Osborne’s ‘no gimmicks’ budget: How much can we trust?

What hope would the UK have if THIS man continues as Chancellor of the Exchequer after the general election?

What hope would the UK have if THIS man continues as Chancellor of the Exchequer after the general election?

George Osborne will deliver his final budget of the current Parliament on Wednesday and – if it proves to be the last he ever gives – it won’t be a moment too soon.

Ever since his ’emergency’ budget of 2010, which ended the economic growth created by Labour’s Alistair Darling and ushered in three years of economic flatlining, we have had to endure an unending stream of nonsense from this chancer-among-chancellors, this most mini-among-ministers, this least-treasured Treasurer.

Today we heard that he is again attempting to bribe pensioners into voting Conservative, with a plan that encourages them to take out their defined contribution pension annuities for a lump sum – which, it seems likely, will then be used up in short order, leaving the pensioner to fall on the mercy of the state.

It seems to be more short-termism – getting senior citizens to spend, in order to create a minor boost to economic activity now, while storing up problems for the future.

Osborne says no, and told the BBC that it was “patronising” to suggest people might blow the money on an expensive sports car, then come back for more when they ran out of cash.

This is from the Chancellor who, prior to the financial crash, told Gordon Brown repeatedly that bankers could be trusted to run their businesses unregulated; and who, once in government, based his entire economic strategy on a theory that has since been comprehensively trashed.

The Guardian has listed a few more claims that Osborne might make in his Budget speech, along with the counter-arguments. We shan’t bother with the arguments in support of him here – let’s skip to the good parts. Here are the claims – and their debunkings:

The Government’s plan is working – Deficit reduction has been much slower than Osborne forecast five years ago. In his first budget, in June 2010, the chancellor predicted that he would need to borrow £37bn in 2014-5 and that tax receipts would cover day-to-day government spending. The actual figure will be almost three times that, and, when adjusted for the state of the economy, the 2015 budget deficit is expected to be higher than any other EU country barring Croatia, according to Investec.

Britain has the fastest-growing economy in the G7 – Osborne’s account of his stewardship is partial and misleading. It ignores the first two years, in each of which austerity measures knocked one percentage point off growth, resulting in a flatlining economy. Britain’s recovery from the 2008-09 slump has been the weakest of any in the past 100 years, slower even than the bounce back from the Great Depression of the 1930s. Real wages have at last started to rise as a result of falling inflation, but incomes per head are on average the same now as they were in 2006, before the financial crisis. Business investment has fallen for the past two quarters, and the current account deficit is higher than ever, at 6% of GDP.

We are helping hard- working people by raising tax allowances – Raising the personal allowance is not a well-targeted way of helping the low paid because it helps earners further up the income scale as well. Britain’s low-pay culture means millions of workers don’t earn anything like £10,600 a year. As a result, Osborne is thought to be toying with the idea of raising the threshold for employee national insurance contributions, which is effectively another form of income tax but kicks in at a lower level.

We will ease back on austerity while sticking to our deficit-cutting target – Even after a trim, Osborne’s cuts programme will still look drastic. Labour will argue that he is taking too much of a risk with economic growth and jeopardising essential public services.

We will launch a new crackdown on tax evasion – This is too little, too late, and many of the perks that help the super-rich avoid tax – including non-domiciled tax status – remain in place. Meanwhile, the Conservatives are under fire for appointing former HSBC chairman Stephen Green as a trade minister, apparently without checking his possible involvement.

Feel free to copy out the above and check it against Osborne’s speech on Wednesday.

One thing is certain – it will contain nothing that should persuade you to vote Conservative in May.

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7 thoughts on “Osborne’s ‘no gimmicks’ budget: How much can we trust?

  1. Chris

    …Today we heard that he is again attempting to bribe pensioners into voting Conservative, with a plan that encourages them to take out their defined contribution pension annuities for a lump sum – which, it seems likely, will then be used up in short order, leaving the pensioner to fall on the mercy of the state. …

    The Tory press say that council grants will reduce from a high of around £14 billion in 2010 down to a mere about £2 billion by 2020.

    The private pension industry is warning that cashing in a pension could mean more than half go in admin charges and tax.

    And the idea of … leaving the pensioner to fall on the mercy of the state…

    There is little if any state left for pensioners.

    The beginning of the end of the state pension looms on and from 6 April 2016.
    See why under my petition at:

    https://you.38degrees.org.uk/petitions/state-pension-at-60-now

    The poorest workers especially
    who have not realised
    they were out of the welfare state and state pension by
    earning so little that they were
    below the Lower Earnings Level
    to get automatic National Insurance credits.

    Currently you get some state pension from 1 year NI history.

    The flat rate state pension grants nil state pension if below 10 years NI record.

    Most new jobs since the crisis of 2008 have been low waged part time.

    Universal Credit replaces working tax credits 2016-2014, and people in part time jobs will be sancitoned for not doing the miracle of moving to full time hours.

    Universal Credit has permanent sanctions from Hardship Payments becoming recoverable loans, where as now are just a benefit, and so will go after any future benefit or wages, by direct deductions by the state.

    And half the over 60s are within the working poor.

    Pension Credit is hit by Universal Credit (currently a few years bfofre the raise retirement ages) which absorbs housing benefit, because
    if either partner is below retirement age they cannot access it, either of them.

    The flat rate pension abolishes the savings component of pension credit for new claimants from 2016.

    And Pension Credit guarantee credits will be far more conditional even for current pensioners from 2016 tax year.

    Many benefits end after age 64.

    Women especially, but men just the same, face a penniless starving old age back to the Victorian era.

  2. A-brightfuture

    Osborne is an emotional car crash, the vast policies made by him and his barmy army, are made on THEIR OWN emotional insecurities.

    One look at that “wide eyed and legless” look in that video only confirms his state of mind.
    Nothing will ever surprise me in what comes out of his mouth. And to be honest its a waste of space, time and energy even writing about him.

    It reminds of the Amy Winehouse song.

    “They tried to get me go to rehab”………..I said NO NO NO.!!!!!!!

  3. wildswimmerpete

    @ Chris
    “And Pension Credit guarantee credits will be far more conditional even for current pensioners from 2016 tax year.”
    I receive PGC and there is no conditionality – I cannot be sanctioned. I understand the same applies in the future, as long we vote out any Tory controlled government in May and keep them out. PGC is also passported so housing benefit and council tax benefit are protected.

  4. Andy

    We already know that it’s just going to be another round in the transfer of wealth from poor to rich.

    Mr Osborne please learn what fiscal multiplication is and that investment in an economy is crucial to it’s well being, even when you are running a deficit.

Comments are closed.