George osborne

Tuesday

Anthony J-Evans

Three principles that should underpin the Budget

As I see it, there should be three simple principles underpinning George Osborne’s Budget tomorrow. Let’s take them one by one: 1) Variations in household wealth mean that policies aimed at affecting the wider economy will often have unpredictable political effects. Economists have a tendency to imply that changes in GDP affect everyone uniformly, but this isn’t the case. What’s more, journalists are quick to highlight extreme case studies that make good stories, but they can misrepresent the actual picture. Policy will do a lot to influence the economic climate, but the local economic weather will be more relevant to taxpayers. At the same time, the recovery can’t be managed

Matthew Whittaker

Spiralling inflation continues to squeeze some more than others

The February inflation figures spell more bad news for living standards in the UK. With average weekly earnings growth standing at just 2.2 per cent, millions of workers continue to get poorer in real terms. However, differences in the make-up of typical “shopping baskets” mean that the spending implications of inflation vary by income group. Since 2007, inflation has been driven primarily by increases in food and fuel prices. Given that such staples account for a larger share of weekly expenditure among lower income households than among higher income ones, the impact is felt more acutely in the lower half of the income distribution. The below chart details the impact

Ed Holmes

Allowing growth, not forcing it

What is a “Budget for Growth,” and how can one be delivered? These questions have been preoccupying civil servants across Whitehall, policy folk in think tanks, and the press since the coalition announced in November that it would be reporting back on its “Growth Review” in the 2011 Budget. While foreign events rightly moved discussion of the impending Budget further back in last weekend’s papers, there was extensive coverage of the potential for targeted tax cuts and reliefs and incentives targeted at particular industries or sectors. The obvious problem with a number of these is that they cost money, and this is something the coalition does not have in spades.

Peter Hoskin

Your five-point guide to tomorrow’s Budget

From rescue to recovery — that’s how George Osborne is selling his Budget ahead of its release tomorrow. But what might we see beyond the rhetoric? Here’s a five-point guide for CoffeeHousers:   1) Growth. It almost feels like a tradition now: a new Budget, and a new set of forecasts from the Office for Budget Responsibility. Chief among them will be what the OBR says about growth. Its previous forecast for 2011, made last November, was for 2.1 per cent growth in 2011 — but that will almost certainly be downgraded after the mini-slump in the fourth quarter of last year. As this graph shows, the average of the

Fraser Nelson Fraser Nelson

Inflationary troubles ahead of Osborne’s Budget

Unwelcome news for George Osborne: he will tomorrow present his Budget against a backdrop of the highest inflation for 20 years. The RPI index — what the nation called “inflation” until Brown changed the definition — is 5.5 per cent. It hasn’t been this bad since the aftermath of the ERM crisis, an unhappy comparison for the Tories. The CPI index is up to 4.4 per. And those who deploy the usual arguments about global food prices are spiking might wonder: why is Britain now even worse off than Greece?     Even the Zimbabwean media is laughing at us (their inflation is now considerably lower than ours). It’s shocking,

Monday

Patrick Nolan

Here’s how Osborne should reduce the tax gap

Some commentators have argued that the right way to reduce the deficit is to take on large scale tax avoidance rather than public spending. The argument goes that large companies are shirking their responsibilities, while families and small businesses carry the burden of rescuing the public finances.  Yet the evidence on who is actually avoiding tax does not support this. For example, HMRC data show that three-quarters of the £40 billion tax gap (the difference between the amount collected and the amount that should be collected) is due to VAT, Income Tax, National Insurance and Capital Gains Tax. Reducing the tax gap not only requires a focus on the big

Sunday

James Forsyth

Why Osborne is so interested in merging income tax and National Insurance

When trying to understand George Osborne Budgets, you need to bear in mind the mantra that he and his team live by: in opposition you move to the centre, in government you move the centre. It is this desire to move the centre ground that lies behind Osborne’s keenness to merge income tax and national insurance. As I say in the Mail on Sunday, the thinking behind it is that if people were more aware of how much tax they really paid, they’d be more inclined to vote for low-tax parties. At the moment, National Insurance is one of the taxes people are least aware of as it is simply

