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The Budget – Bold or Bad?

Why is it that the Chancellor’s annual budget speech
always leaves everyone – and I mean everyone – unhappy? 

There isn’t, I warrant, a solitary person in the United Kingdom
this morning who can raise a hand and say, “I’m delighted with the Chancellor’s
statement; it’s just right for us and it’s exactly right for the country”.  The same no doubt applies to institutions, whether
private or state-owned.

It was ever thus, at least in my lifetime.

In my younger days, people dreaded Budget Day almost
exclusively because of the new tariffs that would invariably be imposed on
alcohol and cigarettes.  “Tuppence On A
Pint, A Tanner On Fags” would have been a typical headline.  Income tax might go up or down a penny, but
it was the rising cost of the then twin sources of the average Briton’s leisure-time
enjoyment that caused the most outrage.

In George Osborne’s budget yesterday, taxes on alcohol
and cigarettes were raised with scarcely a murmur of complaint.  Drinkers and smokers these days have too much
pocket money to care.  Walk past any town
pub this week, the spring weather putting everyone in a relaxed mood, and you’ll
have to thread your way through a crowd of guzzlers and puffers spilled out
across the pavement.  

In these supposedly straitened times, what we dread
most about Budget Day is not taxes on beer and fags but losing our elaborate
state structure of entitlements – unemployment benefits, disability payments,
child allowances, pension rises, free travel passes, fuel supplements, and the
like.

We expect to keep them all, and receive even more,
while preserving millions of jobs in the public sector – one-third of
government spending – because we feel, for reasons unexplained and
unexplainable, that we’ve earned them. 

Earned them! 
That’s a joke. 

Will someone explain to me how we’ve ‘earned’ our
existing entitlements, let alone new ones, in a country which, for as long as I
can remember has produced very little of industrial or technological value, and
which offers little in the way of services suitable for export. 

This government talks a good line about encouraging
enterprise but, like most of its predecessors, does little about it.  The enterprise culture in Britain is so moribund as to be
virtually ingrained.  It will remain so,
I fear, because the government that wishes to encourage enterprise actually
discourages it by leaving in place a terrifyingly complex mare’s nest of
government-imposed taxes, regulation and red tape.

Nowhere in Mr. Osborne’s budget speech did he refer to
business incentives such as regional enterprise zones, VAT or National
Insurance tax holidays, or reform of employment practices.  Established companies will welcome a minor reduction
in corporation tax, but new and post start-up businesses that struggle to make a
profit won’t enjoy the benefit for years to come, and many will not survive long
enough to enjoy it.

This Chancellor, like all the others, claims to have
been bold.  But a ‘bold’ chancellor is no
more than a minor variation of the ‘frank’ politician.  Whenever a minister utters the words, “Let me
be perfectly frank with you”, we instinctively smell a very large rat.     

Osborne has tinkered with the fiscal apparatus instead
of overhauling it.  He can blame the
economic downturn, or the Liberal Democrats, or the previous government, or Treasury
mandarins, or the weather, but the result will be the same as it has always
been.

Nothing changes and therefore nothing happens.

 

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