Wednesday, 21 March 2012

Budget Day

I know I should be more outraged than I am by the Budget. Partly that's because the bizarre process of negotiation by leak between the two coalition parties meant that, by the day itself, much of it was already in the public domain. Partly its because I am now of an age that a Tory Government cutting the taxes of the wealthiest in society is no longer something that would ever surprise me. Above all, however, it is because so much of what Labour is "outraged" about is in reality no more than we would have been likely to have done ourselves.

Almost nobody except those, perhaps, with a detailed knowledge of the system (few and far between)  believes their own tax contribution to be fair. Some believe instead that others should pay more; others believe everybody should pay less, most only care to the extent of being unhappy with their personal levy.

So there is a responsibility on opposition not merely to play to that prejudice, not only because that is how they would wish the current Government to behave when the roles are inevitably reversed but also because Parties of the Left believe in taxation as more than a "necessary evil" being rather a means to an essential good.

But, if anything, there is a bigger reason still. Bevan famously said that the language of priorities is the religion of socialism.

Now, how we got to this current economic crisis is a fair matter for argument. I would certainly argue that prior to the collapse of the Banks, Labour's spending plans were entirely sustainable. Indeed, it is too often ignored that, in that pre-crash environment, the Tories had specifically promised to match these plans. On the other hand, even if the banking disaster was in the nature of a natural event for which the Labour Government had no responsibility whatever (I admit a contentious proposition) that doesn't mean that everybody can just carry on as if it didn't happen. The major consequence may not even really be the large amounts of capital that had to be borrowed and ultimately repaid to keep the banks afloat but rather the collapse in tax revenues from the disappearance of the taxable profits of what had been a hugely profitable (and taxable) sector.

So any government would be left trying to balance the books as best they can. Again, I do not think that the Tories have called this right by relying on austerity alone. Growth had to have been an essential element of any strategy for economic recovery but even if, in reverse to Labour's complete innocence of any blame for the banking crisis, the lack of growth since 2010 is entirely due to the incompetence of George Osborne (I admit an equally contentious assertion) none of that wishes away the consequence of that lack of growth. It is commonplace for Oppositions to call on Governments to resign but suppose, for once they did? Suppose George appeared tomorrow and announced, somewhat improbably, I admit, that he was so haunted by his own past errors that he was standing down and that he and his Party would support whatever Ed Balls wanted to do. None of that would magically create the historic growth that (might) have happened if Ed had been in charge all along. There would still be a deficit and a consequent ever growing debt. It would still need to be addressed now. No amount of assertion that it wasn't Labour's fault things were so bad would stop things, actually, being so bad.

So this kind of leads me to why I am not as outraged as I ought to be.

There are things the Tories have done that do outrage me. The cut in the 50% Tax rate is certainly on that list. For them that is however worse than an economic error, it is a political error. If I return to my own example of people's personal taxes, while they might just be prepared to thole these if they genuinely think that all are bearing the burden of the past, they certainly won't do so if they think that people much better off than themselves are being let off in some way. Particularly if the logic is that they wouldn't have paid anyway! It can also be guaranteed that we will now hear special pleading over the years ahead justifying opposition to one or other particular spending cut or tax rise by reference to this particular measure, spending the amount it costs several dozen times over. Osborne, the supposed great political tactician should surely have worked that out.

But most of what they have done to outrage me wasn't done today. The changes to deny Working Families Tax Credits to those working less than 24 hours a week (it is currently 16 hours) is a naked attack on the deserving poor. That is really outrageous.  So is the decision to means test much Employment and Support Allowance after 52 weeks. It should be a priority (Bevan's word) to do something about that. It should not be a priority to suggest that a modest tax rise for well to do pensioners must be immediately abandoned. even if it can be given a catchy title, or enlist the Daily Mail in temporary alliance. Nor should it be a priority to restore Child Benefit in full to higher rate taxpayers; or cut the tax on beer to assist hard pressed pubs; or, strategically, reduce VAT to the level levied by Labour in a wholly different economic environment.

Just to be against everything the Tories are doing might play well with individual interest groups but the support thus garnered too often just adds up to a total level of public endorsement which is a considerable way short of the sum of the parts. Because it lacks all credibility.

So let's just be honest with the electorate. Things are a mess and some taxes are going to have to rise and some areas of public expenditure to be cut. Surely that will give us a more credible hearing when we are moved to genuinely say "Not this Tax" or, more importantly still, "Not this cut".

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