Read about the latest UK political news, views and analysis.
What was really in George Osborne’s Budget? Last night we held an event, in association with Aberdeen Asset Management, to discuss just that. Click here for a free pdf copy of the briefing paper produced for the event.
Ed Balls committed Labour to voting against the reduction in the 50p rate at his post-Budget briefing. But he wouldn’t say whether or not Labour would pledge to restore it in their manifesto; sticking to the classic opposition line that all decisions on tax will be made in the manifesto and not before. Balls, though, was on typically pugilistic form; few politicians relish a scrap as much as he does. The Labour leadership clearly view the abolition of the 50p rate as a major political opening for them. Balls went out of his way to attack the HMRC report that Osborne used to justify the move. He mockingly declared that
With every Budget, the early Cameron emphasis on greenery and General Well Being not Gross Domestic Product seems a more distant memory. Today’s Budget showed that, to Osborne at least, growth now trumps these more abstract concerns. So, we saw an announcement that the planning rules would come into force pretty much as planned from next Tuesday. This means that Osborne has simply overridden all the bureaucratic and legal objections from DCLG. Although, I understand that councils who already have a sufficiently pro-development local plan will have a year to adjust to the new rules. Sunday trading rules, a classic bit of General Well Being paternalism, are also
It started like a bit of good old political knockabout. PMQs opened with a planted question from Mark Menzies (Con, Fylde) asking the PM about Britain’s sick-note culture. Cameron, looking suitably grave, declared that the fake-sniffle problem afflicts even senior management. Ed Miliband, he told us, had recently claimed he was too ill to attend a rally called by health workers. Three hours later he was seen heartily cheering at a football match having been driven to the ground in a Rolls Royce. ‘What was it,’ asked Cameron, ‘that first attracted the Labour leader to the multimillionaire owner of Hull football club?’ This prompted howls and jeers from every part
This Budget told us something interesting about the coalition: that there’s more juice left in it than some of us thought. Judging by recent coalition tensions, one might have expected the two parties to devote their time to blocking each other’s proposals. But, instead, they’ve struck a deal that suits both of their political priorities: the Liberal Democrats have got a sizeable increase in the personal allowance, the Tories a 2p cut in corporation tax and a reduction in the economically destructive 50p rate. Interestingly, close allies of the Deputy Prime Minister are now briefing that ‘differentiation’, pointing out where the Lib Dems disagree with the Tories, will be dialled
How significant was this Budget? On an economic level, not very. There’s no discernible impact on growth: all of the main forecasts have more or less stayed the same since the Autumn Statement. Borrowing is the tiniest bit lower, mainly thanks to a £23 billion accountancy trick with Royal Mail pensions. And even many of the policies announced today will barely rouse the Exchequer’s attention. That cut in the top rate of income tax to 45p? It will mean only £100 million a year less in direct revenues. That stamp duty increase for properties worth over £2 million? It will net only £300 million a year. The overall effect is
Brother Jones and Fraser and Pete have already given you some of the useful charts from today’s budget. But the truth of this budget can be summarised quite simply: Everyone Pays More. Here’s the proof, culled from the Red Book: Conservative Home say this shoots Ed Miliband’s fox, proving that the rich will pay more as a consequence of this budget. Up to a point. In pure cash terms, the total impact of the budget may be greater on the wealthiest 10%; in proportional terms it seems to hit those on lower incomes rather harder. Again, however, note this: George Osborne appears to have delivered a tax-raising budget. If Britain
There’s much to applaud in this budget, but as ever we in Coffee House are focusing on things jumping out from the small print. Here are a few things I’ve noticed so far. 1. Don’t mention QE. In his Pre-Budget Report, Osborne was candid about his economic policy: ‘fiscal conservatism, but monetary activism’. That is to say, fiddling about on the margins with taxes, while the Bank of England — 100 per cent owned by the Treasury — is midway through the largest QE experiment ever attempted in the developed world. It is impossible to understand Osborne’s economic policy, his Budget and those it affects without also considering the effects
PMQs and Budget live blog
The coalition has found the second year of co-habitation more difficult than the first and it will find the coming year even more difficult given that House of Lords reform is on the agenda. But today’s Budget is a reminder of the political benefits of coalition. When George Osborne stands up today and announces, for instance, the reduction in the 50p rate he will do so with the support of two parties. Equally, a minority Tory government wouldn’t have been able to get more spending cuts to help finance a tax cut through parliament. It also seems that there should be measures in the Budget to please both Tory and
