So, the budget was partly depressing and partly really good news. First, the depressing bits.
Every year I am amazed at how the Commentariat miss the point. They always fixate on one or two issues of detail and completely miss the big picture. They disappear off into the weeds, usually led by the Opposition of whichever political colour. This year they are gorging on the so called Granny Tax and new 45p top tax rate, two reasonably modest elements in the overall picture. The media are absolutely sucking up Labour’s empty agenda. It’s risible. The world is still coming out of economic meltdown and all Labour can find to talk about is a future tax allowance reduction for future middle income pensioners? Is that your main beef, Ed? Really? So everything else is fine then?
And why oh why can the Coalition never get its presentation right? Have they learnt nothing from the NHS reform debacle? They sorely miss an Alistair Campbell figure who innately understands how to present their agenda and can ‘deal’ with the media. Every fucking initiative bar one was leaked. (The problems of competing agendas in a coalition government, maybe?) And the one initiative that wasn’t is what the Left are lying about and exaggerating to death, with a benign media drinking their ludicrous spin. Sort it out, Cameron et al.
Granny Tax – The Facts
The basic personal allowance is climbing and so will overtake pensioners’ additional personal allowances. So something needed to change. And as the IFS has pointed out, pensioners have done pretty well out of the Coalition, suffering much less than the rest of us with generous increases in their pensions. Take your pain, wrinklies. This is a future reduction that will affect future pensioners. From Labour’s briefing which the media have hoovered up you would think that Boy George had actually taken cash away from pensioners as of today. And frankly, one rate of personal allowance for all seems fine now that the rate is going to be so high.
45p Additional Rate – The Facts
Mistake. This was the trap left by Gordon that Georgey Boy had to deal with. We should take all the pain now, down to 40p in one go, otherwise either (a) you continue the pain of the next 5p reduction into one or both of the two budgets left before the election or (b) we get beached on 45p, which isn’t low enough to make us internationally competitive.
Now for the good stuff. Overall, this was a good budget.
The really big news - Unemployment and inflation revised down and UK growth revised up while Eurozone growth is heading the other way. Nice. We're borrowing less and the deficit reduction is slightly ahead of target. A clear focus to stimulate growth by lowering corporation tax and the top rate of income tax (although by not quite enough as already mentioned). All good. Melvin is very happy.
The quite big news - Personal allowances on course towards £10k and the child benefit plan reworked and thus less painful. Good stuff. Personal tax statements will be a game changer in media and public opinion terms when they come in. Trust me on that. When all taxpayers see how much of their hard earned cash is being wasted on crap, there will be a more aggressively focussed view on high spending governments. The foreign rich are being soaked on expensive house purchases which is fine but the Lib Dems’ £2 million mansion tax is not good. This will depress the £1.5- 2.5 million housing market. If they can’t move, then others below them can’t move and so it goes on down the chain. And this will be a problem.
The small print - Future pensioner shit already talked about. Fags and booze - who cares?
He didn’t do everything I wanted him to do, but overall it was a credible job. He's quite a canny one, young George. They just need to sort out their presentation. Fast.