Coffee House

George Osborne readies his tax dividing line

16 March 2014

11:08 AM

16 March 2014

11:08 AM

George Osborne was on Andrew Marr this morning announcing support for a new garden city at Ebbsfleet in Kent and the extension of Help to Buy on new build homes until 2020. The Tories hope that these policies will show both that they are planning for the long term and that they are supporting aspiration.

But what struck me as most significant was Osborne’s response when told by Marr that he was sounding more like a Liberal Democrat than a Conservative. He instantly replied, ‘Conservatives believe in lower taxes, Liberal Democrats want to put taxes up.’ We already know that Osborne believes that the rest of the deficit can be cleared without any more tax increases and this reply suggests that the Tories will run in 2015 as the only party that won’t put up taxes.


Strikingly, Osborne also talked about putting up the tax free allowance in a rather different way than he does normally. He was keen to emphasise how this policy helps people on £50,000 as well as those on low incomes. It remains to be seen if this will be enough to satisfy those Tories who are pushing for something to be done about just how many people are being dragged into the 40p tax band, another 1.4 million people just since this government came to power.

This week’s Budget will not be a classic pre-election Budget. Osborne still wants to emphasise the ‘difficult decisions’ ahead to show that the job is not yet done. But it will lay the groundwork for the election campaign to come. Osborne will be keen to make Labour vote both on a new set of fiscal rules and on the proposed welfare care. If they oppose either, he’ll attack them for not having learnt from their mistakes.

On the evening of Wednesday 19 March 2014, Fraser Nelson, James Forsyth and Andrew Neil will be discussing what George Osborne’s 2014 budget means. Click here to book tickets.

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Show comments
  • rtj1211

    A new garden city in Ebbsfleet is a bit of a no-brainer. A means to increase use of HS1 javelin services into Stratford and St Pancras, with obvious benefits for employment hubs in those two locations. Absolutely obvious basic principle of linking transport infrastructure to housebuilding.

  • Smithersjones2013

    You can tell Osborne is a Northern Tory. All he can think of is concreting over our green and pleasant south!

    Lets be real though this is not a Garden City but London Overspill to relieve some of the pressure caused by the governments dereliction of duty in not controlling immigration!

    As ever the government fails to do its job and the British people suffer!

    • rtj1211

      I’m sure you’ll find he’s wildly in favour of the new Manchester Airport hub development with Chinese investment. He’s in favour of HS2-associated developments in Crewe and around Birmingham too.

      But all you southerners don’t want that do you, because a train line might help to link the North to Europe directly, rather than keeping them down in their rightful place as inferior wastrels to the hard working people of the South East.

  • Colonel Mustard

    Channel 5 bias. New reported Osborne and Balls head to head over the budget. Reported what Osborne said. Then reported what Balls said. Then showed Balls saying it for emphasis. Labour vs Tories coverage 2:1

    This is typical of the way all news broadcasts seem to report politics.

    • telemachus

      Reflects the charisma and newsworthy attributes of the subjects

  • albertcooper

    If you only receive a maximum of say £13.0000 it should be tax free,but if earning say £30,000 plus then yes tax is needed.The government state none will pay tax on the first £10.000 but this seems grossly unfair if you only receive as I do a modest increase on this amount in my pension

    • manonthebus

      I’m afraid, your comment is irrelevant. Too many people pay 40% tax on the top slice of their income (work or pensions) because the LibDems wanted to gain votes from the lower paid and the Treasury insisted that the increases in personal allowances should be fiscally neutral. This has hit a lot of middle earners quite significantly. It also means that in a Welfare State, many more people now pay absolutely nothing towards the public services they consume. This is bad. It has led to a situation where many voters may demand increases in taxes because they know it affect others and not themselves. It means also that for many people, the money for the Welfare State and the NHS grows on somebody else’s trees.

      • rtj1211

        Look, people who pay no income tax still pay VAT on purchases. So to say that people who pay no income tax pay no tax is ridiculous.

        Also, if every time the poor get a tax break their landlord puts their rent up, what’s actually happening is subsidies for the landlords, not for the poor.

        I’m sure those landlords are quite well-to-do, you know.

  • anyfool

    Wages have been declining since 2004, they actually declined more in real terms under Labour than the Coalition.
    People on benefits have seen their income rise, they are not really poor, they are just lazy and cannot be bothered to make the decisions needed to run their lives.
    So in the real world you would give the tax breaks to the workers who have lost most.

    • telemachus

      Of course they declined more from 2004-2010 than 2010-2014
      This is because of the marked fall in 2008-2009 caused by the US subprime induced crash
      Brown engineered recovery from this and laid the foundations of the current rise in wages
      Credit where credit is due please

  • Hexhamgeezer

    New deckchairs for the Welfare Titanic. Whoopee!

  • andagain

    George Osborne was on Andrew Marr this morning announcing support for a new garden city at Ebbsfleet in Kent

    At last. An actual location! Maybe it will actually be built, in the distant future. Still, better than nothing.

  • BarkingAtTreehuggers

    Excuse me? £50k is a low income. How are you expected to subsist on such a ridiculously low income in and around London? You would be going nowhere with that kind of money.

    • rtj1211

      Depends on your age and circumstances. Not bad for a 28 yr old with no kids, is it??

  • Greg

    Income is not the problem in the budget. Spending is. The welfare state needs to be reduced.

    • HookesLaw

      I am not so sure about the first point. It seems to me the economy should be generating more revenue. That still means we need to control spending.

    • BarkingAtTreehuggers

      Ahh, the welfare of running t w o states – the civil service led-state taking no decisions ever supported by the private sector-run Quangocracy legitimising the former.

  • JoeDM

    40% has become the standard rate for the hard working middle-class backbone of the nation.

    • ohforheavensake

      At the moment 81.6% of taxpayers pay the lower rate alone. So this isn’t actually true, is it?

      • manonthebus

        And what percentage of the the working population pay any taxes at all?

    • Ron Todd

      A lot of those that do pay 40% of tax on some of their income will only pay 40% on a small part of their income.

    • telemachus

      And after Wednesday for the super rich too