Posts Tagged ‘Budget 2012’

Whip’s Notebook: Izzy whizzy George gets dizzy and blows £200 million

08/06/2012, 07:00:54 AM

by Jon Ashworth

Tory MPs regularly receive briefings from their parliamentary resource unit (PRU) giving them lines to take, suggested responses to letters on policy, attack lines for use in the chamber and that sort of thing. Until last week the PRU will have had standard response scripts on the stocks about the importance of the pasty tax, caravan tax, church renovation tax and charity tax. No doubt these scripts would include a line reminding their constituents that backing down on these new revenue raisers would be deeply irresponsible given the size of the deficit. Loyal Tory MPs will have emailed out these responses whenever a constituent got in touch complaining about the new tax hikes. They will have used the lines in their weekly MP’s column in the local paper and in interviews on local radio.

Behind the scenes some poor staffer in the PRU will have been relieved and grateful that the briefing was available for their Tory MPs. No doubt she or he had been getting a barrage of calls and emails from MPs’ pesky researchers asking for a line.

The poor staffer will have called the junior special adviser in the Treasury who would actually rather focus on important matters like making sure his name is on the list for the Spectator summer party. The special adviser will have no doubt grumpily despaired “why can’t they use the budget PRU briefing, don’t they realise how busy we are?!” Our heroic PRU staffer persists ”but we’re getting lots of calls, didn’t you see the finance bill debate? No one spoke up to support the policy apart from that chap desperate for promotion who founded YouGov.”

Eventually the Treasury special adviser relents and signs off an agreed brief while remaining irritated that his more important special advisor colleague Rupert Harrison gets the Spectator summer party invite not him.

But at least the tenacious staffer is happy and finally emails the pasty tax brief out to a grateful parliamentary party and now turns attention to the “Hunt hasn’t really broken the ministerial Code” brief that the Number 10 Political Office are demanding goes out.

But an updated PRU brief wasn’t enough to satisfy MPs or more importantly public opinion.

The Government’s majority had already been reduced to just 25 on the votes on the pasty and caravan tax. They should be winning votes in the Commons by 83. Overall 31 Tory MPs – around 10 per cent of the Conservative Parliamentary Party – voted against one or more of George Osborne’s budget measures.

And if Osborne thought winning the votes was enough to put this issue to bed, he was wrong.

Lib Dem MPs were handing out pasties in Parliament, 4 Tory MPs brought petitions to the Commons on the caravan tax even though they voted for it, Labour’s frontbench Treasury team were constantly up and at them. MPs were calling adjournment debates forcing ministers back to the Commons to defend the policy. Just two weeks ago poor David Gauke, Exchequer Secretary was sent out to defend the pasty tax in a Westminster hall debate and confirmed that samosas cooked and sold in sweet shops, many of which we have in Leicester, will have VAT as well.

And then in the week that Tony Blair, Vince Cable and Jeremy Hunt were all at Leveson we witnessed what appeared like a dizzying u-turn a day from Osborne. In total he makes £200 million of u-turns with no explanation of how these latest unfunded commitments will be paid for. That’s a lot of cash for Osborne to spend to try to save his draining credibility.


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Back in the real world, it’s still the budget, stupid

02/04/2012, 03:17:59 PM

by Ian Lucas

As the dust settles on a tumultuous couple of weeks it is becoming clear that outside the Westminster bubble, only one event has truly cut through to the general public: the budget.

With the cut in the 50p rate of tax and the imposition of the “granny tax”, this was truly a Budget for “the premier league” – those top rate taxpayers who had the ear of the prime minister and have benefited directly as a consequence of George Osborne’s announcements.

What is clear is that securing economic growth and new jobs  was not a key topic of conversation at the Downing Street dinners. Before the Budget, and after it, the failure of this Government is its failure to build growth.

A cut to capital projects has taken away key Government support for private sector job creation. Whole industrial sectors – such as construction – are suffering as a result, and both large-scale firms and their smaller subcontractors are holding back.

The uncertainty in the jobs market is reducing employee confidence. People are postponing major spending decisions. If you are worrying about your job, you won’t move house. Income for the local economy, agents’ fees, finance to builders is held back.

Worries about jobs are hold back spending; yet the Government has increased taxes on consumers. Every penny more on VAT for central Government is a penny less for local business.

It is necessary to reduce the deficit. But the most damning statistic for the Government is that it is borrowing £147 billion more than predicted – because the economy is not growing and more people are out of work.


