George Osborne: Political Mastermind? — July 9, 2015

George Osborne: Political Mastermind?

Even George Osborne’s staunchest critics couldn’t help but admire the political genius of yesterday’s Budget. Osborne announced key measures that were straight out of the Labour Manifesto, including headline policies of a new Living Wage and a crackdown on Non-Doms. His political mastery came by announcing the Living Wage, whilst cutting in-work Tax Credits, which will most likely have a zero-sum impact on take-home pay for low-paid workers.

The Tory Press have lauded the introduction of the Living Wage as a milestone for low-paid workers. Whilst critics have lambasted the changes to tax credits, meaning that the Living Wage isn’t a “Living Wage” after all. Pressure groups should continue to campaign for those at risk and the impact of these changes.

However, the Labour Party has fallen straight into George Osborne’s political trap. Two so-called “front-runners” and “Blairite” candidates for the Leadership have clearly missed the point of this trap.

 

The Tory spinners will lambast Labour for attacking the Living Wage, a policy which they campaigned for (at a lower rate) in May. The Tories have given the nation a pay-rise and if Labour want to gain any political capital they cannot attack this policy.

The attack line has to be solely on the changes to tax credits and where the Tories have chipped away at people’s incomes – not at the Living Wage.

It may be a very subtle point, but it will speak volumes with electorate. 

Labour candidates and supporters seemingly once again need reminding that there are voters outside of the “Westminster Bubble” and the “Twitter Echo-Chamber”

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Trying to second guess Ed Balls’ logic — April 18, 2012

Trying to second guess Ed Balls’ logic

I might be being overly generous here, but perhaps Ed Balls is playing a political master-stroke today.

He and the ever grating Rachel Reeves have tabled an amendment to the Finance Bill which will be debated today. His proposal which you can read here will remove the 45p tax band from 2013. Leaving the top rate of tax officially undecided, or 40p, the next highest band.

But maybe, just maybe it’s a clever move by Balls. Surely the Conservative’s will have to oppose the move, because they have just published a budget calling for a 45p tax band. If they could have afforded to cut the band to 40p, surely they would have done so? So, by calling out the Tories to back a 40p band and then them backing higher taxes, can Balls and Miliband spin their cock up against Osborne and Cameron. Tories voting in favour for higher taxes (as opposed to Labour’s scrapping off it) won’t sit well if it comes out in the media with grass root voters.

As I said, maybe I’m just being kind, maybe its yet another cock up by the ever incompetent Keynesian. After all, they did technically abstain on the bill in the past.

A budget for the millions; and the millionaires? — March 21, 2012

A budget for the millions; and the millionaires?

Here’s a VERY brief review of the 2012 Budget.

Overall, I was very impressed with the Budget. The biggest criticism I have has been how it has been leaked to the media in the past week. This needs to stop!

Today’s budget ensures that overall the wealthy will pay more in tax. Five times more in fact. They may be receiving a tax cut, but they will pay more overall in tax. But crucially it has taken TWO million people out of income tax all together. It is a budget for the millions.

Cutting the 50p tax rate

Osborne noted that £16bn had been shifted into the previous tax year to avoid the 50p tax band, and an additional £1bn had been avoided this year. Self-tax receipts were poor. He abolished the 50p tax rate and introduced a 45p band (from April 2013), which the OBR predicts will raise 5 times as much in revenue. Raising more in tax revenues is great news for everybody in society. (Read here for an explanation of the Laffer Curve.)

At the same time he announced a crack down on tax avoidance and an increase in stamp duty avoidance (up to 15%)

Stamp Duty

7% on £2m homes. That’ll please Vince Cable you have to imagine.

Raising the tax allowance

Osborne announced the largest ever increase in the personal allowance in history. A £1,100 increase to £9,205. This ensures that over 2 million people won’t pay income tax at all. It’s great news for ordinary workers as well, giving the everyday person more cash in their pocket.

