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George Osborne’s careless Autumn statement

alls and OsborneWould you trust someone with the economy when they don’t know what season it is? Well, the British electorate did as as it’s winter that means Autumn Statement time! How exciting. Alas, a bravura performance from George Osborne it was not. Forced to backpedal on collapsing tax revenues and missed deficit targets, while throwing in the bingo phrases – “the mess we inherited“, “Labour’s recession“, and “long-term economic plan“, it was enough to keep the Tory benches in good, if hardly excitable, order.

Yet over the way, it was a different story. Rarely have the two Eds been tickled as pink as they were this afternoon. To have Ed Miliband openly mocking you with no comeback … how can the man who would lead the Tories recover from that? Then came a forensic demolition from Ed Balls, followed by a savaging (a savaging) by Alistair Darling to the chimes of laughter all round. Not good. And then, at the end of the day, putting the boot in as only they know how the Tories’ willing little helpers over at BIS blasted Osborne’s tax plans as fantasyland economics. Not a great day, all told.

Still, the Autumn Statement is a welcome opportunity to dissect something seldom seen from the Tory benches – a morsel of quivering substance. The headline grabber, and what I’m going to stick to here, was the cut in stamp duty. A nakedly political move, of course, one that has to reach out to voters while punching the opposition in the guts. On turning the electorate’s heads, this can be – and is being – spun as the Tory party embracing hardworking Britain (puke) by leaving not inconsiderable sums in their pockets. The ones who really benefit from this, however, are not your archetypal young couple priced out of the market and saving to step up to the housing ladder. No, the big gainers here are buy-to-let landlords, the majority of whom handle property of modest to middling values. Since Thatcher’s council house sell off in the 80s, the constituency has been assiduously cultivated and protected by the Tories. Today’s stamp duty announcement might have perceived swing voter appeal, but it’s another tax payer handout to private rental.

On the other hand, by whacking up stamp duty for the 2% of homebuyers with cash to splash on £25m properties Osborne and his Treasury team and Lynton Crosby think they’ve stuffed the mansion tax into a sack and drowned it down the canal. The potential for Labour to gain from a bit of left populism around it has been nullified. And there we were thinking that Osborne was supposed to be some sort of political genius. On immediate appearances it does seem like a masterstroke, but it only is if it forces Labour to abandon its scheme. There is absolutely no sign the party will do so. Whatever stamp duty jiggery pokery the treasury can pull, Labour’s mansion tax will go ahead because a) it guarantees a regular monthly income to the NHS, b) it is popular with people who live in the real world, and c) those same real world people are happy to see tax dodging-London spivs and whiny celebrities getting soaked, soaked, and soaked again. Presumably Osborne has calculated that he’ll be able to score points off Labour by claiming theirs is a “homes tax” on aspiration and a declaration of class war. Except attacks lines like that have all the bite of Michael Fabricant’s toupée. Just as it’s a bad idea for the Tories to try and out-UKIP UKIP, it’s just as daft to give out-Labouring Labour a go.

But Osborne’s biggest error are the mixed messages he’s sending out. The economy is growing strongly, but things are still “precarious“. The public finances are under control, but deficit spending and public debt are growing again. We need fiscal discipline, but the government are splurging money on tax cuts and road building. From this a coherent message Osborne hopes to fashion. But he won’t. Every new spending announcement he makes undermines claims against Labour’s so-called profligacy. The unearned lead the Tories have on economics and finances are, unsurprisingly, starting to slip and with the government having very little to say about people’s actual standards of living, this is ground Labour can make up between now and election day. Careless, yes. Savvy, definitely not.

This will be Osborne’s last autumn statement, and is to be noted above all for its incoherence and wishful thinking. In that respect, as the chancellor’s stewardship of the economy draws to a close he ended as he started.

Image credit: collage by Left Futures

 

6 Comments

  1. swatantra says:

    Not just carswell, but reckless too.
    George’s Statement is irresponsible; even more cuts to come, on top of the cuts announced in March. And Labours proposals are no better, even if we knew what those proposals were, but Balls thinks he’s being clever by committing himself to nothing. Do us a favour Balls let the Public know what you are going to do, because the public are not in the mood to take Labour on trust … for anything. We are going to have to spell out exactly where every pound goes … before the GE not after it.

