George Osborne must delight in commentators describing him as a “political Chancellor”, because each time he comes to the dispatch box to present a financial statement he grows even more “political”.
The Budget statement was a tour de force in political fast footwork, though the substance of it was very bad news for the most vulnerable in society. Ending student grants for the poorest seems an especially mean move; a rise in fees to fund universities would be more defensible.
The ever-lower cap on housing benefits will result in many more forced evictions and the ghettoisation of unemployed families. Removing housing benefit from 18 to 21-year-olds will see many more vulnerable young people living on the streets. As in the 1980s, Britain will become a more visibly unequal society.
None of that seemed to embarrass the Chancellor. Within the space of an hour or so, Mr Osborne delivered plenty of the key pledges made in the election campaign, such as raising the threshold on inheritance tax. He made “down payments” on other commitments, notably raising the threshold for paying the basic and 40 per cent rates of income tax, and made serious declarations of intent elsewhere, such as extending devolution across English regions, cities and counties, from Liverpool to Cornwall.
In all of this he lays further claim to the notion that the Conservatives are the party of “working people”, squeezing the very poorest who have no job but standing up for those on lower incomes and indulging in some modest acts of redistribution from the very rich. Thus, those fortunate enough to have buy-to-let properties will lose some of their tax reliefs; those wealthy enough to receive more than £5,000 a year in dividend income may pay more in tax; and the rules for non-doms will be tightened further. Whoever would have thought it would take a Conservative Chancellor to come down hard on so-called non-doms who are in fact born in Britain and who spend virtually their whole lives here? As Mr Osborne remarked so often, it was Labour who allowed many of these abuses to languish on their watch.
And who would have thought a Conservative Chancellor would unveil –with a theatrical flourish – a national living wage? This is a project long associated with charities, poverty pressure groups and trade unions rather than Tory constituency associations and billionaire donors – but Labour’s ears really were not deceiving them at lunchtime: Mr Osborne introduced what is actually a higher minimum wage. With a target of £9 an hour it will lift many out of poverty. Iain Duncan Smith was waving his arms around his head like an overexcited football fan; bizarre sights and sounds abounded in the chamber.
Alas, it may not add up. Slashing tax credits (to which the previous Living Wage target was pegged) means the net effect for many may be minimal, especially given age restrictions and the cost of living in London. Yet Mr Osborne is busily painting Labour into its uncomfortable little corner as the “party of welfare” rather than the “party of workers”. He has enjoyed himself undermining Labour’s political base in the North of England with the “Northern Powerhouse” plan. It is a continuation of the strategy pursued with devastating effect at the election. The SNP offered a spirited response, but ultimately it fell to Labour’s acting leader, Harriet Harman, to reply to the Budget.
This is one of the most thankless tasks in the thankless job of Leader of the Opposition. It was never going to be her day, and it wasn’t. She and her party are in an unenviable position: they may not enjoy being labelled as the party of those on benefits, but who else will speak up for them as Mr Osborne plays his political games? Britain’s poor need friends in Westminster, and quick.Reuse content