Budget fever grows but is Gideon up to the task?

Cart crash: In line with the theme explored in this article, not only is it likely that George Osborne won't even have the right vehicle to carry his budget - he'll probably crash it, too.

Cart crash: In line with the theme explored in this article, not only is it likely that George Osborne won’t even have the right vehicle to carry his budget – he’ll probably crash it, too.

Part-time Chancellor Gideon George Osborne will be having another go at delivering a budget next week; while we can all hope he does better than the last four wrecks, experience – and a voodoo poll on the ConservativeHome website – suggests the opposite.

The poll asks readers to prioritise possible policies on a scale of one to 10, where one is “low” and 10 is “high”. The policies themselves?

“Cut spending further, so that the deficit can be reduced faster”. Clearly this is nonsense. Osborne’s massive spending cuts have, so far, delivered tiny reduction in the national deficit of only £7 billion – from £118 billion to £111 billion. In four years. Clearly, he needs to change his ways.

Other possibilities include cutting the higher rates of tax (or raising the threshold for them) – helping the very rich; extending National Insurance cuts for employers taking on young workers – helping employers; cutting business rates – helping businesspeople; and privatising more state assets, such as roads – helping rich investors and penalising the poor.

Other ideas intended to harm the poor include regionalising public sector pay, extending the freeze on public sector pay rises or cutting public sector pay, lowering the benefit cap to less than the current £26,000 per family and lowering a cap on broader social security spending that is yet to be introduced (it is scheduled for 2015).

All of the measures mentioned in the above two paragraphs will harm the British economy, rather than helping it. If Osborne includes any of them, he will deserve censure (if not prosecution, although it might be hard to find an offence on which to charge him after five years of Tory/Tory Democrat tinkering with the legal system).

By now, dear readers, some of you will be sitting with your blood boiling at this insolent blogger who’s telling you your prized policy ideas won’t work. You’re probably itching to demand what I would do to address the challenge.

I would have examined the economy from a different angle. Let’s look at it metaphorically.

Imagine the British economy is a haulage lorry or, better yet, a horse and cart. Tories are pushing us back towards pre-industrialism so we might as well get used to the idea. Either way, the job in hand is to take provisions to different parts of the locality that will allow the people there to prosper – and return with a share of that prosperity, to be distributed equally for the benefit of everyone.

Firstly, you need fuel. This is where we can prove that Osborne’s austerity is completely useless. How far can a lorry travel with an empty fuel tank? How far will a horse pull a cart if you don’t feed it? Not very far at all.

Then you need to make sure you’re providing the right kind of fuel. A diesel lorry won’t go far on petrol or vegetable oil before it starts to complain; give a horse the wrong kind of food and it will develop who-knows-what kind of digestion-related illness and keel over. This is what happens to an economy that is over-reliant on – for example – a single economy sector such as finance, or an economic ‘bubble’ like the housing growth triggered by Help to Buy (although this scheme could work well with the correct controls, in the same way you can probably keep a horse working with the correct medicine).

The result in both cases – no fuel or wrong fuel – is the same: Your supplies don’t get out to your people and they suffer as a result. The last four years of Tory/Tory Democrat rule has proved this.

In non-metaphorical terms: There must be investment, and it must be the right kind.

Then, of course, there is the question of what you have in the back of your lorry (or on the cart). You must be providing your people with what they need, otherwise there’s no point in making the journey and the fuel/food in which you have invested – in fact, the whole journey – will have been wasted (like Osborne’s last four budget attempts). Your choice of supplies will depend on what your people are doing – what crops they are growing or products they are making – and on whether these can be traded with your neighbours. If they have been misled into producing wares that can’t be traded, what good is that?

Get it right and you’ll be able to make a return trip laden with goods and supplies that will – with a bit of wise distribution and trade – help build up your society, meaning that the load might not be so great on the next trip. This means less fuel/horse feed will be needed and there won’t be as large a load in goods to be redistributed on the return journey (although an expanding economy means there might be farther to travel, so this must be recognised in the amount of fuel to be used).

That’s about as simple a metaphor as I can devise at the moment.

If I had to predict what will happen on Wednesday, though, I would probably expect Osborne to be demanding that we leave the lorry in the garage (or the horse in the yard), and struggle out on foot with all our burdens on our own back.

