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| The budget: look out for even more of George Osborne's sham pledges | The budget: look out for even more of George Osborne's sham pledges |
| (about 2 hours later) | |
| Almost everything about tomorrow's budget will be bogus. Neither the big numbers nor the pernickety tax changes are intended to do what they pretend. Phoney future promises of extreme stringency will not be kept – only useful for taunting Labour to follow suit. After four George Osborne budgets, we are well used to sham pledges to help the lowest earners that in truth give most to the better off. After "all in it together" expect some new ersatz trope to sound "in touch with ordinary people" while secretly advantaging his own voters. | Almost everything about tomorrow's budget will be bogus. Neither the big numbers nor the pernickety tax changes are intended to do what they pretend. Phoney future promises of extreme stringency will not be kept – only useful for taunting Labour to follow suit. After four George Osborne budgets, we are well used to sham pledges to help the lowest earners that in truth give most to the better off. After "all in it together" expect some new ersatz trope to sound "in touch with ordinary people" while secretly advantaging his own voters. |
| Big numbers first. Because the coalition is committed to shrinking the deficit with cuts, not by raising taxes, government plans lay out a monumental 60% more cuts, stretching far ahead, biting through to the marrow. These are so unthinkably deep that the Institute for Fiscal Studies (IFS) says it can't and won't be done, or not by any government. Here's why: the departing chief executive of NHS England, Sir David Nicholson, warns of a service on the cliff edge of collapse by 2015. His call for a £5bn bung is seen by many as far too modest for the crisis reconfigurations planned. Just keeping the NHS on a ventilator before the election will need emergency money. | Big numbers first. Because the coalition is committed to shrinking the deficit with cuts, not by raising taxes, government plans lay out a monumental 60% more cuts, stretching far ahead, biting through to the marrow. These are so unthinkably deep that the Institute for Fiscal Studies (IFS) says it can't and won't be done, or not by any government. Here's why: the departing chief executive of NHS England, Sir David Nicholson, warns of a service on the cliff edge of collapse by 2015. His call for a £5bn bung is seen by many as far too modest for the crisis reconfigurations planned. Just keeping the NHS on a ventilator before the election will need emergency money. |
| Age UK, surveying the depth of the care crisis, finds ever fewer of the frail receiving any help at all: more cuts would create embarrassing scandals of neglect. Overloaded social workers deal with a 68% rise in children on protection orders: any deeper cuts would soon see child death inquiries blaming the government. Extra school places needed within five years have risen to 81,000, says the Tory-led local government association. Some imminent crises are well hidden until they erupt: the Howard League for Penal Reform warns of tinderbox prisons where cuts leave one guard in charge of 150 prisoners.Wherever you look, though, avoidable political risks are piling up. | Age UK, surveying the depth of the care crisis, finds ever fewer of the frail receiving any help at all: more cuts would create embarrassing scandals of neglect. Overloaded social workers deal with a 68% rise in children on protection orders: any deeper cuts would soon see child death inquiries blaming the government. Extra school places needed within five years have risen to 81,000, says the Tory-led local government association. Some imminent crises are well hidden until they erupt: the Howard League for Penal Reform warns of tinderbox prisons where cuts leave one guard in charge of 150 prisoners.Wherever you look, though, avoidable political risks are piling up. |
| No wonder the IFS is highly sceptical that any government can deliver another 60% of cuts: it's a phoney plan. Osborne's timetable for eliminating the deficit is just as fraudulent. He got away with a two-year slippage with no political fallout, and must surely reckon he can do it again. The IFS expects taxes to rise after the election whoever wins, pointing out that almost all new governments do it, but that won't be pre-announced. The chancellor walks a tricky tightrope: on one hand he pretends the economy is stronger than it is, denying how much new growth is built on asset bubbles with no sign of a "march of the makers". At the same time he pretends the screw needs to be tighter on future spending. | No wonder the IFS is highly sceptical that any government can deliver another 60% of cuts: it's a phoney plan. Osborne's timetable for eliminating the deficit is just as fraudulent. He got away with a two-year slippage with no political fallout, and must surely reckon he can do it again. The IFS expects taxes to rise after the election whoever wins, pointing out that almost all new governments do it, but that won't be pre-announced. The chancellor walks a tricky tightrope: on one hand he pretends the economy is stronger than it is, denying how much new growth is built on asset bubbles with no sign of a "march of the makers". At the same time he pretends the screw needs to be tighter on future spending. |
| His purpose in presenting artificially tough plans for the next few years is to push Labour into a ruthlessly tight corner on spending, tax and capital borrowing. So far Labour is standing firmer than it did in 1997: Ed Balls says he will not be backed into a "read my lips" general pledge not to raise taxes. Nor will he be bullied into a cap on borrowing for capital investment. He will not fall into other crude traps Osborne will lay tomorrow, such as a binding vote on a welfare cap and a budget surplus date. Almost nothing the chancellor says tomorrow will be what it seems, all of it a political game. | His purpose in presenting artificially tough plans for the next few years is to push Labour into a ruthlessly tight corner on spending, tax and capital borrowing. So far Labour is standing firmer than it did in 1997: Ed Balls says he will not be backed into a "read my lips" general pledge not to raise taxes. Nor will he be bullied into a cap on borrowing for capital investment. He will not fall into other crude traps Osborne will lay tomorrow, such as a binding vote on a welfare cap and a budget surplus date. Almost nothing the chancellor says tomorrow will be what it seems, all of it a political game. |
