Uk politics

Thursday

The Spectator

Transcript: Osborne defends his Budget

Here’s the full transcript of this morning’s Today programme interview with George Osborne: Evan Davis: If you believe in using the tax system to cut the incomes of those at the top and in using the welfare system to hand money to the poor, then yesterday’s budget was probably not for you. The Chancellor  hinted at big further cuts to welfare and he clearly thinks the tax system has gone too far in trying to harvest cash from those at the top. Yes, he’s ironing out some loopholes but for him 50p rates don’t work. Believe him, and the game’s over for those who want government to iron out the

Lloyd Evans Lloyd Evans

Why Osborne saved Wallace and Gromit

‘It is the determined policy of this government to keep Wallace and Gromit exactly where they are.’ So proclaimed George Osborne in his Budget speech yesterday, as he announced new tax credits for the video games, animation and televesion industries. But what prompted this? Had he been reading The Spectator? In an interview for the magazine a couple of months ago, Miles Bullough — head of broadcast at Aardman Animations, the studio that produces Wallace and Gromit — told Lloyd Evans of the competition that the British animation industry faces from other countries where the governments do offer subsidies, and the need for something similar here. Here’s the full interview:

James Forsyth James Forsyth

Osborne hopes business will see past the bad headlines

Today’s front pages concentrate on the so-called ‘granny tax’, the surprise of the Budget. But the real test of this Budget is going to be whether it delivers growth. If it does, then it will make a Tory majority in 2015 more likely. If it doesn’t, then the decision to cut the 50p rate will become even more politically problematic.   Given that the Budget is fiscally neutral, this growth is going to have come from either the couple of supply side measures in the Budget or by finding a way to unleash those elusive animal spirits. Indeed, I think this desire to boost confidence is one of the main

The Spectator

The Spectator’s Budget briefing

What was really in George Osborne’s Budget? Last night we held an event, in association with Aberdeen Asset Management, to discuss just that. Click here for a free pdf copy of the briefing paper produced for the event.

Wednesday

James Forsyth

Tory MPs welcome the Budget

George Osborne and David Cameron have just addressed the 1922 Committee of Tory backbenchers. They received the traditional desk banging reception and Tory MPs seemed in good spirits as they left the meeting. Interestingly, they were nearly all relaxed about the increase in the personal allowance, believing that they would get the credit just as much — if not more than — the Liberal Democrats. One told me that ‘the public view this as a Conservative government when things are going well and a coalition one when things are going badly’. Perhaps the biggest piece of news out of the meeting is that Osborne offered Tory MPs considerable encouragement that

James Forsyth James Forsyth

Balls goes on the attack against 45p

Ed Balls committed Labour to voting against the reduction in the 50p rate at his post-Budget briefing. But he wouldn’t say whether or not Labour would pledge to restore it in their manifesto; sticking to the classic opposition line that all decisions on tax will be made in the manifesto and not before. Balls, though, was on typically pugilistic form; few politicians relish a scrap as much as he does. The Labour leadership clearly view the abolition of the 50p rate as a major political opening for them. Balls went out of his way to attack the HMRC report that Osborne used to justify the move. He mockingly declared that

James Forsyth James Forsyth

All that matters now is growth

With every Budget, the early Cameron emphasis on greenery and General Well Being not Gross Domestic Product seems a more distant memory. Today’s Budget showed that, to Osborne at least, growth now trumps these more abstract concerns.   So, we saw an announcement that the planning rules would come into force pretty much as planned from next Tuesday. This means that Osborne has simply overridden all the bureaucratic and legal objections from DCLG. Although, I understand that councils who already have a sufficiently pro-development local plan will have a year to adjust to the new rules.   Sunday trading rules, a classic bit of General Well Being paternalism, are also

Lloyd Evans Lloyd Evans

A quiet PMQs, ahead of today’s main event

It started like a bit of good old political knockabout. PMQs opened with a planted question from Mark Menzies (Con, Fylde) asking the PM about Britain’s sick-note culture. Cameron, looking suitably grave, declared that the fake-sniffle problem afflicts even senior management. Ed Miliband, he told us, had recently claimed he was too ill to attend a rally called by health workers. Three hours later he was seen heartily cheering at a football match having been driven to the ground in a Rolls Royce. ‘What was it,’ asked Cameron, ‘that first attracted the Labour leader to the multimillionaire owner of Hull football club?’ This prompted howls and jeers from every part

James Forsyth James Forsyth

The Lib Dems are happy with what they got

This Budget told us something interesting about the coalition: that there’s more juice left in it than some of us thought. Judging by recent coalition tensions, one might have expected the two parties to devote their time to blocking each other’s proposals. But, instead, they’ve struck a deal that suits both of their political priorities: the Liberal Democrats have got a sizeable increase in the personal allowance, the Tories a 2p cut in corporation tax and a reduction in the economically destructive 50p rate. Interestingly, close allies of the Deputy Prime Minister are now briefing that ‘differentiation’, pointing out where the Lib Dems disagree with the Tories, will be dialled

Peter Hoskin

Behind Osborne’s 50p tax change

How significant was this Budget? On an economic level, not very. There’s no discernible impact on growth: all of the main forecasts have more or less stayed the same since the Autumn Statement. Borrowing is the tiniest bit lower, mainly thanks to a £23 billion accountancy trick with Royal Mail pensions. And even many of the policies announced today will barely rouse the Exchequer’s attention. That cut in the top rate of income tax to 45p? It will mean only £100 million a year less in direct revenues. That stamp duty increase for properties worth over £2 million? It will net only £300 million a year. The overall effect is

