Uk politics

Saturday

James Forsyth

Miliband is marching to the wrong drum

Ed Miliband’s decision to address today’s anti-cuts march is a strategic mistake. It makes him look like the tribune of an interest group not a national leader. He’ll also be tarred by association, fairly or not, if these scuffles we’re seeing turn into anything more serious. In his speech, Miliband tried to place the march in the tradition of those for female emancipation, civil rights and against apartheid. But this rhetoric doesn’t work as, given Miliband’s commitment to the Darling plan, we are talking about relatively modest differences about the pace of cuts. One other thing that was striking about the speech is Miliband’s attempt to accuse Cameron of practicing

David Blackburn

Lawson: don’t do it George

Lord Lawson has given George Osborne’s Budget an A-minus. Writing in today’s Times (£), the former chancellor said that his successor ‘got the big questions right’ by sticking to deficit reduction and assisting hard-pressed taxpayers where he could. The only blemish was the carbon price floor for the energy sector, which Lawson describes as ‘nothing less than an anti-growth strategy’.  Also, Lawson warns Osborne against uniting income tax and national insurance. Unsurprisingly, Mrs Thatcher’s great reforming chancellor looked into this measure and is convinced that it is a non-starter. ‘This superficially attractive reform, which is by no means a new idea, was known in the Treasury in my time as

David Blackburn

Marching with no alternative

Thousands have converged on London today, to march against the monolithic evil of ‘cuts’. They have not stated an alternative, a fact that led Phil Collins to write an eloquently savage critique in yesterday’s Times (£). That the protesters are incoherent beyond blanket opposition to the government is not really an issue: as this morning’s lead article in the Guardian argues, the Hyde Park rioters of 1866 weren’t brandishing drafts of the Second Reform Bill. But it’s intriguing that Ed Miliband has decided to address this rally, thereby endorsing it. The Labour party hierarchy recognises that it is taking an enormous and perhaps totally unnecessary risk. First, Ed Miliband’s oratory

Friday

Peter Hoskin

Miliband’s two big risks

Who would have thought it? Miliband’s short speech in Nottingham today went largely unheralded, and doesn’t seem to be getting a whole lot of attention now — and yet it tells us more about his approach to Opposition than almost anything he has said previously. Fact is, the Labour leader is taking two risks that may be either bold or foolhardy, depending on your point of view. These risks could come to define his Labour party. The first is splashed right across the entire speech. Miliband dwells on three “challenges” that the country will face over the coming decade: the “cost of living crisis”; declining prospects for the next generation;

James Forsyth James Forsyth

Welcome revisions to IPSA’s rules

If you want to get an MP going, just ask them what they think of IPSA — the new expenses watchdog. The body is hated: when Cameron joked at PMQs this week that it should be relocated to Croydon there was laughter across the House. IPSA is regarded as rude and inefficient. When Tory MPs were in a particularly grumpy mood before Christmas, David Cameron went to the ’22 and promised that IPSA would either have to mend its ways or be mended. Today’s revisions to the rules by IPSA (£) will go some way to addressing the concerns of MPs. The old rules only allowed children to be treated

Thursday

Matthew Hancock-Mp

What Portugal means for the UK

Last night, Portugal’s parliament voted to reject its latest measures to deal with its deficit. It was the fourth time that the Portuguese parliament had been asked for more taxes and for more spending cuts. The result has been a further loss of confidence in Portugal’s ability to pay its debts. Market interest rates have risen to over 8 percent. European leaders are meeting this weekend to work out a path forward. The lessons for us here in the UK are starkly clear. First, it is better to set out all the difficult decisions needed to deal with the debt crisis, even if these take place over a number of

Matt Oakley

Please sir, can we have some more?