Child benefit

Altering the current scheme, which had its flaws to ensure that child benefit to be reduced incrementally when one member of household earns more than £50,000. And that it will be removed completely at £60,000. Good news. Universal benefits are a shocking idea.

Sin taxes

A mixed bag here. No additional increase to alcohol duty, but then a whopping 5% increase on cigarettes. That’s 37p per pack. I’d like to reaffirm my belief that the Government should have no influence on what people do to their bodies, however much revenue it raises for them.

Corporation Tax

Cut from this April to 24% with future tax cuts in the years to come. This is a pro-growth and a pro-business move. It’s exactly what we need in the tough times we live in. It will also make the UK one of the cheapest places to do business in the G20.

Enterprise loans

Osborne is planning to set up an enterprise loan fund, similar to the student loan company for young entrepreneurs who need help starting up. This was an idea banded around last year and gained popular support from people like Richard Branson. Again, another good idea, we need to stop the university culture in the UK and encourage students into business and apprenticeships as well.

Welfare

Slashing £10bn by 2016 from the Welfare Budget. The welfare budget is incredibly high that’s for sure, accounting for 1/3 of public spending. It is unsustainable, we have to save money somehow on welfare, but the decisions on how to do this need to be looked at carefully. Scrapping universal benefits is a good starting point.

Miscellaneous

Tax credits for video games, animation and TV production in the UK. Another pro-growth and pro-business move.

Bank levy to be increased to 0.105% from next January, raising £2.5 billion a year. Taxing the banks, leaving Labour with nowhere to turn.

Where next for Labour?

Who knows? They cannot oppose a tax cut that will raise more revenue. They cannot oppose the personal allowance, the corporation tax cut or the bank levy. Worrying times ahead for Ed Miliband and co.

Tax cuts for the rich; pay cuts for the poor — March 18, 2012

Tax cuts for the rich; pay cuts for the poor

Same old Tories, ey? Well, only if you believe the spin that the Left are pedalling.

The 2012 Budget has caused a lot of debate already, and its not officially announced until Wednesday. But lets have a look at two policies that almost seem certain to be included in George Osborne’s budget.

Cutting the 50p tax rate

There has been a lot of speculation over the past month that Osborne is set to cut the 50p tax band. His reasoning for this is that en masse people have avoided paying the tax. To clarify, tax avoidance is legal. Now you can complain that those avoiding tax are morally bankrupt and avoiding paying their dues to society until the cows come home, but regardless, its still going to happen. The tax rate was introduced by the last Labour Government as a temporary measure to raise extra revenue for the state. And yet, it is rumoured that this isn’t the case. Rumours are that the Treasury is losing out on £500m a month due to tax avoidance. By lowering the tax rate, the Government hopes to recoup more tax, which can then be used to redistributed to those most in need. £6bn a year is a hell of a lot of money! Even if these rumours turn out to be unfounded, if it turns out the 50p tax rate is losing even a penny in revenue for the Treasury it should be cut. To keep the 50p tax band would be a shambolic symbol that we in Britain are against success, we envy the rich and we oppose wealth creation. So yes, it is a tax cut for the rich, but when the dust has settled it will be society who has benefited.

Ending National Pay Bargaining

On Saturday it was announced that the Government would end National Pay Bargaining. The Public Sector in the UK is a sacred cow, much like the NHS. Any reform is met with staunch criticism. Six million people are employed by the state, a figure that in itself is incredible. In some areas in the UK public sector workers are paid 18% more than their private sector counterparts. Inequalities between the two sectors causes tensions between people. The details of the policy are still very sketchy, but localised pay should be praised, not blindly opposed. Public sector workers in the South East need to be paid more than their counterparts in the North East, it is common sense. The costs of living between the two regions are diametrically different, so it makes sense that their pay should be separated.

So there we go, don’t believe the torrid nonsense about the same old nasty Tories, put your brain into gear and see what the policies are really about!