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Thursday, 22 March 2012

Osborne Bashes the Old and Threatens the Future

George Osborne, the British Finance Minister, yesterday performed the annual ritual of presenting a plan of spending and taxation [known as the Budget] and the Labour opposition joined in the ritual by quibbling about the data that were presented. None of the lead speakers in the discussion has ever held a job in the 'real economy' for a significant number of years, and all the performers read statements that were prepared by teams of script writers and Economists.

The hallmark of the Budget was the expressed intention that all the concessions that were made to taxpayers were compensated by equivalent increases in other taxes. An increase in state retirement pensions was offset by a reduction in tax reliefs for millions of pensioners. The Liberal Democrats' cherished policy of increasing the level of income that is exempt from income tax was offset by cuts in benefits and tax credits, and by raised taxes on fuel, cigarettes and alcohol: they were shown even more than previously to be totemistic twerps as they boasted of their 'great achievement'. The star of the day, Osborne, again showed the depth of his nervousness by  exaggerating his swagger and by the reedy edge that worsens his always-sneery voice: the more cock-sure he looked, the more his voice betrayed the fact that he was well beyond his comfort zone. His minders had clearly not recognised that critics and opponents would set together proposed tax reliefs for the rich and  increased taxes, diminished benefits and reduced tax reliefs for the relatively poor. The elaborate game of balancing gains and losses for each income decile that so pleases the inner circle means nothing to the electorate at large.

Osborne presented a 'tidying' of taxation that turned out [only after examining the supporting documents that were published the same day] to be the biggest tax grab in the Budget: his misjudgement in trying to introduce the new grab from pensioners as a mere administrative detail will haunt him. Alongside his support for the ruinous Health and Social Care Act and the leading role he has taken in the government's campaign to undermine the protection of the cherished countryside he has probably done enough to bring down the government at the next election. The sooner the coalition government collapses, the fresher will be the public memory of Osborne's duplicity and silliness and the more certain will be the public repudiation of both coalition parties. Labour are a shambles, and they will fail spectacularly as a government: but they are 'not this lot' and that is all that is needed to return them to power.

The British newspapers today bash the 'granny tax' but recognise that much more important news is happening outside little Britain in their features on the siege in Toulouse [France] where a confessed killer is holed-up in a flat after exacerbating racial tensions and affecting the volatile mood of Israelis. Analysts of Britain will recognise that the Budget does nothing to accelerate the reduction of the endemic deficit on state spending and nothing that will significantly foster economic growth. For the last two years Osborne's 'austerity' programme has encouraged international investors to continue supporting British government debt: yesterday's Budget brought forward the date when analysts will stress the precariousness of the government  and the probability that an early election will open the gates to chaos. This tragic inevitability is made one significant step more certain by Osborne's performance yesterday.

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