There were few surprises in yesterday’s Budget. As expected, it focused on growth and the majority of the policies announced had been heavily trailed in the weekend newspapers. The fiscal picture did not change much. Potential over-optimism from the Office for Budget Responsibility on inflation and the output gap aside, the Chancellor is still on course to eliminate the deficit by the end of this Parliament.   This is very good news. The biggest danger during a fiscal consolidation programme is that governments water down their proposals due to political opposition or economic difficulties. In a 2009 report, Controlling Spending and Government Deficits, Policy Exchange argued that the preferred ratio

Mats Persson

Cameron’s €4 billion Portuguese challenge

As if the budget and Libya weren’t enough, the UK Government woke up today with another major challenge on its hands – yet another flare-up in the eurozone debt crisis, which has been continuing to bubble away under the radar.   Yesterday, Portugal’s Prime Minister José Sócrates literally walked out of Parliament, during a debate on EU-backed austerity measures. The austerity package was subsequently voted down and shortly afterwards Sócrates announced his resignation. Portugal is now facing the prospect of being without a government for months, as its electoral rules require a 55 day break between the dissolution of Parliament and new elections.   The episode has increased the already

Matthew Sinclair

Merging Income Tax and National Insurance Contributions – Simples?

“I am announcing today that the Government will consult on merging the operation of National Insurance and Income Tax.” The word ‘consultation’ in the Budget drew the longest, loudest sigh from me. Some commentators had hinted that Osborne was considering merging Income Tax and National Insurance Contributions (NICs), which would be a fantastic move towards simplifying our tax system.  Of all the pre-Budget leaks, this was one that sounded truly exciting and innovative.  But, alas, this idea is only in infancy and all that was promised was a consultation.  Of course, the Chancellor can’t rush into this. He has to get this right if it goes ahead, so a consultation

Peter Hoskin

Laws gives another signal on 50p

Usually, the task of David Laws Watch is to judge just how close the former minister is to a return to government. But, today, his article for the FT is worth highlighting for a different reason altogether. Referencing George Osborne’s signals on the 50p rate in the Budget speech, Laws has this to say (my emphasis): “The chancellor also signalled that excessive marginal rates of income tax – of 50 per cent, even 60 per cent – are on their way out. The Treasury believes that the majority of expected revenue from the current top rate is lost in avoidance. But the government is rightly cautious about the timing of

Fraser Nelson Fraser Nelson

Scouring the Budget small print

This morning’s newspapers have a feast of analysis on the Budget. I’ve covered 15 of them, and what journalists normally do is spend the day trawling the small print of the Budget document hunting for stories. But this time, the stories seem to have migrated to the Office for Budget Responsibility’s accompanying report, packed with new analyses and metrics — even disaster scenarios — which those with an interest in UK economics will find useful. The OBR document is now released with the Red Book, and speaks with the authority of government economists who (unlike the rest of us) have had weeks to chew over Osborne’s claims. The OBR must

Fraser Nelson Fraser Nelson

Osborne gets his man

So Martin Sorrell is set to move WPP back to Britain. This was always part of Osborne’s Budget plan, as I revealed in my News of the World column and also mentioned on Coffee House. As I said in the newspaper: “The Chancellor has been on bended knee, pursuing Sorrell with energy that would make Berlusconi blush. ‘What do we need to do?’ he asks. Sorrell’s answer is to cut the tax on overseas profits. So Osborne will, hoping to lure back companies who generate most of their cash abroad.” Today, Sorrell will announce that he’ll come back from Ireland if the Budget is made law. Of course it will

Wednesday

James Forsyth

Osborne’s 50p question

If I was a betting man, I’d fancy wagering that if the economy is growing at a decent clip again by next year’s Budget, Osborne will abolish the 50p rate then. His announcement of a review of how much revenue it actually brings in, strikes me as a move to pave the way for its abolition. This review is, if it is using dynamic models, likely to conclude that the rate is bringing in no, or minimal, revenue and that a lower rate would produce more. This would give Osborne the political cover to reduce the rate. But, as with so much else, this is dependent on growth returning to

