George Osborne’s first Budget
Feature
In his recent Budget, George Osborne satisfied our appetite for realism, honesty and a massive aspiration for a healthy, self-funding economy in the medium term. How we enjoyed every cut-throat word of it.
Despite his detractors in the City and the media, Osborne’s reputation is made. This Budget will be remembered even more than Geoffrey Howe’s pitch perfect 1981 effort — in which he defied 364 top economists to return the country to growth within a year — simply because, in scale and in enterprise, it tops it by a mile.
The structural deficit will be eliminated by 2014, producing a surplus that will begin the long haul of lowering the UK’s massive stock of public debt. Under Osborne’s strict rule, it will top off at 70% of GDP, not the expected 100% from Labour’s deficit halving plans.
This is serious stuff. It will need reductions in departmental spending of up to 25% across the public sector — apart from Health and International Development. The latter, of course, are political choices not economic ones. Any half competent economist can spot the waste littering these inefficient agencies of the State. I am sure they are marked down for major surgery in the Conservatives’ second Parliament — minus the Lib Dems, perhaps.
Crucially, he is holding off on Labour’s National Insurance rise for employers — a tax on jobs — and is progressively reducing Corporation Tax by 1% a year for four years.
One thing I enjoy about this hybrid administration is the zeal with which it scraps anything that has Gordon Brown’s stamp on it. Out goes the FSA, the laughable “Golden Rules”, hugely complex benefit mountains, and, as we’ll hear in the autumn spending review, much of Brown’s cretinous agenda for public sector dominance of personal behaviour.
Brown must wonder why he bothered to build such a vast top-down infrastructure of command and control, especially as all that treasure spent didn’t win him his coverted General Election victory. The Tories are clearly intent on total ruthlessness where corrupt Scottish Labour politics are concerned.
The question we have to ask is why our democratic processes didn’t protect the nation against the mafia-like tactics of Gordon Brown, Mandelson and the rest of New Labour.
Osborne’s Budget gives us hope that we will never see their like again.
Adapted from Syntagma.
