The morning after the election, Ed Miliband said that his party had lost the election but won the argument. He was mocked for this observation but surveying Osborne’s summer budget, he may have a point. It was cleverly spun: the tax-cut for Middle England trumpeted this morning has turned out to be a run-of-the-mill 1.2pc revision to the 40p threshold, not even in line with earnings. Clever old George.
In fact, the first all-Conservative Budget for a generation has seen the Chancellor accept many of Labour’s arguments, moving to the left with a tax-and-spend budget and putting his tanks on the centre ground, facing leftwards. The following ideas ought to be cheered by any Labour supporter with a smidgeon of intellectual honesty:-
- Massive minimum wage hike: Miliband said £8/hr by 2020, Osborne now says £9/hr. This won’t cost him a bean; indeed, he reckons he’ll save about £800m by paying the low-waged less in tax credits. The right tends not to like this because it destroys jobs – about 60,000 of them in this case, according to the OBR. But because this idea has come from a Tory, you can expect most Tories to cheer.
- Higher taxes! Some £47bn of them over this parliament. Yes, the Chancellor said he wanted a “lower tax Britain” but his Budget has made it what Miliband wanted: a higher tax Britain. Increases in savings tax, insurance premium tax and vehicle excise duty. Cuts in pensions tax relief, corporation tax payments demanded earlier. And a whole raft of Gordon Brown-style anti-avoidance measures. For every £1 of tax cuts, there were £2 of tax rises.
- More spending! Osborne is planning £83.3bn more departmental spending by the end of the parliament than he indicted in his March budget. Miliband spent much of the campaign telling Osborne that he needn’t cut so deeply. It seems that the Chancellor agrees:-
4. Whack the non-doms! He won’t quite abolish them, as Ed Miliband was planning to, but he increase the tax they pay on their worldwide income, and insist they pay inheritance tax on UK property.
5. Whack hedge funds and private equity firms! They’ll be hit for £375m for capital gains tax and other little stings. And there’s a new bank supertax of 8pc.
6. Apprentice Levy: Labour demanded that every company trained an apprentice for every foreigner hired. Osborne has gone further, imposing a special tax on businesses, to fund 3m apprenticeships. As per Alison Wolf’s recent report.
Imagine the reaction in the Tory (and Labour) press if Chancellor Ed Balls had announced all that.