Don’t worry about the tax on jobs

I’m not that worked up about the National Insurance increase. Sure, a tax on jobs is the best way to choke a recovery – but this is only due to come in April 2011 by which time Darling will be collecting the royalties on his memoirs. It only matters if the Tories support it, which (I hope) they won’t. It is a wee gesture, to help calm the bond markets. The only fiscally significant mive in this budget is the £550m they intend to raise from inheritance tax.

The giveaways are all planned from April next year – ie, they are little exercises in forcing the Tory hand. Extension of free school meals (£140m) the benefits uprating (£700m) - all things Brown would like a Tory government to do. And he may succeed. Osborne can order the scrapping of anything he likes, including the 50p tax, on day one. But the Tories take the view that it’s too late to stop certain things. Anyway, rather then bleat on about my interpretation here is what both myself, and most other journalists, will look at when compiling the reports you will read tomorrow: Table 1.2. Its the only one that cuts through the spin and tells you what is planned, when, and how much it will cost. (Click on the table to enlarge it)

UPDATE: I may have made an error in my faith in George Osborne. He is saying he would "like" to cut this tax, just as he would "like" to axe the 50p tax. But this is usually code for when the Tories decide to adopt a Labour tax. I do hope Osborne clarifies this. But given that his 50p tax will likely cost billions in lost revenue, he will have to hit the poor to pay it.