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George Osborne’s ugly society

25/03/2012, 08:30:04 AM

by Helen Godwin Tiege

The news is full of the budget, and it seems George Osborne is getting himself into a pickle after breaking the “don’t mess the with pensioners” rule. Even the Daily Mail has turned on the Tories, along with almost every other newspaper.

We have also heard how great this budget is for business, with the scrapping of the 50p tax rate and further reduction in corporation tax. The CEO of Glaxo, Sir Andrew Whitty, was quite happy for the chancellor to claim their announcement today, that they will create over 1000 new roles, was a result of new measures announced in the budget, as well as the Labour-led changes to patenting laws.

We heard from several “business-leaders” who felt that the scrapping of the 50p rate would mean that Britain was once again “open for business”. And this is all great news, only a twisted cynic would want to see the economy fail or go into stagnation after what has been a troubling and difficult 4 years. If these measure really will bring investment and job creation to Britain then I would not want to oppose them.

However, I cannot see how such changes which ultimately benefit individuals can be introduced at a time when there is still rising unemployment, a very real threat of a “lost generation” and millions of people around the country about to face their darkest times as a result of local authority cuts that come into effect from April.


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The real impact of the budget on the public

22/03/2012, 07:00:14 AM

by Peter Watt

The thing about big political events is that they generally aren’t big events in the same way that, say big sporting events or a royal wedding are.  The latter are things that most people are aware of and that get people talking.  Big political events generally do neither.  But they certainly feel like really big events if you are a political junkie or you are working inside the political world.

I can remember when Labour Party HQ used to buy all of the staff ice-creams on budget day; it was a bit of a tradition.  In the weeks building up to the day itself there would be mounting excitement.  Briefings were prepared and printers were primed to start printing materials within minutes of the end of the budget so that local campaigners were ready for their weekends work. Because the point was that budgets were big, game-changing, or game re-enforcing events.

Except looking back, they generally weren’t, and very little actually changed.  The polls might blip but they soon blipped back to where they were before.

And I was reminded of this yesterday; because I, along with every other political obsessive, had enjoyed this last week.  The NHS Bill skirmishes and the budget briefing.  Both had left us all with plenty to read, discuss and tweet about.


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After this budget, the Lib Dems are all over the place

21/03/2012, 02:49:31 PM

by Amanda Ramsay

The focus today has been on George Osborne. Understandably so. But one of the stories in the days to come will be how this budget has exacerbated the cracks that were already spreading through the Liberal Democrats and the instability this will bring to the government.

Like them or loathe them, the Conservatives have made their position known. As NEC candidate Peter Wheeler puts it: “Tories make it clear what their priorities are – Tax cuts for the rich and pay cuts for the north.”

But they are burdened by a partner who lacks their self-assurance and discipline.

Long-suffering Tories, already struggling with David Cameron’s leadership, are tiring of having to put-up with on-the-hoof Liberal Democrat solo policy announcements such as Vince Cable’s off-piste mooting of a mansion tax that was never going to happen.

This may have been political point scoring on Cable’s part, but even whispers of such a tax will have wrought terror in Tory heartlands, particularly in London where such talk could cost Boris Johnson’s political life.

It’s part of a pattern of ill-disciplined behaviour that has increasingly dismayed Tory MPs. For example, there was the failure to support their own leadership line from Nick Clegg over the health bill, not to mention February’s leaked letter from Vince Cable, when the business secretary told the prime minister and the deputy prime minister that the government lacks a “compelling vision” for Britain.

For restive Tory backbenchers and political advisers, all of this will have steeled Tory determination to make this their budget.


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Budget preview: The polling that explains why George Osborne is cutting the 50p rate of tax

21/03/2012, 08:10:41 AM

by Atul Hatwal

When George Osborne steps up to the despatch box later he will publicly launch his campaign to be leader of the Conservative party.

David Cameron can breathe easy though. It will not be a throwback to the TB-GBs. Osborne’s real target will likely be shuffling about his city hall office, watching the TV coverage, thinking that he could do it all so much better.

Until now, Boris Johnson has been the darling of the Tory faithful. He shone at last year’s party conference, has repeatedly tweaked the prime minister’s nose on issues like cuts to policing and has been the king over the water to true blue believers who see too much yellow in the government.

In contrast, his rival to succeed David Cameron, has been conducting his campaign in stealth mode. But away from the bright lights of media scrutiny, in the corridors of Westminster, George Osborne has been very active.

If any evidence were needed, just speak to any first term Tory MP: Osborne has been almost indecent in courting the new intake into the parliamentary party.

The chancellor has deployed the full range blandishments: from hand written notes in the pigeon hole to invitations to select dinners, each and every member of the class of 2010 has had unbelievable amounts of personal attention lavished on them.

