As lead balloons go, last week’s Budget went down faster than James Cameron’s submersible in the Mariana Trench. The closer the small-print scrutiny afterwards, the worse it got. The pro-business measures were hardly sufficient to justify the claim that ‘this Budget unashamedly backs business’ — certainly no small businessman I met that evening, when I found myself addressing 300 of them, felt either backed or bucked by it. The ‘granny tax’ caught far more media attention than the claim that ‘24 million people earning less than £100,000 a year will gain’ from the increase in the income tax personal allowance to £9,205.
It was a tinkering and in some areas irritatingly trivial Budget, in which — to revert to my recent theme of the Titanic metaphor — the deckchairs were not only rearranged but left for the elderly to trip over, while extra lifebelts were being handed to the rich. And I have to align myself with the elderly here, since the Institute for Fiscal Studies says that anyone in their late fifties (that’s me) and upwards, and not in the 50 pence income tax bracket now due to be cut to 45 pence, is among the hardest hit.
So many other annoyances too. No relief on fuel duty, and another pump price record within 48 hours of the Budget speech. Nothing significant to help savers — not even a response to Alex Brummer’s excellent suggestion here of a seriously inflation-busting increase in the Isa allowance, though as a result of a previous announcement it does go up from £10,680 to £11,280 next week. Even those who spend their time raising money to save local churches and historic houses received a blow, in the news of a proposal to end VAT zero-rating on alterations to listed buildings. And those who seek the comfort of hot takeaway snacks after a purse-wrenching tour of the supermarket or visit to the petrol station find they’re threatened with VAT on that too — Greggs, the northern chain baker celebrated for its sustaining pasties, saw £30 million wiped off its share value in response.
I could go on, but you’ve probably had enough. The Chancellor did what he felt he had to do as far as the Lib Dems would let him, sent the right message to the bond markets, and expressed the right aspirations about being on the side of ‘those who want to do better for themselves’. But for the time being he has only succeeded in making life a little more uncomfortable for most of us, without an accompanying sense of fairness in the sharing of the pain. The only consolation was what I took to be a nod in the direction of this column, in a sentence very close to the form of words I urged him to use in my yachting analogy three weeks ago. ‘We must stick to the course’ came only six minutes into the hour-long speech; indeed we must, but if only he’d stopped there.
Talk to the doctors
Medical doctors don’t usually make good politicians: consider the careers of Bashar al-Assad and Liam Fox. But do they make good bankers? President Obama has caused some surprise by nominating a Korean-American physician turned public health expert, Jim Yong Kim, to become president of the World Bank. African countries are promoting the rival candidacy of Nigeria’s first female finance minister, Ngozi Okonjo-Iweala, a perpetual candidate for this sort of job these days, but the White House runner has never lost the World Bank race yet. Kim would succeed the low-profile Robert Zoellick, a safe pair of hands from the Bush family entourage, who in turn took over at short notice from Paul Wolfowitz, the controversial neocon who was forced to resign in 2007 after a scandal over the bank’s employment of his girlfriend.
In my own banking days, I once worked for a doctor, as it happens. He was the former chief surgeon of Malaysia, and he had been drafted in as chairman of the local merchant bank to which I was seconded. A lifetime in the operating theatre had equipped him with powers of concentration that outlasted us all in long credit committee meetings, allowing no sloppy thinking or verbiage: each borrower was a patient under his scalpel. Like engineers, doctors deal in hard data, and that makes them better decision-makers than financiers who deal in evanescent notions of money and value. So it’s odd that there has been so much resistance to the idea of GPs managing large NHS budgets, the core of the Lansley reforms, just as there has been criticism of Kim’s nomination as a ‘backward-looking’ attempt to turn the World Bank back into an aid agency, rather than an engine of market-led development. I’m reminded of an architect friend who was commissioned to design a new wing of a private hospital: ‘Whatever you do,’ the pinstriped chief executive told him, ‘don’t talk to the doctors.’
Kings Cross triumph
My post-Budget gloom lifted when I saw for the first time the new western concourse of Kings Cross station, with its beautiful tree-like steel-and-glass roof. Designed by Glaswegian architect John McAslan, the semicircular, galleried space connecting the original 1852 station to the refurbished Great Northern Hotel makes a dramatic counterpoint to the elegance of the St Pancras Eurostar terminal across the road. Next, the drab 1970s extension on the front of Kings Cross is to be removed, revealing the original façade and creating a new public square. Meanwhile, the reglazing of the train sheds continues, flooding the platforms with natural light.
By the time it’s finished next year, the new-look Kings Cross will have cost Network Rail more than £500 million, out of a total of some £2.5 billion spent by a variety of public- and private-sector entities on converting this dangerous, run-down district of the capital into a stylish 21st-century gateway. The whole project is a triumph of persistence and teamwork as well as sensitive design, and its effect on my spirits is an illustration of the intangible value of good infrastructure investment.
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