Nobody would expect a fair budget from George Osborne. The Chancellor was never going to give a budget that benefitted the many over the few, or one that put the realities of everyday life above right-wing economic dogma. Expectations suitably adjusted, we can perhaps take small comfort from the 50p tax band “only” being cut to 45p. Ed Miliband gave a sterling speech in response, and I raise a glass to the intern who wrote the jokes. Professional hacks will be casting their own analysis; what follows is my personal take on some of the details.
The Chancellor’s big spin on this budget is that it “rewards work”. We already know that under-18s are to endure a cut in the minimum wage. In the UK it is possible to work a 40-hour week and still live in poverty. The way to make work pay is, surprisingly enough, to actually make work pay, by implementing a proper living wage. Today we heard no commitment on improving the pay of the low paid. It would be naive to ever expect one from a Tory Chancellor. Increasing the income tax threshold seems reasonable, but not when even the poorest are still hit by VAT, and duty on fuel, alcohol and tobacco. What Osborne gives with one hand, he takes several times over with the other.
Projections for economic growth and for a fall in unemployment are welcomed.I only hope they hold true. As far as I am aware the budget made no specific commitments relating to the latter. I fear that further cuts to the Department of Work and Pensions will only result in more inhumane box-ticking and the harassment of the vulnerable. The Government – as ever – has put all its faith in the hands of the wonderful private sector.
On the 50p rate, the detail most comprehensively leaked, news was always going to be disappointing. Having endured two years of the government chaffing on about deficit reduction, one could at least have assumed that they intended to maximise tax revenue. Basic maths will tell anyone that a 50p rate will raise more by its presence than its absence (“Laffer Curve” / wishful thinking / pseudoscience aside). Osborne himself stated that the rate raised around £1 billion. To me a lot, to him “next to nothing”. Cutting it will cost £100m. That’s a lot of disabled children who will have to go without.
The moral case for the 50p rate is even more clear cut – there can be no reason why someone “earning” in excess of £150,000 per year needs a penny more. Greed can be the only motive, and the one which leads to tax evasion and avoidance. It will be argued that such non-payment means that the tax rate might as well be cut. Just apply this same rational to other crimes such as burglary and murder – “You’re never going to catch every criminal, might as well legalise it!” – to see what a fallacy it is.
Tax evasion is “morally repugnant” according to Osborne. It is hard to shake off that dirty feeling that comes from agreeing with him – especially given those are often my own words. Tax evasion, and avoidance, are both morally reprehensible. They are as much a theft from the community as your typical off-licence robbery, in scale perhaps more so. The problem is that Osborne is the last person I would expect to do anything about it. I fear that despite pledges to the contrary, he will be all talk and no trousers. Every spending decision taken thus far by the government has convinced me that it is a government of the rich, by the rich, for the rich.
Miliband’s best line came when he challenged the government front bench to admit who among them personally benefit from the budget. Furthermore it is worth considering how many prominent Tory donors will also benefit. Such borderline conflict of interest makes a mockery of democracy – and will certainly not be reported in the Tory press. The headlines will trumpet crumbs from the rich men’s table, and ignore the widening inequality that will be a direct result of Osborne’s decisions.
Labour should commit to restoring the 50p band, and to actually getting serious on tax fraud, just as we should commit to renationalising the NHS. Anything less will be to continue to concede to the rightward drift of our national political discourse.
By Chris Nash