Thursday, 17 March 2016

Osborne, the Tinkerman part 94

That budget yesterday, what to say?

A million tiny changes left right and everywhere. The concept of 'Nudge' taken to its extremes.

My question is, why does George Osborne think aping Gordon Brown is a good thing?

This is the man who sat opposite Brown for years and witnessed first hand the financial crash and is in charge of the miserable financial accounts of the UK.

And his recipe for success is to do more or less exactly that Gordon Brown would have done.

As the saying goes, I have seen this film already and know how it ends.


But really, sugar taxes to pretend to pay for school sports etc. Pure gesture politics.

The only real surprise, is hidden from most people, that commercial property has been whacked the same as residential. Now, when the same stamp duty was applied to Residential the market came off very quickly; so it is likely that commercial property will too.

Certainly this is a good thing in the round as the asset bubble in property is very full; however, it still dents growth prospects as so much of the economy is dependent on property. It is the only brave move of the budget yet the Government are too worried to crow about it. Bizarre.

20 comments:

Blue Eyes said...

So you are saying that he has done some goodish long-term but possibly unpopular things and misdirected the coverage so as to concentrate on the trivial? How awful.

I don't think Gordon Brown invented Budget Tinkering. I think you memory is too short. It wasn't that long ago in the scale of things that the Chancellor nano-managed bank loans and Hire-Purchase and many other day-to-day things.

Bill Quango MP said...

The business rates is very welcome. \sadly, about 8 years too late.
But still...
Potential £5-£10k saving for many high street SME.

dearieme said...

What if his reading of the electorate is right? On average they are dim, impatient, ignorant, selfish, and sentimental; that's my guess at how he sees them. Is he wrong?

DtP said...

As per Dearieme - I think we've crossed over from what the economy needs to what the punters (or their impression of the punters) wants. In effect, he's only playing against Corbyn - debts, deficits, recessions etc - they're someone else's problem. He's playing such short term electioneering that everything else is irrelevant. I think the sugar tax, like establishing academies are just triangulated options appraisals. It's back to the 'in the land of the blind, the one eyed man is king' stuff mentioned previously and whilst the punters may not 'love it' they're certainly not disposed to riot. Bit depressing all in all.

Scan said...

"My question is, why does George Osborne think aping Gordon Brown is a good thing?"

Err...because this Conservative party is a gang of thieving communists just as much as Labour.

Electro-Kevin said...
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Electro-Kevin said...

The 'sound' economy is based on the engine of personal spending and borrowing - not manufacture and export.

I have, since yesterday, more first had experience that nothing much has changed in the welfare state under the Tory administration.

Speaking directly to the single mum I know (having got herself pregnant at 14):

- semi detached house - check
- furnished throughout like a Next catalogue - check
- state funded dog - check
- emergency credit cards for washing machine (etc) replacements - check
- latest 4G mobile phone - check
- special needs kid (of two in the same family - ADHD, coincidentally of course) necessitating mum to stay off work until the kid is an adult - check
- Three exotic holidays 'of a lifetime'in far off destinations, since the credit crunch - check

The latest holiday (Orlando theme parks) comes with a free Fast Pass to beat the queues.

"Little ***** is 'high rate' so we get a free Fast Pass to all the rides."

"What's 'high rate' ?"

"High rate of dependency because of ADHD."

There is nothing wrong with the kid that I could see except she was a bit cheeky and wilfull.

So, for bringing up a naughty kid that disrupts class and the education of others you get all of the above.

The problem is not pensioners who've paid in 15% of their wages for 50 years only to get £120 a week back. Could you live on that ?

No wonder half of the world is beating its way to our borders.

Electro-Kevin said...

PS, I think the Fast Pass is given by the 'mercans rather than our state, but it rather tells how intimidated western authorities are by the rights-knowing, scene making unterschicht.

"Oh gawd. It's easier just to wave 'em through."

Bill Quango MP said...

A whole other thread EK !
There are regular stories in the US press of families advertising for disabled kid that they can take to Disneyland. Family jumps the queues that way. No idea if these were true. But there was a whole spate of them.