Team Osborne is confident that two years into government, they have the parliamentary vote locked up. For all of Boris’s grandstanding and media profile, few in the parliamentary party view him as a serious alternative to either David Cameron or George Osborne.

Recently, at a private dinner, one member of the 2010-ers went so far as to suggest that Osborne might even defeat Cameron in a vote amongst his contemporaries.

But that still leaves the blue rinse legions swooning for their blonde mop-topped heir apparent.


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Budget preview: abolishing national public sector pay rates is right

20/03/2012, 12:00:32 PM

by Rob Marchant

As part of the Budget run-up, on Friday Britain’s labour movement was convulsed at the thought of the latest Osborne proposal: that national public sector pay rates might be scrapped.

But, before we join the voices of the major trade unions and the TUC who are, understandably, trying to look out for their own interest group, as a party whose interests are not always identical to those of our union colleagues, it might behove us to take a few minutes to take a step back.

Now, while no-one would suggest we should be adopting the Tory Budget wholesale, smart opposition is about determining which bits to oppose. A regional bargaining system would likely increase some pay-rates, as well as decreasing (or failing to increase) others.

And it is surely difficult to argue that the current, entirely inflexible system of fixed national pay rates, which was put in place decades ago in a corporatist state era, is fit for purpose.

First, as the Treasury points out, there are absurd variations depending on where you live. In some places pay rates can be artificially up to 18% higher than their private sector equivalents. And furthermore, applying the only current regional exception to the national system, the addition of London weighting, the system even then visibly fails to attract, for example, enough teachers to schools in inner London because many cannot afford to live there. So some people are still not paid enough. Result: poor levels of public service.

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Budget preview: Osborne plays politics with Britain’s economy

20/03/2012, 07:00:25 AM

by Jonathan Todd

Literally no one alive today has experienced a period as economically bleak as we face today.

There could be hope. The chancellor retains a capacity to improve our situation through bold policy and a display of leadership. Instead we can expect a Budget of ruses, a rearranging of the pieces on the political chessboard with little or no thought for the wider reality in which the rest of us reside.

Osborne’s capacity to frame political debate should not be underestimated. He has the bully pulpit of office, a sympathetic media, and the public have bought into his central narrative: there is no alternative to his tough deficit-reduction medicine and anyone who suggests otherwise, particularly on behalf of Labour, who he paints as wholly culpable for our economic predicament, represents an unaffordable risk.

It is a powerful argument, a train rumbling down the track straight for Labour, threatening to smash us into another parliament in opposition. Some think the train will change direction, almost irrespective of what Labour does. They hope and believe that exasperation with Osborne will build such that his prescription is rejected.

Some contend that the train is immutable and that Labour had better adjust – deficit reduction will remain the key issue and Labour must do more to demonstrate how we would deliver this.


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Budget preview: an opportunity to change the nature of Labour’s political attack?

18/03/2012, 08:00:52 AM

by Anthony Painter

If the leaks turn out to be true, we are facing one the most radical Budgets in living memory. The abolition or reduction of the 50p rate, regionalisation of public sector pay, increasing the personal allowance, and the introduction of “tycoon tax” (ie: minimum tax rate for all) is a major package of reform. As soon as George Osborne stands up, the framing battle will commence. What should Labour’s line be?

I’ll put my personal allowance tax saving on the fact that the line will be “fairness”. Ed Miliband and Ed Balls will focus on the abolition or reduction of the 50p tax rate. They will say this proves we are not all in it together; one rule for the rich and one rule for the rest of us. They will follow with a flurry of numbers about how the average family has been hit by the Tory-led government’s tax and spending changes since 2010. Labour would tax banks, protect tax credits and reduce VAT. The Tories favour the rich over the rest.

When George Osborne announced the VAT increase, the reaction was pretty much the same. The party HQ printing presses went into overdrive even while the leadership election was on and off Labour went. People didn’t want VAT to increase and they don’t want the 50p tax rate abolished. So it’s a no-brainer, right?

The problem is that it didn’t work.

Labour cries “unfair” at every possible opportunity. People know that Labour thinks everything the government has done is “unfair”. A good portion of the population think it is unfair too. One problem is that they take “fairness” to mean a slightly different thing to Labour. They take it mean reciprocal fairness: you should receive in accordance with your contribution. Labour means distributional fairness: the poorer you are, the more you should get. That is why Labour’s cris de coeur about fairness slightly miss the mark.

There is another approach: attack the government’s fiscal and economic decisions. The package of measures which is rumoured undermines fiscal consolidation and economic growth.


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