March 26, 2011
When George Osborne and I briefly had children at the same inner London primary school, I used to harangue him every morning over the limp-wristed uselessness of his faux-Tory party.
“Just you wait till we get into power,” Osborne used to reply to me, eyes agleam. “Then you’ll see what real Conservatives we are!”
I’m still waiting. Sorry to disagree with Lord Tebbit on this but I really don’t see how the Chancellor’s bold decision to remove 50p from the (still-rising) price of a tank of petrol (by stealing £2 billion from oil company shareholders), give very small businesses a brief holiday from the insane equality legislation (but not EU legislation) which in opposition the Tories were too cowardly to oppose, and driving up the cost of energy through carbon taxes in any way represents a “budget for growth”.
Apparently, Osborne still doesn’t believe in the thing he calls “unfunded tax cuts.” But cutting taxes is what stimulates economic growth by driving down the cost of labour (thus creating jobs) and enabling people to keep more of the money they have earned and therefore leaving them more to spend. Also – as Arthur Laffer has demonstrated – it actually increases government revenues. Osborne may not believe in the benefits of tax cuts, just as he may not believe in gravity. But his adamantine stance against reality doesn’t make him principled or bold or “not afraid to be unpopular”, just a useless, economically illiterate prat.
And what of these savage cuts that the great unwashed are planning to waste more and more police time protesting against in the next few months? Well, as Fraser Nelson notes in the Spectator, they are small to non-existent:
The “total cuts” figure is, oddly, not printed in the Budget. Perhaps because it’s so embarrassingly small. After the Autumn Statement, it was 5 per cent over four years. Now it’s back to 3.7 per cent over four years: that is to say, total cuts of just 0.9 per cent a year. The Chancellor’s cuts are mild — milder than Denis Healey’s now-forgotten cuts. Over the next five years, the spending total has risen: in 2014-15, we’ll be spending £744 billion, an extra £11 billion. A relatively small figure, but you get the overall direction. Remember this next time Ed Balls talks about “deep and fast” cuts.
And here’s the verdict of the Institute of Economic Affairs:
“As a budget that was intended to be about encouraging growth, this is a disappointment. Even on the areas where the Chancellor is doing the right things, his reforms are tiny. He committed himself to simplifying tax rules, but has only eliminated 100 pages from our 10,000 page tax rulebook and has added many more.
“He stated a desire to relieve business from the burden of regulation. But even on his own numbers, the burden is only being decreased by 0.4%. That’s not a slashing of red tape. It’s barely even a trim.
None of this was in any way unpredictable. I wrote the epitaph on Dave Cameron’s Tories the day they were elected. It has been downhill ever since. And don’t get me started on this bloody pointless new war….
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