We begged and begged Osborne. All of us here. Posters and commentators begged him to make the changes at the START of the coalition. When people were ready. When the public understood that the party really was over and the hangover had arrived.

I expect that the student riots and the copycat thieving riots did much to scare government into making mostly stealth cuts instead of bold tax rises and slashed spending.

That window is gone now anyway. Before, it was possible, indeed truthful, to 'blame the other lot for this mess.'

Now - he is 'the other lot'.

Sebastian Weetabix said...

It's all just continuity Brown. Tinkering around at the edges.

If there is one thing he could do, which doesn't include nasty cuts and so forth, it is simplify the tax code. Yesterday he just made it longer again.

BE said...

SW and others, it is extremely easy to say "simplify the tax code". Goodness, who doesn't support that? There is no ideological argument *in favour* of a complicated tax code.

The problem is that when you sweep away an exemption, the people who lose that exemption squeal.

It suddenly becomes incredibly difficult!

Dominic de Mariveles said...

BE - the tinkering has the same effect. People squeal anyway. But Osborne exits like Brown as the smart comments here point; all short term games to make him PM.

But why PM Osborne, I personally fear that. I pay more tax than ever under the Tories, by miles, with him as PM it will be terrible and we will be well set for 2008 the Sequel: Crash Harder.

BE said...

Pardon my thickery, but how does tweaking cause the next crash?

andrew said...

Withdrawal symptoms...

Graeme said...

Perhaps Blue Eyes cn explain how adding clauses to the longest Act of Parliament is a good thing? How reducing headline corporation tax rates while simultaneously adding additional charges within the tax code is beneficial to anyone other than lawyers and accountants? If you want to cut corporation tax, cut corporation tax, don't try to weasel out of it by reducing the debt interest relief and loss reliefs, and trying to break international tax treaties on royalty payments. I think most people would view these measures as adding needless complexity to an already vastly complicated tax system.

BE said...

Perhaps Graeme cn learn to read?

I didn't say that complexity is a good thing in its own right. I would prefer simple flat taxes. Feel free to read my pre-Budget post, if you cn manage that.

Actually you picked a very poor example to rant about: the cutting of interest reliefs is to prevent multinationals from loading up on debt in the UK then making the profits outside the UK, and keeping the taxable UK profit down.

Perhaps Graeme and other moaners would like to tell us what simplification they would like to see, as it is so straightforward. So easy that Osborne, who used to campaign for simpler taxes, and Greg Hands, who once drove a steam-roller to the Tory conference with a placard reading "Flatten Taxes Not The Economy", cannot seem to achieve them.

Graeme said...

It seems I touched a nerve. You need to take a conceptual step back and ask yourself which country has the right to tasx anything. Why should the Uk claim more corporate tax than Ireland etc. Why should a company not take advantage of tax rates in one country to benefit its global operations? It operates for its global shareholdersand stakeholders not for BE and Osborne. Why should the UK be allowed to rob other nations of their due tax?

The answer is simple. Stop taxing corporations. Tax the owners of companies at the same rates as the workers. In the UK, if you own a small company, you can effectively earn more, by taking dividends, than if you are an employee. Why the disconnect? Because of people like you who do not understand tax in any rational fashion. If a company does not distri9bute its profits as dividends, then exact a tax on that and divide it between the shareholders. is that easy enough for you, BE?

Scrap the longest act of parliament, the corporation taxes act - all 40,000 pages of it. Or else use it as a bludgeon to flatten Osborne's head.

Graeme said...

Have you read the corporation tax act, Blue Eyes? Of course you haven't. You only believe the shit from Conservative HQ. I didn't want to be rude but you forced me pal.

Graeme said...
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CityUnslicker said...

BE - my point is that Osborne is fiddling just like Brown. In the end the economy turns and all the fiddling turns out to be a net negative and there is hell to pay.

Instead, as BQ said and we said, including yourself wisely, at the time, the place for Welfare and NHS cuts was 2010/11. Now it is harder, worse because of silly policies like ring-fencing foreign aid.
And now it is too late, because I would happily bet that the economy will enter recession before the budget ever balances.