Wednesday, 3 December 2014

What does Osborne's uninspiring Autumn Statement mean for me?

Today, Chancellor George Osborne delivered his Autumn Statement.

What is particularly significant about this is that it represents the government's final opportunity to lay out its economic priorities ahead of the General Election.

Inevitably, the chancellor has heavily imbued the Statement with Conservative thinking, which is neither surprising nor particularly objectionable in itself.

However - lest we forget - the Liberal Democrats declared back in 2010 that the party should be judged according to the government's economic record. Effectively, this was tantamount to staking the party's electoral future on the Chancellor's economic plan. I have never believed that was a wise decision, and not simply because I had (and retain) concerns about Osbornomics.

So, what does the Chancellor promise in this final Autumn Statement? Is there anything that meets our "Stronger Economy, Fairer Society" ideals? Well, yes there is - a little. The problem with this Statement isn't that it's bad, because it isn't. But it's unconvincing and does little to actively further the Liberal Democrats' priorities, or indeed very much other than the kinds of initiatives welcomed by Tory voters. It's not so much what's in it that I object to, as opposed to what has been omitted.

Tomorrow's headlines will be focused on stamp duty reform. Some of my Lib Dem friends have hailed this as a positive move. Well, that's all good and well - but what if, like me, you don't own a home and have no realistic prospect of ever doing so? What if you happen to think there should be higher priorities than delivering an electioneering gift to the Tories? What if you're not particularly excited by the prospect of a 1.4% tax rate on your "average" £275,000 home?

Well, there are other measures. There's the so-called "Google tax", which is aimed at multi-nationals who divert profits to avoid tax. A good but overdue measure. There's also been the announcement that fuel duty will be frozen, that Britain will play a major role in the European Mars mission, and ISA allowances can be inherited after the death of a spouse. Nothing much to object to there, but also nothing that makes me think that the government is delivering fairness, or has the lowest-earning people in mind.

Useful, but insufficiently far-reaching, actions include bank profits offset by losses (for tax purposes) being limited to 50%. Again, this is an overdue measure but one that doesn't get to grips with the need to create a socially responsible financial sector. There was talk of creating a "Northern powerhouse" in England, which might finally go some way to dealing with unemployment hotspots, but it lacked specifics. A review of business rates has been announced to consider ways of helping High Street retailers. All fine in themselves, but there is a notable absence of detail, itself suggestive of a desire on the part of Osborne to talk the talk without actually delivering anything of substance. It's a party political broadcast on behalf of the Conservative Party - and one which is less than honest and lacks transparency.

I'm personally very happy with the advent of postgraduate student loans, but why limit them only to the under-30s? In the aftermath of a recession, surely we need to be investing in reskilling people of all ages?

On the plus side, a further £2billion will be injected into the NHS and hospices and air ambulances will now be exempted from VAT.  But is that enough? Make no mistake, this is essentially a Conservative economic statement, with its emphasis on stamp duty and increasing the higher income tax threshold. These are not issues Liberal Democrats are passionate about and, dare I suggest it, not what the majority of "ordinary" people are concerned with.

Also concerning to me were the borrowing statistics. These do not make good reading. For all the bluster, and claims of having reduced the deficit, the 2010 deficit target has been missed. Essentially, the statistics confirm that the Chancellor does not have control of the structural deficit. That has to be a worry, especially for a party that hopes the public will reward it for the government's economic competence.

Did we really want to be judged in the next election on cuts to stamp duty and a one-off cash bonus to the NHS? It's not a terrible statement, but I'd hoped for something I could - as a PPC - campaign on...something I could sell on the doorsteps in Coatbridge and Bellshill. Somehow, I can't imagine many of my would-be constituents in Coatbridge, Chryston and Bellshill finding much to shout about in this. Quite honestly, because it does very little for people like them, or indeed me, for whom stamp duty, missions to Mars and ISA allowances don't feature highly in their daily lives. In fact, while I am far from an economic expert, it would appear that the taxation changes will actually lead to the worse off losing out.

What do these announcements do for unemployed people? Or the lowest paid workers? Very little, which is why I for one am quite disappointed - the Autumn Statement is not merely an uninspiring lost opportunity, it is aimed primarily at delivering a party-political vote-grabbing message that fails to take into account the need to tackle rising poverty and social inequality.

1 comment:

Anonymous said...

From the perspective of Wales, the Chancellor's statement looks like another pre-election pitch for Middle England voters. From Scotland's standpoint, surely it must underline what might have been if another 5 per cent had found the courage to vote Yes on 18 September. What a lost opportunity to get shot of the Westminster elite for ever. Dafydd Williams