Monday, March 29, 2010

A Big Day For George Osborne

This is an important day for George Osborne. Today he made possibly the boldest policy announcement so far, promising to abolish Labour's tax on jobs and this evening he will be taking part in a live TV debate with Alistair Darling and Vince Cable.

At his press conference, George Osborne called Labour's proposed hike in national insurance in April 2011 the "economics of the madhouse", and it's not difficult to see why. If you are an employer and see your staffing costs rising by 1%, you are less likely to take on new members of staff and more likely to downsize the ones you already have. It really is a tax on jobs. Osborne has already promised to give new companies who take on up to ten employees an NI holiday. It's difficult to see what better signal there could be that the next Conservative government will have enterprise at its core.

Ah, Labour say, but how will all this be paid for, which, when you think about it, is a bit of brass neck for a party that has plunged us into such levels of debt. However, it's a question which is a fair one, and which got a detailed answer from George Osborne this morning. His answer was in sharp contrast to Labour, who say they want to cut £11 billion of waste and efficiency savings out of the cost of government - but not until 2011-12! Why not immediately? Cutting out waste, and being more efficient cannot jeopardise us coming out of recession.

The announcement puts Labour back too where they were in 1992 - defending a tax rise on people earning £20,000 a year. And £20,000 is not what it was back then...

I am hosting a charity political quiz night tonight, so I won't be able to see the Chancellors' debate (8pm, Channel 4), but I have every expectation that George Osborne will perform well. Yes, he needs to, but so do the other two. What will be interesting is whether, if he performs well, his enemies will be able to bring themselves to acknowledge it.


Grand_Inquisitor said...

Yep, I hope he shines. Unlike Nick Clegg's performance a couple of weeks ago on the BBC's Sunday Politics programme which was a real clunker!

Man in a Shed said...

The real danger here is how the public respond to Red Vince's pronouncements.

The usual Lib Dem a plague of both your houses / why can't we all be reasonable line will be appealing to those who want to stick their heads in the sand and not face up to the earth shattering disaster that Brown and Darling have prepared for us, but have so far managed to keep quiet.

I wonder if Labour haven't agreed to this debate to bolster Red Vince and help sure up Lib Dem marginals to help Brown hang onto power.

golden_balls said...

How the conservaties twist and squirm.

If Labour had announced this at the budget would you have given the same reponse iain ? The Tories soon change tack when it suits them lol what happend to bringing the deficit down faster than Labour ?

It gives Labour the opporunity of drilling the conservatives for being irresponsible for afew days. Then give it a week and Labour will do the same with different Priorities. Cynical but i'm sure Labour minds are already thinking this.

The Purpleline said...

Iain- The problem for George is this and it is simple, the Labour Tax hike is coming in the future, therefore the worker going about his business and to some extent small business owners will not see any immediate benefits reducing a Tax that is not yet in place.

Voters are very fickle, that is why the recession for people in work has been a good one. People in work with a mortgage are paying lower re-payments; I reckon most have more disposable income, especially those that benefited from the VAT cut last year. So the recession is a little like the start of WW2 it is phoney for almost half the country.

Basically anything that changes things that have not yet happened is a problem for the Tory party. What the Tory party need are a few small business employers to come out in support and state they will change their employment policy now and will not freeze hiring if the Tory party are elected.

The other major problem is efficiency savings are hidden, the Tory party need a bold clean cut on spending, this pussy footing about is not acknowledged by the target market audience.

What they should do is follow my advice, be radical on Tax and Welfare.

1) State they will stop the 50p Tax increase

2) State they will stop the NI increase

And to pay for it, they will increase the Top rate of Tax to 44p for people earning 65,000 and above. With a guarantee to reduce the top rate of Tax to 42 p in the next parliament and then down to 38p in the next parliament. (Thus securing a second term)

This coupled with increasing the Tax allowances to 7,000 then 8,000 with an aspiration to increase to 10,500 in the next parliament for low paid workers would be a strategic honest political move that would kill Brown in the polls for years.

This could be paid for by increasing Vat, if required, to 18p


Allow Isa's to have a special dispensation to buy Bank bonds paying 3% (INFLATION LINKED) & convertible into shares locked up for 5 years. This would be a part re-privatisation policy and for low paid workers, if they buy they get it tax free. This would give the general public a stake in the banks, take the political pressure off the bankers and be designed for the small investor.

Minimum Wage.

