The chances of George Osborne delivering an interesting, inspiring Budget full of BHAG’s on Wednesday are about the same as BBC’s Rugby Commentator, Eddie Butler, ever delivering an unbiased commentary when England or Wales are playing. That’s about the same chance as last Saturday’s referee in Cardiff, Steve Walsh, not dishing the English pack in the scrum; ie zilch, nil, nowt!
But that is what is called for; a “steady as she goes”, boring, stable Budget.
There are no quick fixes. There is no silver bullet.
Mr Osborne is obviously getting advice from all quarters. Let us just analyse a few of the “helpful hints” he’s publicly received:-
1) From every Labour front bench member: “Of course there should be cuts. …..but not this one”. So which one then? Get real, Ladies and Gentlemen! People will take you more seriously if you provide details of just what you would do to stop the Nation living beyond its means.
2) Let’s raise an annual tax charge on houses worth over two million quid, says Vince Cable (a man who buys his cars from Japan and his trains from Dusseldorf but thinks that every home in the UK worth over £2m is a Mansion): So who pays for the huge property revaluation across the Country that would have to take place? Would Scotland be exempt, Vince? What about those cash poor (probably older) people who live in modest houses in South-East England? “Let them pay it when they, or their executors, finally sell”. But this is about raising cash now Dr Cable, not ideologically redistributing wealth. ….or is it? Ah! Therein lies the rub.
3. Cut vat: it may stimulate the retail sector a tad but a price reduction of 25p in ten quid is surely not game-changing, although it may do a bit to stimulate the flagging Chinese manufacturing sector!
Now let us examine three ideas put publicly to the Chancellor (some by, to be fair, the Opposition as well as others) that have some merit:
1. Abolish National Insurance contributions for small businesses. The creation of jobs in the private sector is key and we currently have a jobs tax; a charge, not on profits, but on employing someone! How crass is that!
2. Delay the proposed reduction of the top rate in income tax from 50% to 45%. Not only would that be good politics (and shoot Labour’s fox at a stroke) but in hypothecated form it would kill a couple of myths and do some good. Identify how much that 5% would raise Chanceller; allocate it specifically to taking under-25’s in their first job out of tax altogether; the specific figures would give up some truths rather than ideologically-fuelled myths. A delay in this cut’s introduction only but a few birds would be killed with one stone.
3. Bring forward capex on infrastructure; now you’re talking! Houses, airports, ports, roads, railways, power stations. ….. Show some political will George, attack the bureaucracy, accelerate the spending, bring in overseas Sovereign Wealth Funds to help pay for it. But ….above all. …Do it!
So there we are my friends. Not a lot of BHAGs in that little lot. But George mustn’t frighten the horses in the markets; he must stick to The Plan; he shouldn’t take lessons from a Shadow Chancellor who was part of the team that helped get us into this mess in the first place.
Steady as she goes please Chancellor. You’re not there to be popular; don’t worry about the 2015 General Election; no give-aways will make you more popular; run the economy to get us out of the mess, not to keep high in the Opinion Polls.
Oh. ….. Just three last thoughts George:-
1. If you’re still adamant on giving away 0.7% of our GDP in Overseas Aid (when you’re closing libraries at home for a UK that has a 20% adult literacy rate!) even when our rival nations are delaying their efforts to reach that target, at least make it a win-win and tie it to getting work for UK Business! That’s what others do; wake up and smell the coffee George! Last year you provided £48m to China (with the 2nd highest GDP in the World!) to. …..er….grow trees!
2. Raise the retirement age NOW to 70 (on a graduated, tiered basis. Feed it in over ten years). There never was enough money to pay pensions from 65 Chancellor; it’s just that not many lived long enough to find out! A State Retirement Age set before the 2nd World War surely needs serious amendment (not tinkering) in the second decade of the 21st Century?
3 BHAG’s?? Big Hairy-A***d Goals. They probably didn’t teach you that one at School!