Friday, 25 March 2011
The Day Boy George Turned Into Bob Flemming
You may remember when Saint Vince (when he still had his halo) inadvertently pricked the image of Gordon Brown with his "Stalin to Mr Bean" quip, well Wednesday's budget sounded as if it was read by the Fast Show character Bob Fleming. You know, the gardening presenter that finished every sentence with a cough that got steadily worse as the skit went on. Well Boy George was that man on Wednesday.
The general rule of thumb is that when you are in a hole, you stop digging. Osborne signaled that he intended to continue digging by carrying on with his "Scorched Earth" policy of destroying public services in the UK. The cuts will continue despite the growing evidence that continuing to take of money out of the economy to plug the gap exacerbates the dire economic situation in this country.
Services are not the only thing Osborne cut. He cut Corporation tax by 2% - taking effect at the start of the 2011/12 tax year, and in an act which must have been influenced by Gordon Brown, announced a whopping 1p cut in fuel duty (the other thing Brown used to do was have very short budget speeches, Osborne's lasted just over an hour). The other tax cuts will not have helped the ire felt by many, and may well put an end to the little untruth propagated by the soap-dodgers alliance. There is to be a 5.75% tax rate on "the treasury functions" of companies based in tax havens, while there is to be tax cuts for businesses with foreign operations. A quick read of the Tax Research UK post will reveal the scale of Osborne's treachery towards the British people. A quick look at the successive post is also required reading, as it outlines the estimated amount lost in Tax Avoidance/Evasion schemes (like the ones perpetrated by Vodaphone, Tesco & Alliance Boots to name but three).
Osborne has a plan though, and he is determined to follow it. Unfortunately it is a plan that has already been adopted by another EU country. You remember at the 2009 budget, when right wing commentators were imploring the UK to follow the lead of Ireland in slashing public expenditure. Well lets look at Ireland now, with it's mountain of debt that can't be paid because no one has any money, and those people with money are just sitting on it. Ireland, like Iceland and the other countries quoted in Salmond's "Arc of Prosperity" quote all believed in aggressive corporation taxes to entice companies to come to their countries. Did stuff all for their public finances, but hey Ireland did have a Dell factory, till they buggered off to the Czech Republic. The announcement this morning that WPP are to return to the UK is good news to Osborne's ears, but it's the only good news at the moment.
Milliband the Younger taunted Osborne by calling him "Lamont with an I-Pod" and calling the budget "Del-boy economics". It is unfortunately a lot more serious than name calling. At the moment, it is just scrabbling about for money. When the cuts come (all in the wrong places protecting management positions, of course), we will then see anger. This budget has not put liquidity into the economy, it does not help those at risk to cuts (like OAP's – who have seen their winter fuel payments cut), and it will not promote the growth required to offset the fallout from Osborne's Scorched earth policy. It may be treble's all round in the boardrooms and corporate offices up and down the country, but don't be surprised by the reaction to come from further down the food chain.