment in the last quarter, but it must be emphasised that this is merely a numerical drop. Percentage-wise, it hasn’t budged one iota – it remains 7.2%, currently 2.33 million people. And that figure doesn’t include other dependents, such as pensioners and children. There’s still a long way to go before Britain is working again.
Meanwhile, the government – for all its talk of austerity – borrows more every year, with the result that the UK structural deficit is now 5% of GDP. To put it another way, fully one twentieth of everything this country produces is rerouted to pay off the interest on our national debt. The interest Not the debt itself – not by a long way. Despite this rising borrowing, however, public sector cuts continue. All this begs the question – where the Hell is all our money going?! It would be incredibly cynical even for me to suggest it might be to line the pockets of wealthy elites and Tory business partners, but there it is.
All in all, not very impressed, Mr. Osborne. For your sake, and your Party’s, next year’s Budget had better be a vast improvement.
Now, if you’ll excuse me, I’m off to play with my shiny new twelve-sided pound coin like an obedient corporate puppet.