I have always been against this as I believe it creates a magnet for employers to maintain pay levels at the artificial low level and creates a cellar for those employers who have an interest to keep pay low. What I mean by the cellar employment is the minimum hours that are used by certain retailers, where they use lots of staff on contracts of as little as 4 hours a week, but then use the rota system to complement staff levels to make up hours outside of their contract. (I will be writing to the appropriate ministry about this practice and copy to Tory party) I think this practice is really negative to employees and traps them into low wages and no benefits.


The safety net should be just that a safety net for when people hit hard times. It should not and should never be a trawling net that catches people and traps them into the benefits system, creating nothing more than serfs of the Labour government and natural voters.

Lastly a re- phasing in of the Pensions dividend Tax grab that Brown introduced and which has had a direct effect on the share prices of top firms severely restricting their ability to raise capital and further increase their profits. While hurting every pension in the land.

Come on George get it right and a landslide is there for the taking.

Anonymous said...

Indeed surely 'efficiency savings' should be a fact of everyday life in government. Certainly a governmet running £165 billion deficit and heading for a £1.4 trillion national debt. Whats wrong with efficiency and efficiency now not later.

The real scandal is that there are eficiencies to be made in the first place.

Paddy Briggs said...

Yeah abandoning tax rises when Government budgets are in a record defecit is a really smart thing to do isn't it. Can this man count up to 10?

Gerry57 said...

With all the recent praise for Vince Cable and suggestions that he should be Chancellor of the Exchequer in a hung parliament, it was interesting that in last week's Comres poll only 13% trusted the Liberals to run the economy.

DeeDee99 said...

Someone needs to tell Osborne to look at himself in a mirror and practice not looking like a sulky teenager when he isn't talking. His mouth automatically drops into a negative and sulky expression and it isn't a good 'look.'

What he says is generally OK and I don't understand why he gets so much flak. But there is definately room for improvement in his demeanour and, like it or not, appearances ARE important.

Unsworth said...

@ Trevorsden

Exactly. One has to ask why it has taken thirteen years to discover that efficiencies are poor and economies can be made. Did they somehow take their eye off the ball? Or did they not even know the ball existed until about a month ago when someone pointed it out rather forcefully to them?

golden_balls said...

i've just watched daily politics hammond looked bewildered when probed about this. I hope he gets lots of airtime during the election.
Osborne and Hammond what a delight to see those centre stage in april.

I've yet to see the Tory sheep come out and applaud this new policy. When the previous week they wanted the deficit cut faster and deeper.

Tory hypocrisy can you ever have enough lol

DespairingLiberal said...

George Osborne - An Apology.

During the last year, Tory bloggers have run headlines like "Osborne inheritance tax change will bring about Tory landslide", "George most popular man in Britain", "it was George wot won it", "Cameron to have 100 majority with Osborne" and so on.

We now accept that all of those blogposts claiming that Osborne was the greatest genius of modern times were in error. In fact, we now see that each and every time poor George opens his mouth or appears on the tele, the Tory vote slumps another 1%. We also acknowledge that it was a grevious error of judgement appointing a man who sounds like a silly spoilt baby as Shadow Chancellor and it should have been Ken all along. We can only apologise and wring our hands as we move inexorably to an overall Tory Minority.

On behalf of Tory blogs everywhere, we can only say that we meant to say that all along.

Jimmy said...

The thing about Gideon is that expectations of his performance are so low he can hardly avoid exceeding them. I'm sure he'll try though.

Will he be allowed to phone Ken if he doesn't know the answer?

Anonymous said...

Golden Balls and D. Liberal = Cheer leaders for Gordo, Lord Sleeze and Campbell. We should be preatered to shake hand with the devil to get these labour imbiciles out. Only in this country, we like masochism engineered by Labour. Voters want Blair and Gordo, because they are liberals and lefties. What a country this has become!

Jules Wright said...

You bet it's a big day for him; it will define whether he keeps his job or gets moved. If he makes a Horlicks out of it, then stand by for a Ole Gunnar Solskjaer moment with Clarke coming in.

Who should be in the job already. But that's another story.

Mulligan said...

Well Iain, seeing the trolls out in force I can only surmise that they fear Osborne rather more than they're letting on.......

Twig said...

@Paddy Briggs
If a business takes on a new employee because of a NICs reduction, that is one less person burdening the taxpayer.

I'm sure the reduction in benefit costs will more than compensate for the reduction in NICs.

Sid's Dad said...

The politics of the madhouse eh? Hmm strikes me that spending £97 billion on new nuclear weapons is the politics of the madhouse!