| Let's look at the smaller frauds in this budget. Osborne will announce more of the low-paid to be lifted out of tax: that sounds so admirable that the former Lib Dem minister Chris Huhne, writing in the Guardian, quarrelled with Osborne over which coalition party deserves the credit for what they both know is a synthetic policy. As Resolution Foundation research shows, 5 million of the low-paid get not a penny more. Only 10% of the high cost of this policy goes to lifting anyone out of income tax. Only 15% of the money goes to anyone earning less that the £26,000 median, the rest all goes up the scale to above-average earners. Universal Credit sees every penny of a tax cut taken away in lower credits. National insurance kicks in at £8,000 and is more regressive, yet Clegg wants the tax threshold raised yet more, positioning the coalition as egalitarians. The staggeringly reckless cost is £11bn a year: if genuinely spent on low-income families, it might have avoided the extra 700,000 children descending into absolute poverty that the IFS predicts by next year. | Let's look at the smaller frauds in this budget. Osborne will announce more of the low-paid to be lifted out of tax: that sounds so admirable that the former Lib Dem minister Chris Huhne, writing in the Guardian, quarrelled with Osborne over which coalition party deserves the credit for what they both know is a synthetic policy. As Resolution Foundation research shows, 5 million of the low-paid get not a penny more. Only 10% of the high cost of this policy goes to lifting anyone out of income tax. Only 15% of the money goes to anyone earning less that the £26,000 median, the rest all goes up the scale to above-average earners. Universal Credit sees every penny of a tax cut taken away in lower credits. National insurance kicks in at £8,000 and is more regressive, yet Clegg wants the tax threshold raised yet more, positioning the coalition as egalitarians. The staggeringly reckless cost is £11bn a year: if genuinely spent on low-income families, it might have avoided the extra 700,000 children descending into absolute poverty that the IFS predicts by next year. |
| Ex-chancellors Lawson and Lamont join the Daily Mail in protesting against raising the personal tax allowance on the lower paid – but not for the right reasons. They want the "middle classes" on £41,866 to be saved from being dragged into the 40p tax bracket. We must presume ex-chancellors are not innumerate, in which case they must know what they say is balderdash. Those recently pulled into paying 40% are still gaining more through the rise in their personal tax allowance than they lose from paying 40p on the top small slice of their earnings. | Ex-chancellors Lawson and Lamont join the Daily Mail in protesting against raising the personal tax allowance on the lower paid – but not for the right reasons. They want the "middle classes" on £41,866 to be saved from being dragged into the 40p tax bracket. We must presume ex-chancellors are not innumerate, in which case they must know what they say is balderdash. Those recently pulled into paying 40% are still gaining more through the rise in their personal tax allowance than they lose from paying 40p on the top small slice of their earnings. |
| The reality is that the better off gain either way, so this is a phoney war entirely about politics. As few voters fully understand the tax system, should the coalition pretend to help the low-paid or flamboyantly proclaim it is helping its own kind, and the 15% of higher earners, of course? | The reality is that the better off gain either way, so this is a phoney war entirely about politics. As few voters fully understand the tax system, should the coalition pretend to help the low-paid or flamboyantly proclaim it is helping its own kind, and the 15% of higher earners, of course? |
| Labour is not above its own bogus budget promises: restoring the 10p tax rate is heralded as a bonus for the low-paid – but its effect is almost the same as raising the personal tax allowance. What's more, the 10p rate will be paid for by abolishing one of the coalition's most fraudulent policies of all – the marriage tax allowance. That doesn't do what it says either. The promised £3.85 a week will go to just a third of married couples, only one in six families with children, fewer than a million. A third of winners will be pensioners. Does it encourage marriage? The philandering father on his third wife wins, while his two abandoned wives and children get nothing. Never mind, it sounds good in the Tory backwoods. | Labour is not above its own bogus budget promises: restoring the 10p tax rate is heralded as a bonus for the low-paid – but its effect is almost the same as raising the personal tax allowance. What's more, the 10p rate will be paid for by abolishing one of the coalition's most fraudulent policies of all – the marriage tax allowance. That doesn't do what it says either. The promised £3.85 a week will go to just a third of married couples, only one in six families with children, fewer than a million. A third of winners will be pensioners. Does it encourage marriage? The philandering father on his third wife wins, while his two abandoned wives and children get nothing. Never mind, it sounds good in the Tory backwoods. |
| Osborne's gift horse of a new £1bn in childcare needs looking in the mouth too. Its pretended intent is to help women who most need to work: Britain is third from bottom on OECD tables for mothers in jobs. But three-quarters of the new £1,200 per child again goes to higher earners, right up to couples on £300,000, excluding any working parent earning too little to pay tax. | Osborne's gift horse of a new £1bn in childcare needs looking in the mouth too. Its pretended intent is to help women who most need to work: Britain is third from bottom on OECD tables for mothers in jobs. But three-quarters of the new £1,200 per child again goes to higher earners, right up to couples on £300,000, excluding any working parent earning too little to pay tax. |
| If voters are jaundiced, ears blocked to Westminster politics, is it any surprise? Their instinct that budgets are smoke and mirrors will be justified tomorrow. Not only the big numbers with grim forecasts of future austerity and shallow overboasting of renewed growth, but most of the small things will be counterfeit, spurious eyecatchers designed to deceive. | If voters are jaundiced, ears blocked to Westminster politics, is it any surprise? Their instinct that budgets are smoke and mirrors will be justified tomorrow. Not only the big numbers with grim forecasts of future austerity and shallow overboasting of renewed growth, but most of the small things will be counterfeit, spurious eyecatchers designed to deceive. |
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