Jonathan Jones

The Budget: What you need to know

1. Growth. The OBR’s forecasts are essentially unchanged from the Autumn Statement, but nevertheless represent a much bleaker outlook than we were given a year ago:  2. Debt. Despite Osborne’s talk of ‘paying down the debt’, he’s actually adding to it — by 59 per cent over this parliament. He is, though, on course to meet his second fiscal rule to see the debt to GDP ratio falling by 2015-16: 3. Deficit. Ignoring the effects of transfering the Royal Mail pension deficit, there’s hardly any change to the borrowing forecasts since November. Progress on deficit reduction will be much slower than announced in Osborne’s first two Budgets: 4. Unemployment. The

James Forsyth James Forsyth

A Budget by and for the coalition

The coalition has found the second year of co-habitation more difficult than the first and it will find the coming year even more difficult given that House of Lords reform is on the agenda. But today’s Budget is a reminder of the political benefits of coalition. When George Osborne stands up today and announces, for instance, the reduction in the 50p rate he will do so with the support of two parties. Equally, a minority Tory government wouldn’t have been able to get more spending cuts to help finance a tax cut through parliament. It also seems that there should be measures in the Budget to please both Tory and

Tuesday

James Forsyth

More advance snippets from the Budget

The big Budget news tonight is that the personal allowance will rise to £9,205. This is a larger increase than expected and, intriguingly, will be paid for — in part — by a couple of billion more of spending cuts. So, the Lib Dems see considerable progress on their main budget priority, raising the income tax threshold to £10,000, but this will be partially funded by something Tory MPs have been calling for, more spending cuts. It also appears that the coalition will further increase the pace of its corporation tax cuts as well as introducing a new higher rate of stamp duty for £2 million plus houses. There’ll also

James Plunkett

Four tests for Osborne’s Budget


With the Coalition taking pre-Budget briefing to new levels you’d be excused for thinking there’s little we don’t know about tomorrow’s statement. But here are four questions we can’t yet answer, and that will be crucial to assessing whether this is a Budget for low-to-middle earners as the Chancellor claims:
 1) Will the new increase in the personal allowance be restricted to basic rate taxpayers? When the Coalition raised the allowance by £1,000 back in April 2011 they cancelled out the benefits to those at the top by lowering the 40p tax threshold. The second time around — the £630 increase that kicks in this April — they didn’t. From

Peter Hoskin

Why Labour’s 50p tax wobble is dangerous for Ed Miliband

Why did Gordon Brown wait until the last few weeks of Labour’s thirteen-year reign to implement a 50p tax rate? Easy. Because it wasn’t so much a fiscal policy as a fiendish trap, designed to cut into a Tory government’s flesh. But now, it seems, the trap has snared another victim: Labour itself. The Telegraph’s Daniel Knowles has already neatly summarised the politics arising from Sam Coates’ report (£) that Labour will neither back the scrapping of the 50p rate nor promise to reinstate it either. But the basic point is worth repeating: if that’s the approach that Labour chooses, then they’ll be left in a complete mess. They can

Eamonn Butler

Has Osborne learnt the right lessons from Adam Smith?

According to Rachel Sylvester in The Times (£) today, George Osborne’s love of soaking the rich — from the non-dom levy to the tycoon tax – stems from the importance he puts on the ‘empathy’ described in Adam Smith’s Theory of Moral Sentiments. If so, he’d better start re-reading his Adam Smith. Certainly, the Chancellor is familiar with Smith’s other great book, The Wealth of Nations (1776). He wrote an introduction to a recent edition of it. That book is a passionate call for free trade and for open and competitive markets, and a stinging critique of the mutual back-scratching between businesspeople and politicians — what today we would call

Sebastian Payne

Ken launches his negative campaign

A dark, damp and freezing cellar beneath Waterloo station isn’t an obvious choice for launching a political campaign — but that’s where Team Ken officially kicked off their Mayoral bid last night. Various prominent lefties were brought into the Old Vic Tunnels to warm up for the man himself. Eddie Izzard was also present to fill in the gaps and keep everyone engaged until the bar opened. Most of the policies discussed have already been made public, but there were a few new, colourful additions. Ken pointed out that Transport for London purchases energy at half the normal price, so why don’t they buy more and sell it back to ordinary

Peter Hoskin

Tax transparency is a triumph for Osborne

Transparency marches on, and what a joy it is. According to the newspapers today, George Osborne will tomorrow turn Ben Gummer MP’s call for tax transparency into government policy. And so we will all get statements detailing just what our tax pounds are spent on. To use the example being bandied around this morning, a £50,000 earner will learn that they contribute £4,727 towards welfare payments. As James put it at the weekend, George Osborne tends to have both economic and political motives behind his actions — and the two are present, if almost indivisible, here. No doubt the Chancellor hopes that taxpayers, on seeing where their hard-earned ends up,

Monday

Fraser Nelson

Yes to new roads, no to a pensions raid

New roads in Britain are badly-needed, but who should bear the costs? Motorists, says David Cameron — and his speech today is a move in the right direction. No tolls would be slapped on existing roads, so motorists are free to drive as freely as they do now. But if they want a shortcut, they’ll have to pay for it. What I’m uneasy about is Cameron trying to raid our pension funds to help subsidise this. There are many ways to raid pension funds — QE is one. The National Association of Pension Funds estimates that a scandalous £130 billion has been wiped from the value of our collective pensions