As a direct result of our moderate, mixed, pragmatic popular-capitalist approach to economics in this country, I have a couple of days off work. I am putting my free time to good use by letting you know how people thought the Budget went. You can thank me in the comments.
The Shadow Chancellor decries yesterday's Budget as evidence that the "capitalistic" system has failed. (This was quoted in a BBC article, but the text has been subsequently removed, so you will have to take my word for it.) Mr McDonnell continued with some waffle about wanting a fairer system, with more opportunities, more happiness, and generally everything nicer. Specifics were thin on the ground, although he does seem to think that there is a rich seam of economic development to be tapped by investing more state funds in roads, railways and connectivity while cutting spending on welfare. So he agrees with George - and much of the centre-right - on something.
The libertarians are furious about the sugary drinks tax. Personally I am generally against nannying by the state. After all, we already know that soft drinks are bad for you and red wine is good for you, so why should the government interfere with our choices? But if we are going to have a nanny state, Osborne's proposal is at least less bad than a blanket duty on sugar across the board. He is giving manufacturers plenty of time to introduce new versions of their drinks before the tax comes in. He is exempting hipster East London tonic-makers. And most importantly, he is sending a strong signal (which is all economics is about in the end) that those small tins of Coke (other tasty fizzy pop is available) have huge amounts of sugar in them and really are best avoided. Our readers are already well-informed and thus probably won't be affected in the slightest. Let them drink tap water, I say.
Nigel Farage thinks that the only result of the sugary drinks tax will be increased smuggling. I don't know about Nigel, but when I go to France next I will not be wasting valuable boot-space on crates of Fanta.
The land-value taxers are angry because the Chancellor has cut business rates at the lower end of the market. This will help land-owners and not small business, according to them, because rents will rise to compensate. That might well be the case in places where the supply of commercial space is insufficient, but it seems to me to be less obvious in our depressed high streets and industrial estates. The business rate reduction hopefully begins to address some of the difficulties that small businesses in the UK have competing with home-based online sellers who avoid paying for premises in the first place at one end and the Amazons at the other end who can manage their affairs to take advantage of the complexities of the global tax system at the other. I will be interested to know what Bill Quango MP thinks.
Overall, my impression of the business tax changes as a whole is that small business pays less, and big business pays more. Some are saying that there is nothing inherently evil about big business, so why should they be hammered. Capitalists are not against big business, but large organisations find it much easier to navigate the regulatory and tax minefields and can be more productive because they have the resources to be more specialised. This is not something that should be punished, but I see nothing wrong in giving small firms some compensating advantages. After all, small firms are an important part of competition and innovation. In an ideal world, we would have a lighter burden overall, but we are where we are.
There was also a small helping of red meat for those on the right of centre. I didn't catch the exact figures, but George announced that public spending as a proportion of GDP is falling, and is planned to fall to its lowest level in many years. There was a slight easing of income tax for both lower and medium earners. Savers get an increase in their ISA limits, and no blunt end to the pension-contribution system for now.
In summary, the Budget was hated by the hard left and the unrealistic right. Those who love to hate Jamie Oliver will be apoplectic. But given the British electorate's usual preference for something middle-of-the-road, a fairly solid Budget. The direction of travel is clear: the state is gradually getting smaller; the public debt will eventually start to come down; but nothing too radical to cause an upset to our slow recovery.
As an aside, I think the OBR has done us a favour by predicting low growth from here to eternity. Osborne's big mistake in 2010 was to base his deficit plans on stellar future economic growth. His predictions were dismissed as laughable at the time, and so they turned out to be. It is A Good Thing not to assume that everything will turn out super-rosy, and then be disappointed when it doesn't.