Tom Clougherty

On the whole, a qualified positive

To be sure, there was some good stuff in the budget, and I probably feel more positive about it than I expected to. The additional 1 percent cut in corporation tax, above and beyond what had already been announced, was perhaps the high point, although it will be the 1p cut in fuel duty (replacing a planned 5p rise) that draws the most favourable headlines. The rise in the personal allowance, meanwhile, is something the Adam Smith Institute has advocated for a (very) long time. Still, there were, as always, downsides. The goal to make UK corporation tax the most competitive in the G7 is a laudable one, and the

Mark Littlewood

Osborne made a start on deregulation, but there’s a long way to go

This was always going to be a rather modest budget. Having set out the Comprehensive Spending Review last year, the government had already decided its broad plan; we were never going to see much more than some minor tinkering. Nevertheless, as a budget billed as a serious driver for growth, it is a disappointment. George Osborne seems to have a reasonable understanding of the problems that need tackling, but he seems shy of solutions. Concerned about the regulatory burden on business and enterprise, the Chancellor announced that he would reduce the cost of compliance by £350m. But, even on his own figures, this is a tiny slice of the £90bn

James Forsyth James Forsyth

Balls replies with mischief

Ed Balls has just delivered Labour’s Budget briefing. His main point was that the Office of Budget Responsibility now forecasts higher levels of unemployment than it did last autumn. He claimed that this would lead to a £12.6bn increase in spending on unemployment benefit. He also argued that the decision to increase tax thresholds by CPI rather than RPI was an effective tax increase and that it will hit the middle hardest. In a classic piece of Ballsian mischief, he reveled in pointing out that the Office of Budget Responsibility says that it received news of the extra cut in corporation tax and the 1p cut in fuel duty too

James Plunkett

Osborne the Reformer is an unfinished work

One interesting aspect of today’s Budget is the government’s change of tack on personal allowances. Back in June 2010, when the Chancellor committed to raise allowances from £6,475 to £7,475, he chose to cancel out the gains for higher rate taxpayers by lowering the level at which the 40p tax rate kicks in. The idea was to focus the gains of the policy on basic rate taxpayers, making things a little more efficient. The 40p threshold will therefore be lowered from April this year from £43,875 to £42,475 with the result that 700,000 people will become higher rate taxpayers. Needless to say, that’s proved unpopular, and so this time around

Patrick Nolan

Giving up before the race has begun?

How will history judge George Osborne’s second Budget? Once the headline writers have moved on to the next story and the longer-term consequences of the measures become apparent, will this budget be seen as doing the right thing? Unfortunately the answer is, at best, “not really.”   By sticking to the target of eliminating the structural deficit in this parliament, George Osborne got the big call right. As Andrew Haldenby has written, “It’s always easier to set a target at first but as people get tired of austerity there is a real temptation to stop before the job is done. Writing for Reform last year, Paul Martin, the Prime Minister

Peter Hoskin

The big question: has Osborne done enough to deal with inflation?

“We understand how difficult it is for so many people across our country right now.” If you weren’t sure which direction George Osborne’s Budget was going to head in, then he clarified it right from the start of his speech. This was one to tackle the rising cost of living. And much of it — such as the raise in the personal allowance and the fuel duty cut — was welcome. But there is a nagging question hovering above Osborne’s announcement today: has he done enough? The Chancellor will certainly hope so. After all, by scrapping the fuel duty escalator he has effectively encoded a tax cut into all of

James Forsyth James Forsyth

Lib Dems bringing home the bacon

There are a few big Lib Dem policy wins in this Budget, most notably the rise in the personal allowance and the introduction of land auctions. But there are also a few bits of rather unseemly pork barrel politics. Nick Clegg’s Sheffield gets an enterprise zone, which is probably fair enough. But we are also told that ‘following a thorough review, the government is approving the revised Sheffield retail quarter regeneration scheme.’ The south west, which has a disproportionately large number of Lib Dem seats, gets help to keep water bills down. Remote areas of Britain, which is expected to include the constituency represented by the Lib Dem chief whip