David Blackburn

The allies converge on Gaddafi

George Osborne appeared on the Andrew Marr show this morning to introduce the Pledge of his Budget magic trick. But Marr and his viewers wanted talk about the show of military strength over Libya. Osborne reiterated that the government is committed to enforcing the UN Resolution and had no plans to deploy ground troops at this stage. He refused to rule out the use of British ground forces in the future. Privately, officials are trying to dispel the perception that the UN Resolution forbids the use of Special Forces commandos to assist the bombing campaign. The Resolution does not permit an occupation, but it would be very surprising if covert

Fraser Nelson Fraser Nelson

George Osborne’s Budget magic trick

Spare a thought for George Osborne and Danny Alexander. They had their own budgetary magic show planned for Wednesday, and were yet again planning to be the Paul Daniels and Debbie McGhee of British politics. Now, it looks like they’re going to be competing with exploding Libyan MiGs for the national attention. This Budget was, as James says in his cover story this week, the government’s great hope for getting itself back on track. Grabbing the newspaper headlines, resetting the narrative etc. Now, the budget will be overshadowed by war. These Tomahawks don’t come cheap and Osborne has pitifully few cards to play. He knows that his budget will not live

Friday

David Blackburn

The world according to Alistair Darling

There was a time when  “http://blogs.wsj.com/iainmartin/2010/04/30/alistair-darling-labours-caretaker-leader-in-waiting/”>commentators on the right thought that Alistair Darling may become Labour leader, such was the respect he commanded. Alone among Brown’s Cabinet, Darling rose above the ideological opportunism and infighting to emerge with his reputation enhanced. Darling is ready to tell of his part in New Labour’s downfall. This morning’s Independent “http://www.independent.co.uk/news/people/profiles/alistair-darling-we-were-two-hours-from-the-cashpoints-running-dry-2245350.html”>previews the book by interviewing the former chancellor. Typically, perhaps, for the studious-looking Darling, he is not ‘spicing things up’ (it’s rather wonderful that he doesn’t use a derivative of ‘sex’ here). He promises to the ‘write the story down’ and is adamant that there will be none of the ‘gratuitous kiss and tell stuff’. Other than

Thursday

Peter Hoskin

Another Budget snippet

Benedict Brogan’s latest post is built around an observation from Jo Johnson on the 50p rate, yet it is Brogan’s own observation that gets a place in our Budget scrapbook: “Some people I have spoken to think George Osborne might be sufficiently worried about the growing exodus of entrepreneurs to put down a marker on 50p in the Budget next week.” Whether this “marker” transpires — and what it might look like, if it does — is something we shall have to wait for. In the meantime, it’s worth noting that Labour have already set a marker on 50p: that it will have to remain for the duration of this

Peter Hoskin

Actually, there’s some solace for Miliband in today’s poll

Much excitement, today, about the fact that Ed Miliband is just as unpopular as Nick Clegg. A pre-Budget package by Ispos-MORI contains the finding that both party leaders are actively disliked by 51 per cent of the public. It’s a striking result, particularly after the tuition fee furore — yet, sadly, it isn’t new. It actually comes from the political monitor that Ipsos MORI released in January. They didn’t ask the question for their March political monitor. So far as the Clegg-Miliband divide goes, the latest Ipsos MORI figures actually have this to offer us: net satisfaction with Miliband’s performance as party leader is at -5 per cent, whereas it’s

Peter Hoskin

Osborne’s grand merger?

