A bite-size deciphering of George Osborne's plan to save the economy.
For a political journalist, watching George Osborne deliver today’s budget speech was like tuning into an afternoon re-run of Casualty; a two-bit chancellor with a walk-on part skulking around on the tracks while you wait for the inevitable train wreck. The Tory government’s still squirming to justify its Plan A economics – that spending cuts will lead to lower government borrowing – while the country burns and the UK’s growth forecast is slashed.
What did we get in the budget? An extra £2.5 billion in spending cuts for government departments. Good news, though: the government isn’t going to set a minimum price for alcohol, which was planned for 45p per unit, or £2.03 for a can of Kestrel Super Strength blackout beer. Alcohol duty will be dropped £0.01 on the pint from Sunday. And no beer duty escalator! (Which sounds like fun, but increases beer tax at over inflation rates.)
And the personal tax allowance (the amount that you can earn before you start getting taxed) will increase from £8,105 to £10,000 next year. That’s good to know when you’re trying to stomach the top tax rate being cut from 50p to 45p this April, which will give the country’s highest earners the largest tax break in percentage terms.
The point is, the UK’s post-credit crunch recovery has been the worst of any recession and Osborne refuses to change his strategy: “It is taking longer than anyone hoped, but we must hold to the right track,” he said earlier. The timetable for reducing government spending to the point where we don’t have to borrow money just to get by has been extended from 2015 to 2017, and then 2018 (and by the looks of things, we're not going to hit that target either). By the time the Tories balance the budget, you will be at least five years older, probably five years poorer and more likely to have a husband/wife/child/ailing parents to support.
The Office for Budget Responsibility had to write to David Cameron a few weeks ago to explain the situation: “For the avoidance of doubt … tax increases and spending cuts reduce economic growth in the short term.” You’ve got industry figures, the International Monetary Fund and even senior members of the cabinet doubting the government’s Plan A economics while calling for more investment and slower cut backs. In fact, probably the only two people left in the country who still believe austerity hasn’t impacted growth are Osborne and Cameron.
This is a government that has made some 30 U-turns since it took power in 2010, on everything from rape anonymity for defendants, to free school milk (which we’re still giving to under-fives), but here they’re going to stay on course regardless.
Despite the raising of that personal tax allowance and the token concession of not making your alcoholism too expensive to maintain, it's easy to be negative about Osborne's new budget. But while there's less money for things like disabled people's benefits and nurses' wages, if you're a Tory boy or girl, things are really looking up. Cameron’s been good enough to lower the top tax rate, so that’s five percent off anything you earn over £150,000 from April onwards – a £42,500 bung for those of you who are taking home a million quid a year. It means that of all the tax rate changes taking place on the 6th of April, those who are earning over £500,000 get the biggest year-on-year earnings bump – 6.6 percent compared to a 1.8 percent increase for those earning just £20,000.
If you spend the weekends driving your Jaguar between Chipping Norton gastro-pub fires and Moet-sponsored polo after-parties, here’s some quick advice on how to spend that Cameron surplus.
Stockpile Enough Narcotics to Kill the Inhabitants of Guernsey
Buy 1,062 grams of cocaine or MDMA, over 2,000 grams of mephedrone or 4,250 grams of amphetamines. Do as many of them as you can before you start to sweat blood and your heart explodes. Then get a private doctor to replace it with a poor person's and do it all over again.
Pay for Those Essential Estate Upkeep Costs
Douglas Hogg can spend his extra dosh having the prole-proof moat around his mansion cleared. He could also pay the mole catcher, tune his piano, service the Aga, repair the stables, pay the house keeper, hire a jam boy to keep the bees away, get the lawn mowed and cover pretty much all of the housekeeping costs he used to stiff the tax payer with prior to the expenses scandal.
Eat Lunch in the Carlton Club’s Churchill Room
Budget day lunch “off the trolley” at “the oldest, most elite and most important of all Conservative clubs” is Castle Mary Beef with Yorkshire Pudding, for the princely sum of £15.25. Parliament sits for roughly 99 days a year, so ministers can scoff away every time they’re in town for an entire term and still have £36,461 change. Which you can probably just burn.
Struggling to read this through tears? Cheer yourself up:
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