Thanks to Budget purdah, we’re all in the dark about what will be in George Osborne’s Red Book today. Oh, sorry, that’s wrong, don’t know what I was thinking. Truth is that, unless the Chancellor has some monumental surprises lined up, we’ve actually heard about much of the Budget in advance. We know, for instance, not just that he’ll cut the top rate of tax from 50p to 45p, but also — courtesy of Andrew Grice in the Independent today — the internal political slog by which he reached that decision. Thanks to the proclivities of coalition government, this has to be one of the most pre-briefed Budgets ever. There
The big Budget news tonight is that the personal allowance will rise to £9,205. This is a larger increase than expected and, intriguingly, will be paid for — in part — by a couple of billion more of spending cuts. So, the Lib Dems see considerable progress on their main budget priority, raising the income tax threshold to £10,000, but this will be partially funded by something Tory MPs have been calling for, more spending cuts. It also appears that the coalition will further increase the pace of its corporation tax cuts as well as introducing a new higher rate of stamp duty for £2 million plus houses. There’ll also
With the Coalition taking pre-Budget briefing to new levels you’d be excused for thinking there’s little we don’t know about tomorrow’s statement. But here are four questions we can’t yet answer, and that will be crucial to assessing whether this is a Budget for low-to-middle earners as the Chancellor claims: 1) Will the new increase in the personal allowance be restricted to basic rate taxpayers? When the Coalition raised the allowance by £1,000 back in April 2011 they cancelled out the benefits to those at the top by lowering the 40p tax threshold. The second time around — the £630 increase that kicks in this April — they didn’t. From
The Sunday Telegraph was sensible enough to publish a pleasing article by Brother Hoskin last weekend in which our man took the temperature of political speech-making in Britain today and, concluded, that it is, well, tepid. The speechwriters Pete talked to seem to agree. The decline of the political speech is, for sure, a minority concern. The people are not troubled by it. In any case, journalists, being in the word business themselves, are prone to over-estimating the power of political speech. Except in unusual circumstances, economic fundamentals are more important than Prime Ministerial or Presidential rhetoric. Perhaps the best advice in Pete’s article is that David Cameron should make
Why did Gordon Brown wait until the last few weeks of Labour’s thirteen-year reign to implement a 50p tax rate? Easy. Because it wasn’t so much a fiscal policy as a fiendish trap, designed to cut into a Tory government’s flesh. But now, it seems, the trap has snared another victim: Labour itself. The Telegraph’s Daniel Knowles has already neatly summarised the politics arising from Sam Coates’ report (£) that Labour will neither back the scrapping of the 50p rate nor promise to reinstate it either. But the basic point is worth repeating: if that’s the approach that Labour chooses, then they’ll be left in a complete mess. They can
According to Rachel Sylvester in The Times (£) today, George Osborne’s love of soaking the rich — from the non-dom levy to the tycoon tax – stems from the importance he puts on the ‘empathy’ described in Adam Smith’s Theory of Moral Sentiments. If so, he’d better start re-reading his Adam Smith. Certainly, the Chancellor is familiar with Smith’s other great book, The Wealth of Nations (1776). He wrote an introduction to a recent edition of it. That book is a passionate call for free trade and for open and competitive markets, and a stinging critique of the mutual back-scratching between businesspeople and politicians — what today we would call
Today’s top Westminster read is James Kirkup’s article on the Treasury smart set. It builds a good foundation from which to argue that for all David Cameron and George Osbourne dislike being compared to Tony Blair and Gordon Brown, there remain good grounds for making that kind of comparison. And already we can see, as James says, some daylight between Numbers 10 and 11. Perhaps we should not make too much of this. Cameron and Osborne remain exceedingly close. Even if most Prime Ministers lose patience with thier Chancellors their relationship is not bound to end acrimoniously. Nevertheless, they begin from a position less propitious than that which faced Blair
The Queen has just delivered her Diamond Jubilee address to Parliament, which you can watch below. CoffeeHousers will be terribly disappointed, I know, that the video doesn’t include John Bercow’s lengthy introductory remarks, which didn’t appear to impress David Cameron:
The Illinois primary is today and looks like handing good news to Mitt Romney and poor news to reporters and pundits desperately trying to rustle-up fresh interest in a contest that has been dying for weeks now and certainly since Rick Santorum failed to make an apreciable Super Tuesday impact on Romney’s lead in both actual votes cast and delegates won. This is annoying since Romney is duller than his rivals. No moon-bases or wars on contraception for him, more’s the pity. Romney’s victory will never be total (too much baggage, too much suspicion of his motives for that) but a 40% plurality in a race that has, so far,
A dark, damp and freezing cellar beneath Waterloo station isn’t an obvious choice for launching a political campaign — but that’s where Team Ken officially kicked off their Mayoral bid last night. Various prominent lefties were brought into the Old Vic Tunnels to warm up for the man himself. Eddie Izzard was also present to fill in the gaps and keep everyone engaged until the bar opened. Most of the policies discussed have already been made public, but there were a few new, colourful additions. Ken pointed out that Transport for London purchases energy at half the normal price, so why don’t they buy more and sell it back to ordinary