George Osborne’s Budget — his plan to deliver us from “rescue to recovery,” apparently — is less than a week away, and the wildfire of speculation is taking hold. Perhaps the most intriguing titbit in today’s papers is one that also appeared in the Express last Saturday: that Osborne is considering merging income tax and national insurance. This is a measure that the Office for Tax Simplification recommended in a report last week, suggesting that it would ease the administrative burden on small businesses. Yet that simply echoes a viewpoint that stretches back decades. This IFS report, for instance, quotes an article published by the British Tax Review during the

Thursday

Fraser Nelson

Our monetary policy needs sorting — and quick

Today’s decision to leave base rates at an emergency 0.5 per cent — the lowest since the Bank of England was founded in 1694 — shows how Britain is running out of options. Not even Mervyn King would deny that Britain has an inflation problem: global prices may be up, but the UK seems to have been hit worse than almost any major economy, as I blogged yesterday. With food prices up by 6.3 per cent and CPI inflation by 4.1 per cent, what’s happening to prices? The below graph, again out today from a FTSE350 survey, suggests that pay is up by just 0.5 per cent in the private

Tom Clougherty

High tax Britain

The government says that the forthcoming budget is going to be all about growth. And rightly so: the economy is still in the doldrums, and without much stronger growth than we are currently witnessing, the coalition has no hope whatsoever of balancing the budget by 2015. But few of the measures being trailed in advance are likely to have much effect, so long as Britain is stuck with a highly uncompetitive tax regime.    International tax surveys highlight just how bad our comparative situation has become. According to KPMG, out of the 86 largest economies in the world, we now have the fourth highest top rate of tax. Even more

Wednesday

Fraser Nelson

Labour’s inflation pitch

Curiouser and curiouser. We in Coffee House have been saying for some time now that – whatever Mervyn King thinks – Britain has the worst inflation in the Western World apart from Greece. An OECD report out today shows we’ve got it worse than most eastern countries too. Korea, Turkey and Estonia are the only eastern nations with higher inflation: But what strikes me most about today is that food prices are soaring here, to an extent far worse than the rest of the world. This is what voters notice most: putting food on the table is very expensive. As Micawber might put it: annual food price inflation 6.3 per

Tuesday

Peter Hoskin

Some context for those police cuts

What’s it to be? Take a pay cut, or lose your job? That, as David suggested earlier, is the question being posed by Theresa May to police forces – and it’s a question that they cannot shirk. With the police budget being cut by 4 per cent a year, there have to be reductions of one sort or another. And if they don’t come from pay restraint – along the broad outlines of Tom Winsor’s review today – then there will no doubt have to be extra job losses. This is the argument that George Osborne set out in his 2009 conference speech, only now it’s being deployed from government.

Sunday

Fraser Nelson

Why Ed Miliband’s getting it right on the cost of living

George Osborne’s budget, due in two weeks’ time, will be billed as an agenda for growth. This is welcome, but a year late. The burning agenda now is the cost of living. It was our cover story for The Spectator last October: why fret about mild 1 percent-a-year cuts, we asked, when the real killer will be prices? Petrol at 130p a litre is only the most visible sign of this. Other horrors confront shoppers in the supermarket – salmon fillets up by a third, potatoes and butter by a quarter. When Alan Duncan speculated that petrol could hit 200p, he was on the right scent. While the BBC is

Saturday

James Forsyth

Osborne’s political economy

George Osborne’s speech to the Tory spring conference today showed the classic left-right way in which he wants to frame the political debate about the economy ahead of the Budget on the 23rd of March.  In a move straight out of the election-winning centre-right playbook of the 80s, he attacked Balls and Miliband as “Two left-wing politicians who don’t understand anyone who wants to get up and get on, anyone who want a better life for their family, anyone who want to create wealth, and start a business, and create jobs, and leave something to their children.” He tried to portray the Conservatives as the antithesis of this, as the

Friday

Peter Hoskin

Fuel for the fire

On any normal day, a missive from Tim Farron to George Osborne – urging him to axe the planned rise in fuel duty – would be striking enough. On a day when the Lib Dems finished sixth in a by-election, it has a whole lot more piquancy to it. I’m not saying that the Next Lib Dem Leader™ is trying to cause trouble, or even hastening to shore up support. He has, after all, been dutiful in defence of the coalition this morning, and he has been highlighting fuel costs for some time now. But Lib Dem backbenchers clearly have some demands for the government – and now’s the time