Not so much “all in it together” as “everyone for themselves” – and that’s how we’ll all be ruined.

Follow me on Twitter: @MidWalesMike

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23 thoughts on “Budget fever grows but is Gideon up to the task?

  1. Simon

    It doesn’t matter how simple you make it, Georgie boy aint for listening. Not to the likes of us anyway.

  2. david

    shared on TUSC Camden fb page saying:
    would expect the budget to be more of a donkey than a horse and cart myself

  3. Barry Davies

    “Gideon– Mighty Man of Valor”. No wonder he dropped the name it is most unsuitable for such a pompous oaf to use, he couldn’t organise a social excursion to an alcoholic beverage production unit if his life depended on it.

  4. HomerJS

    Sorry Mike, but Help to Buy in any form is bad. The problem with housing is the prices are too high. Bringing them down will not only mean lower deposits, but also smaller mortgages, less housing benefit costs, more money to spend elsewhere in the economy, and probably a few more things too. Help to Buy supports higher prices and the reverse of all the benefits of lower prices.

    1. Mike Sivier

      I read a while ago that it was a version of Keynesian ‘pump-priming’; are you saying that is not the case, then?

      To be honest, it would be a weight off my mind, if so.

      1. HomerJS

        Pump priming sounds ok, but it still has to make sense in other ways. Spending £30 billion on HS2 may be debateable, but spending £300 billion? It’s not just about spending money, it has to be a sound investment with all the right pay offs. Wars can create jobs and bring about lots of investment/spending, but with what costs? Put in another (better) way: spending £10 million on building 400 houses would be a good start; spending £10 million on building one house – not so useful.

      2. bookmanwales

        Help to buy as HomerJS said in any form is wrong, especially one that allows people to buy £600k homes, lets face it if you can afford a £600k home in the first place you are not exactly short of a bob or two.
        Maintaining high property prices does nothing for the economy, once the mortgage rate rises, as it will as surely as night follows day, then we have another mortgage crisis with people unable to pay their mortgages also higher rents leading to higher HB until eventually we crash and burn as in the last 2 property booms.
        High property prices and low wages prevent people spending money in the wider economy, leisure, food, clothing, entertainment, home improvements, travel etc. as they have insufficient .disposable income and so the economy (as we can already see) stagnates at best or shrinks.
        £5 billion on workfare, £500m on ATOS plus god only knows how much spent on “tinkering” wth UC, the NHS, Education, privatisation, foreign aid, bank subsidies (£around £5 billion a year just to RBS), Tax avoidance schemes etc. if all this wasted money was put to good use we would have the strongest economy in Europe, not the biggest group of offshore tax avoiders in Europe.
        Retrospective law to avoid £130 million illegal benefits theft ?.. a matter of weeks, Retrospective law to close all the tax loopholes ? Not in our lifetime…. !!

  5. jeffrey davies

    with mark carney in the bank and georgie boy on the outside cant one smell the cooked books together they produce a rosie picture were infact the house is tumbling down when the real figures get out but has for helping the poor to buy houses mark taking that right away only allowing those with money help to so hes taking that away but allowing this farce to go were are labour disputing his figures labour had when in never borrowed has much has goerge

    1. Barry Davies

      Nope bankers hospital administrators and mp’s will have above inflation raises and because the austerity is so bad for them the threshold for paying top rate income tax will be raised and the rate lowered, after all we are all in it together.

  6. MrChekaMan

    He is taking the blood out of the economy. If you make sure people can’t buy things then they won’t buy things and the economy then runs down.

      1. Barry Davies

        They may say that on Wikipedia, but there is no official workfare in the UK, it is either jobseekers, or employment support, because according to the government everybody including those in coma’s or on life support are able to work, and if they don’t should be sanctioned.

      2. Mike Sivier

        I don’t know what it says on Wikipedia; Workfare schemes have been running in the UK since 2012 (announced 2011). It isn’t called any of the things you suggest – Workfare is the term.

      3. Barry Davies

        Welfare to work is the real terminology not workfare which is the american system despite it wrongly being attributed to UK policies by lazy journalists, and bloggers. It is not now or ever has been a British thing.

    1. Barry Davies

      Well we will be better off and the Scots will have to start paying for themselves, we might even get 50P knocked off the money we have to give to the eussr.

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