Skip to main content

Osborne sows the political wind

They sow the wind
    and reap the whirlwind.
The stalk has no head;
    it will produce no flour.
Were it to yield grain,
    foreigners would swallow it up.


Hosea 8-6

The first Conservative budget in 19 years is an act of of political hypocrisy so astonishingly blatant that it is hard to know whether to cringe at the opportunism or applaud the cynicism.

George Osborne has the reputation as a masterful political tactician. Certainly he has been a astute observer of the political weather and occasionally he has been something of a rainmaker himself. His first Conservative budget is certainly far stronger from a political point of view that it is from an economic one. Take the Minimum Wage, which for the purposes of politics he re-branded as the "living wage". He portrayed the large increase as a "pay rise for Britain", yet the quid pro quo has been such a sharp reduction of in-work benefits that even such a "pay increase" will leave the working poor worse off. Now don't get me wrong here: I have been and remain a sharp critic of the tax credit system which is complicated, unfair and incredibly expensive to administer. Osborne has given notice that in time he intends to scrap this subsidy to employers who will not pay fair wages. However this budget makes the system even more unfair, even more complicated and even more expensive. 

You might have thought that it would be impossible for the UK to have a more complicated and expensive tax system- it has the longest tax code in the world: over 16,000 pages long. Osborne has managed to increase the complications of the system, and with it the regulatory burden and the cost of compliance. At a time when the tax code is already an intolerable burden on small businesses, Osborne has made it worse. Neither is this pernicious over regulation confined simply to one area- the welcome reduction of subsidies to the buy-to-let sector is also simply part of an "interim solution", which again makes the tax position even more complicated.  From a political point of view it allows the Tories to keep their options open- to attack the foreigners who "buy to leave" in London, benefiting from the complicity of HM Treasury in the distortion of the UK housing market, or to gain further donations from those who have made the second home market their pension pot. Politically astute it maybe, but from an economic point of view it is horseshit.

This budget is emblematic of the whole of Cameron's Conservative approach- play the political ball rather than establish a connected strategy. This is certainly true of David Cameron's European policy. It seems self evident that the PM does not intend to be the man who takes the UK out of the EU, and thus, within the current European context he will need to accept the limitations set out by the other 27 member states: namely no major treaty changes. This of course is hardly the red meat that the anti-EU rump amongst the Conservatives are looking for. Nevertheless Cameron is nothing if not a lucky politician, and as the Labour party enters a long period of convulsive introspection and as the Liberal Democrats ponder the agony of effort to recover from the 2010 defeat, the PM may yet have sufficient political capital to cut the EU Gordian knot. As the political wind turns against UKIP it looks as though Cameron's political folly of the referendum may yet be a high wire act that he can pull off.

Nevertheless, Osborne can not pull off the Pollyanna optimism of the current incumbent of Number 10- he is more the Mandelson or the Iago of the Conservative party.  This political budget was Osborne's statement of intent: settling scores- including with his chief rival, Boris Johnson- rather than setting out a coherent long term agenda. Thus even as Osborne basks in admiration from his own side at the political slight of hand that has left Labour in chaos, the fact is that he is setting the seeds for his own destruction. When Cameron steps down, presumably after the success of an EU referendum, then Osborne will be facing quite a different political environment. As the clouds gather over Scotland, and the mess of the UK tax code becomes a crisis, I suspect he will look back on July 2015 with a sense of "never glad, confident morning again". 

Comments

Popular posts from this blog

Cicero ReDux

By Special Request of Baroness Scott and Mark Valladares... Cicero's Songs returns: bigger, longer and uncut.
October 1st marked the half way point of the Estonian Presidency of the European Union.  Perhaps for many people such an anniversary is of passing interest at best.  Yet the conduct of the Estonian Presidency is reinforcing just how forward looking and innovative the most northerly of the Baltic States has become.
Estonia is a country that wants to live in the future, and with its openness and innovation, that future seems a lot closer than almost anywhere else in Europe
It is not that Estonia does not “do” the past: the picturesque cobbled streets of old Tallinn have tourist crowds a-plenty enjoying the mediaeval architecture in an Indian summer of sunshine and blue skies.  The real point is that Estonia refuses to be a prisoner of its past. Lennart Meri, Estonia’s President in the 1990s- who spent years of his childhood in Siberia- once told me that the country had to conc…

Trump and Brexit are the Pearl Harbor and the Fall of Singapore in Russia's Hybrid war against the West.

In December 1941, Imperial Japan launched a surprise attack on the United States at Pearl Harbor. After the subsequent declaration of war, within three days, the Japanese had sunk the British warships, HMS Prince of Wales and HMS Repulse, and the rapid Japanese attack led to the surrender of Hong Kong on Christmas Day 1941 and the fall of Singapore only two months after Pearl Harbor. These were the opening blows in the long war of the Pacific that cost over 30,000,000 lives and was only ended with the detonations above Hiroshima and Nagasaki.

"History doesn't often repeat itself, but it rhymes" is an aphorism attributed to Mark Twain, and in a way it seems quite appropriate when we survey the current scene. 

In 1941, Imperial Japan, knowing its own weakness, chose a non-conventional form of war, the surprise attack. Since the end of his first Presidential term, Vladimir Putin, knowing Russia's weakness, has also chosen non-conventional ways to promote his domestic powe…

The American National nightmare becomes a global nightmare

It is a basic contention of this blog that Donald J Trump is not fit for office.

A crooked real estate developer with a dubious past and highly questionable finances. he has systematically lied his way into financial or other advantage. His personal qualities include vulgarity, sexual assault allegations and fraudulent statements on almost every subject. 

He lost the popular vote by nearly three million votes.

He has, of course, been under criminal investigation practically since before he took the oath of office. The indictment of some of closest advisers is just the beginning. His track record suggests that in due course there is no action he will not take, whether illegal or unconstitutional in order to derail his own inevitable impeachment and the indictments that must surely follow the successful investigation of Robert Mueller into his connections with Russia.

However, all of that is a matter for the American people. 

It is also a matter for the American people that Trump is cheating…