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Summer Budget: Comment

One Nation George shows us a few handy tricks

Terry MurdenThose cheeky Chancellors – always saving the best till last. After spending an hour confirming a number of heavily-leaked plans on tax and spending cuts, George Osborne maintained the tradition of Budget speeches by keeping us guessing about the rabbit he was about to pull from his hat.

It arrived with some gusto and a ready-made headline that ‘Britain deserved a pay rise’. The compulsory National Living Wage certainly caught everyone by surprise, not least thousands of business leaders, big and small, who were frantically tapping into their calculators to work out how much it was going to cost them.

What he really wanted was something that would overshadow his £12 billion of welfare cuts because he knows, as well as everyone else, that this was no giveaway Budget.

Few failed to see the sleight of hand as he handed workers a guaranteed wage hike, while picking their back pockets of a range of benefits that will cancel out any gain.

The harshest of critics will portray him as a con-man whose raid on tax credits and housing benefits will far exceed the few pence added to the minimum wage until the £9 an hour pledge arrives in five years time.

Yet, it is wrong of the left to portray Mr Osborne as a class warrior favouring his mates in the mansions and doing down the poor on the housing schemes. He was busy rattling his sabre with the higher paid too, for instance raising tax paid on dividends that will hurt entrepreneurs and largely cancel out any gains from the cuts to corporation tax.

Some may scoff at the suggestion, but the Chancellor is trying to carve out a reputation as a proper One Nation Tory. He believes in rolling back the state – for rich and poor – and rewarding work. What is fascinating is how he is doing it by simultaneously presenting himself as a friend of the right and the left.

Few Tory Chancellors would contemplated, let alone championed, a minimum wage and, indeed he is known to have been irked by his party’s opposition to it in the election campaign that Labour won in 1997. Yesterday, as he tried to curry favour with ordinary working people, the right was cheering his welfare cuts, higher income tax thresholds and spending commitments to defence.

Behind his ambition for the party and himself is an enthusiasm for wrong-footing the opposition. Not only did he steal some of the policies that Ed Balls would have introduced had Labour won the General Election, he also gave his noisy neighbours on the SNP benches reason to feel a little cheated.

Nicola Sturgeon’s Business Pledge to get companies to pay the Living Wage will look a little hollow now that it is about to become mandatory for all. Her hope of securing control of corporation tax in the hope of under-cutting the rest of the UK will also require a re-think.

Mr Osborne may have delivered another illusory Budget – as Chancellors always do – but this one came with an unusually crafty set of tricks.

 

 

 

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