First published: Prospect Magazine, 18/03/2015
Taxes are going to go up
The promise of no gimmicks or give-aways in George Osborne’s last Budget before the election was greeted with widespread disbelief. But there were no pre-election rabbits to be plucked out of the hat. On the contrary. The Chancellor seemed to find virtue in a “steady-as-she-goes-and-you-will-benefit” strategy, which is how his party aims to fight the election—casting Labour as the party which will take incalculable risks and torch the last few years of hard work. The coalition parties will boast that the economy has turned the corner and returned to growth, which the Office for Budget Responsibility (OBR) has revised up a little, and that the UK now has record levels of employment and rising real incomes. So, why risk the reputation for competence?
Probe a little, however, and you can see that the Chancellor’s Budget strategy is only slightly less flawed than that of his opponents. The idea that the economy, which needs the clampdown on public investment to be reversed, can get through the next Parliament only with spending cuts as the Chancellor proposes, or with much fewer spending cuts as Labour insists is a fantasy. There is going to be a rise in the tax burden, which no one wants to admit…..“more:”
