Budget commentary: What a way to run a country

Here's Danny Alexander (the big guy second right) who claims he had nothing to do with the last five Tory budgets. In this picture he is interrupted delivering hamburgers to No 11 by an accidental photocall with his boss, who's the guy holding up the red briefcase. Poor Danny, spent the last five years not knowing where he was. Ed

by Derek Bateman

What a way to run a country…two posh boys shouting at each other in front of a baying mob…a civil service team concocting in secret a political package aimed at winning votes rather than helping people to live more comfortable lives…and a population left wondering what it all means.

Britain’s self-indulgent 19th century Budget tableau, battered red box and all, doesn’t inspire popular loyalty to a system of government so much as incite a mass contempt for a choreographed charade in which the taxpayers are silent extras.

Why isn’t there, as Nicola Sturgeon said, a process like that in Scotland where a Budget outline is published, it is seen by all and debated, left open to amendment and, weeks later, voted on in parliament?

Perhaps because it is a functional idea in which the public and their representatives get their say instead of a massive list of often-contradictory measures bundled up to they take weeks to unravel and presented to make a political, rather than an economic point. How the Westminster cartel love their parlour games.

And what a neat contrast with Shadow Cabinet member Rachel Reeves declaring that Labour was not the party of the unemployed and the benefit claimant. You couldn’t have a sharper definition of why Westminster is a distortion mirror of reality.

Osbourne: has he done enough, and will it matter?
Osbourne: has he done enough, and will it matter?

The keynotes of Osborne’s presentation appeared to be aimed at those in work, the elderly, savers and investors, the self-employed and taxpayers generally. In other words, a Tory constituency. Much of this is covered by sleight of hand.

For example, the raising of the tax threshold does take people out of tax but unfortunately, many of ‘the new jobs’ created in the ‘fastest growing economy’ don’t pay as much as the £10,000 threshold so receive no benefit.

Minimum wages, zero hours contracts, short-term working are the new corporate accessories for bosses so that most of one million new jobs are part-time or self-employed and those self-employed incomes are up to 40 per cent lower than those in traditional jobs.

Four and a half million workers earn less than £10,000 so raising the threshold doesn’t help them. They also lose out on tax-related benefits like allowances for retirement saving.

Removing tax from the first £1000 of savings interest is a similar move – some slight relief for low savers in an inflation-less economy. But how many of the low-income families of Britain have any savings at all, let alone enough to earn a grand in interest (at rates less than 1 per cent)?

The bragging about changing Britain into a nation of savers was Gordon Brown-esque. Britain is awash with debt, our finance-heavy economy depends on it. In every part of Britain, with the possible exception of richer parts of the South East, it is the same. Almost 1 in 5 families across the East Midlands are trapped by debt.

That’s according to new research by the Children’s Society which says around 100,000 families are struggling to keep up with household bills and loan repayments.

Almost 200,000 children across the region are living in families with problem debt.

So George suggests you save your money in an ISA instead of borrowing from Wonga and you’ll get a few quid a year tax free. The grim reality though is that even those with employment are now paid so little that tax receipts are failing to boost the Treasury coffers. Even the Exchequer can’t benefit from Osborne’s glorious boom.

And what a blinder the oil companies have played. Just when they needed to cut costs, along came the Brent crude price crash giving them a ready-made excuse to plead poverty and beg for relief while laying off staff. Now taxes are cut and allowances raised ready for the inevitable climb in oil prices. There will be bubbly flowing in the lobbyists’ offices tonight.

There was much braying when Osborne said an independent Scotland couldn’t have afforded these changes – a touch ironic when he was only removing the extra tax he himself imposed a few short years ago.

But, as ever, the truth is that Scotland would have had its Budget-proof oil fund if it had been independent and we could have watched the British Budget dispassionately for the Ruritanian show it is.

He also claimed to know the economic growth for the next few years ahead. He didn’t tell us the last time the Office for Budget Responsibility got a forecast – right perhaps because it never has.

And hasn’t Osborne left a bomb ticking in the irresponsible decision not to reform the annuities industry but to explode the idea of living off the income from accrued pensions savings…Many will be tempted to empty the pot and say To Hell with It, leaving them destitute and in the hands of the State. Others will succumb to the lure of the crooks, bringing a litany of distressing life stories.

At the very least, it should be a statutory requirement for any pensioner and impending pensioner to go through an official process to examine detailed options and implications in each case and to meet an official adviser followed by a prolonged cooling-off period before hundreds of thousands of pounds are released.

In 10 years’ time this one decision could come to encapsulate everything this government stood for – short-term popularity, loadsamoney culture and a bankrupt state.

On the other hand, the public budget cuts are now minimised, either because it was a PR trick last autumn or because he was frightened by the publicity about spending going down to 1930s level.

That should make life a little easier for John Swinney. How he must get sick of being forced to react to the British Variety Budget Show.