  2. Barry Ewart says:

    Let’s be clear under the Tories and the Lib Dem numbskulls it was never going to be the rich who were going to pay for the bankers mess but working people!. One of the first things the Tories did was to cut corporation tax for their big business friends. They then cut taxes on private landlords with multiple properties (many of themselves) to help facilitate the milking of £9b by private landlords from the housing benefit budget. Tax cuts for millionaires also meant that the richest 13,000 for example would be £105,000 a year better off so I think piddling little increases at the top end of stamp duty may only produce a few crocodile tears at the top; the gains are aimed at the better off to try to bribe them into voting Tory but again these are quite modest but unfair – average families being £1,600 a year worse off under the Tories and Lib Dems but if you buy a house for £500k you will save £4,500! But perhaps the most pernicious act was to change the local government settlement formula – instead of being calculated on size of population and NEED which is fair (under Labour) to one based on population size only which means hundreds of million pounds of cuts for Northern Council etc. but funnily enough hardly any cuts for Tory Councils in the South/South East and in fact some got extra money! And as for self-styled George against the Dragons of Multi-Nationals Tax Scroungers his piddling little tax changes would bring in a mere £3b – I have argued we should take a billion pounds each from the top 200 companies (£200b) plus have an EC Financial Transaction Tax of 5% which could bring in perhaps £50b plus we could also look at taxing land and re-introduce higher taxes on the rich and more and hey presto, “Austerity – we laugh in your face!” and all by peaceful democratic socialism! I desperately want Labour to win but they at times remind me of a very caring doctor who is desperately shy and you just wish they would empower themselves with boldness as we all suffer from another doctor – one who is very confident but very callous and uncaring, has private health interests, puts the interests of their mates first, and who was trained in voodoo economics.
    Labour also need to nail Tory/Lib Dem propaganda re the cause of the financial mess – people just need to look at the EVIDENCE from recent history – Lehman Bros, Fannie Mae, Freddie Mac et al and unfortunately for the Tories history keeps throwing up yet more evidence – JP Morgan Chase fined $13b in the US in2013 for their role in sub prime lending, City Group fined £4b in July 2014!
    As Hedge Funds have given £50m to the Tories since the election and in April the Tories/Lib Dems gave hedge funds £145m in tax cuts perhaps we should let people know if the Tories/Lib Dems/UKIP get in you will be charged to see your GP! Labour’s problem is it is not ambitious enough but perhaps as the great John Lennon sang in ‘Watching the Wheels’, “I tell them there’s no problems, only solutions.” Yours in solidarity!

  3. Syzygy says:

    There are two welfare systems but we only hear about the benefit system for the ‘skivers’.

    I was struck by the announcement that banks will only be able to claim tax relief on 50% of their (paltry) fines for wrongdoing. I thought it was a bad move on GO’s part to draw attention to the outrageousness of banks being able to set any of their fines against tax! Doubtless, he has been so focused on ensuring that the hidden handouts are maximised for the corporate-financial nexus, that he mistakenly believed that this cut in tax relief would demonstrate that ‘we’re all in this together’.

  4. Barry Ewart says:

    Syzygy
    Absolutely their is a working class/working people’s welfare state which is associated with meagre, cheap, shabby, shame and stigma and the luxurious upper middle class welfare estate for those at the top which is luxurious – they are subsidised to the hilt on practically everything with massive state intervention via tax relief etc. The New Internationalist for example estimates that the rich and powerful globally have stashed 22 trillion dollars in illicit offshore banks (to avoid giving to societies). Whilst it is austerity for us bankers bonuses are back up to £3b a year and last year 2,714 bankers earned £1m euros each!
    Big business is sat on nearly £700b which Ann Pettifor here argues they won’t invest productively probably for ideological reasons. Many on the Left argue that it is the labour of the working billions which creates the wealth and makes societies work but it is the rich who legally nick our surplus labour – so we should not be shy about policies for getting our share of the wealth back to address global inequality and poverty. One of may favourite sayings is quoted in the excellent Marmot Review and is by Pablo Neruda, “Rise up with me against the organisation of misery!”

    1. Robert says:

      What a shame that labour were more interested in those people at the top. being disabled and in a wheelchair my life has changed greatly under labour for the worse, not the better, now of course under the Tories the game just goes on and on and on.

  5. Barry Ewart says:

    True Robert, and as a working class socialist in Labour along with the rest of the Left we are trying to build a Progressive Labour. I was talking to a nurse in a practice on Thursday which is threatened with closure and she said she has learned to think just of herself, it was like scene from an Ibsen play (I was there as a patient) and I said, “Is this what they have done to us?” And something like how we all feel powerless but I don’t know if its a working classs thing butbI offered her solidarity as a trade unionist (they are worried about their jobs) plus offered a more positive ending saying I thought the Coalition would be out in May!. But Robert be hopeful, some of us are bursting with democratic socialist ideas and we can slaughter the rich and powerful with argument and as Wolgang Streekt argues in The New Left Review the rich and powerful haven’t a clue what to do about the global financial crisis and quantitative easing has only put off the crisis for a few years also Neo-Liberalism with its drive for cheap labour has painted itself into a corner – the solution to the global economic crisis is staring us in the face – get the trillions of pounds of our surplus labour nicked by the rich back and spend it on all the global oppressed! They exploit humanity we aim to liberate humanity. Take care, Keep Hope Alive!. Yours in solidarity!

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