George Osborne
this week delivered a neutral budget which nonetheless provided some bold and
imaginative flourishes: a personal tax allowance of £10,000 which Labour never
dared to give the low-paid; help for first-time house-buyers; some relief for
drivers and even drinkers; and incentives for job-creation.
The Chancellor did
his very best with an almost empty moneybox, offering a touch of cheer to those
who need and deserve it most.
That, though, was
the politics. The horror story in his speech lay in the economics — the sorry
succession of statistics he was obliged to recite, which mock his own
predictions since 2010.
Most shocking of
all was yet another cut in the forecast for economic growth, which remains
stagnant. By the next Election, Britain’s output is likely to remain below its
2007 level. This is even more shocking than the fact that public-sector debt
remains sky-high.
Mr Osborne
proclaimed that Britain is creating the most competitive corporate tax regime
in the world, but said nothing about the dead-weight of business regulation
still clogging enterprise.
He declared his
commitment to shale gas extraction, despite the fact that Britain has lacked a
credible energy policy since the day the Coalition took office.
Britain’s only
shale drillers have just been obliged to halt operations for six months at one
site because of opposition from bird-watchers and Lancashire County Council.
This would be
comic, were not our national predicament so grave and our energy needs so
urgent.
Osborne claimed to
be promoting a renewal of national infrastructure, yet his government abjectly
refuses to create more airport capacity in South-East England.
He announced
welcome cuts in employers’ National Insurance and introduced a radical £10,000
personal tax allowance, but he has done nothing to stop HMRC’s latest act of
petty oppression: forcing even small businesses to report PAYE payments monthly
instead of quarterly.
The truth is that
this remains a fumbling Government, often incoherent in its policy-making and
incompetent about delivery.
The Chancellor is
personally unlovable, and his reputation has been severely battered by his long
succession of unfulfilled economic forecasts. He knows he is in deep trouble,
which makes him try too hard for winning words.
There are fears,
increased by hints from the Chancellor himself yesterday, that when Mark Carney
takes over as the new Governor of the Bank of England in July, he will print
money on an unprecedented scale to stimulate growth. This could unleash a surge
of inflation.
Once inflation
gets going, within months it can soar into double digits, as those of us old
enough to have lived through the era of 20 per cent and above, in the 1970s,
vividly recall.
With inflation
would come much higher interest rates. If that blight falls upon a weak
economy, we shall be in deep trouble — and it could easily happen.
But that is the
case for the prosecution.
Now, instead,
consider the case for the defence of George Osborne.
This was made with
painful clarity by the row of grinning, mocking, smirking faces on the
Opposition front bench while the Chancellor spoke. His words were sometimes
almost drowned out by the barracking of the arch-hypocrites of the Labour
Party.
It was these
people, headed by Shadow Chancellor Ed Balls, who plunged this country into the
worst economic mess of our lifetime through a decade of reckless and
unaffordable expenditure.
And it is they —
given half a chance by voters at the 2015 General Election, aided by a
Conservative vote split by UKIP — who once again in power will pick up exactly
where they left off in 2010.
Ed Miliband
thrilled to his own eloquence yesterday, denouncing Osborne as ‘the wrong man
in the wrong place . . . a downgraded Chancellor’. Yet Miliband and Balls
promise that if they get into Downing Street they will launch a renewed
borrowing and spending spree.
The policies of
Balls and his former boss, Gordon Brown, bombed Britain as devastatingly as did
the Luftwaffe in 1940. David Cameron and George Osborne inherited smoking
economic ruins.
It is impossible
honestly to blame the Tory Chancellor for the fact that the Labour-created
economic slump has proved far worse than he dared to fear three years ago.
Osborne was not
responsible for the near-collapse of Britain’s financial sector, a larger part
of this country’s economy than are its counterparts in the United States and in
Europe.
It is hard to hold
him accountable for the fact that much of the country, and the entire public
sector, resists tooth and nail desperately needed cuts to state expenditure. He
deserves full credit for sticking to his guns, imposing a further one per cent
pay limit on public sector workers.
He was also right
to emphasise one big piece of good news: state sector job cuts are more than
compensated by almost miraculous growth in private sector employment.
It was the
juvenility of Labour’s crowing in the Commons yesterday that seemed so
contemptible.
When the history
of these times is written, the global economic crunch which began in 2008 will
almost certainly be judged the most serious crisis of our lifetime. It has
impacted far more gravely on hundreds of millions of people than anything Al
Qaeda has done.
The threat to the
economies of the West — and the eurozone faces difficulties as least as serious
as our own — require from politicians statesmanship and courage of a high
order. David Cameron and George Osborne and their colleagues often fall short.
Campaigning for gay marriage while Rome burns scarcely promotes public respect.
But most of us
recognise the Coalition’s leaders as intelligent and decent men, doing their
best.
Their Labour
counterparts, by contrast, seem incapable of grasping the magnitude of what is
happening.
They play
children’s games and make children’s faces even in the midst of the Budget
debate. Ed Balls is a thuggish relic of 20th century socialism, who has
forgotten nothing and learned nothing.
There is a serious
danger that, as this economic crisis drags on — which will happen, whatever
George Osborne does — many British people will lose patience and turn against
business, wealth and capitalism, as have the French.
The Socialist
President Francois Hollande is implementing just the sort of bungling, doomed,
keep-spending-and-bash-the-rich policies that Balls will run if he becomes
Britain’s Chancellor.
France’s finance
minister said without embarrassment this week that he is less interested in
cutting public spending and shrinking his country’s bloated welfare state than
in raising more tax revenue from ‘big companies and the wealthy’. The latter
are, of course, fleeing France as its economy totters.
This could happen
in Britain.
Back in the 1950s,
Wilfred Pickles fronted a radio gameshow of which the catchphrase to his
sidekick was: ‘Give ’em the money, Mabel,’ Labour’s economic policy amounts to
a reckless intention to invite Mabel to hand over tens of billions the country
cannot afford to its payroll vote and increase taxation.
By contrast,
George Osborne may have made mistakes and got his forecasts embarrassingly
wrong, but he remains courageously committed to the towering objective of
reducing our dreadful national deficit.
The fact that his
Budget is most unlikely to produce a dramatic surge in growth reflects chiefly
the legacy he inherited, and the huge forces buffeting Western economies, more
than his own failures.
KBO (‘Keep
Buggering On’) was Churchill’s slogan. Osborne is faced with running his
Chancellorship on the same principle.
Back in 2010,
before he took office, he often said wryly that the shocking mess he was to
inherit at the Exchequer would probably destroy his political career. This
could well prove the case.
If he and David
Cameron were not so close, a change of Chancellor would soon seem politically
essential.
As it is, however,
they sink or swim together.
This week’s Budget
is unlikely to win many votes, but it reflects Mr Osborne’s dogged and
honourable commitment to restoring Britain to solvency.
Voters will see
many temptations to reject the Tories and, indeed, their Chancellor, in 2015.
But we must never forget that the only alternative government on offer will be
led by Miliband and Balls.
And their best offer to the British people is a ticket to economic perdition.
And their best offer to the British people is a ticket to economic perdition.
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