Thursday, 19 March 2015
The Budget: unto him that hath shall be given. . .
George Osborne's budget continues to give help to those who don't need it (but might vote Tory) and take it away from those who do need it.
Those of us with savings are to be allowed to earn £1 000 of interest per year free of tax. Well, 2% is a pretty average rate of interest at the moment, so to receive (I won't say "earn") that £1 000 you'd need to have £50 000 stashed away. Indeed, if you were daft enough to put your savings in a Lloyds Bank's "Easy Saver" account you'd need half a million, as Lloyds pays only 0.2% on that account Either way, holders of those amounts of spare money are not the most needy in society.
Maybe this particular "give away" is not so generous as it looks, because the astute and those with financial advisers will already have as much as possible of their savings in ISA accounts, which are already tax free. But the offer makes a good headline for the target audience of those who have "worked hard,. saved and done the right thing." Ugh.
Then there's the offer of a "gift" from the government of £50 for every £200 those saving to buy their first house put into a new "Help-to-Buy" ISA. The maximum amount of savings for this bonus is £12 000, to which the government will therefore " gift" a further £3 000. Indeed, if a couple are saving to buy, or have parents who can supply the money to enable them to pretend that they are doing the saving themselves, that's £6 000 of government handout towards their first house.
As well as the potential "dead-weight loss" of helping those who are probably saving anyway, the idiocy of this policy is that the problem in our housing market is one of supply, not demand. The result will probably be to further inflate the housing bubble.
At the other end of the scale the government is not so free with its generosity. Social security expenditure (I do not use the term "welfare" which has become condescending and mildly pejorative) is to be cut by a further £12bn, the police and legal aid will continue to be starved of funds, and guarantees of no cuts to the health services mean little with a rising and ageing population.
Local government services for parks, libraries, street cleaning and other provisions which make our society civilised will be further pared to the bone in a desperate attempt to preserve care services.
The Israelites in Egypt are said to have revolted when they were forced to make bricks without straw. Presumably Osborne thinks our ire will be mollified by the penny off a pint of beer - surely the most clichéd bribe in the pre-election budget lexicon.
Sadly , Osborne's risible boasts about the "success" of his policies (our economy "walking tall" when a more apt description would be "struggling uncertainly back to its feet having been unnecessarily clobbered for five years") is supported by the overwhelming majority of the media, described as mediamacro by Oxford Professor Wren-Lewis,and one in three of those likely to vote are deluded into supporting more of the same..