EDITOR’S BLOG: Gordon browns us off with his Budget
It’s that day of the year when financial journalists, quiet and relaxed people for the most part, get mildly ruffled about what the Chancellor will put in his Budget.
Will income tax be abolished or fags put up to £10 a packet? Will the rich be taxed more, or the poor deprived again, or the middling majority of us taken to the cleaners by his latest measures? As the morning wears on the tension builds, the speculation deepens, and the end result is..?
Well, anti-climax for the most part I suppose. The newspapers always set aside whole sections to report the Budget and always seem to recourse to repeating the same thing five times over to fill the space. How many words, for example, will the national press expend on telling us about the VAT cut on nicotine patches to 5%? With stuff like that the finance editors will be smoking 40 a day to cope with the disappointment. No, a whiff of anti-climax after a Budget is as traditional as the smell of gunpowder on Guy Fawkes Night.
And maybe that’s not such a bad thing. A moderate Budget is surely a sign of a stable economy and by most yardsticks that what we have at the moment, despite some inflation worries and a heavy burden of personal debt hampering many consumers. Extreme measures that might make a Budget compelling stuff may betoken an extreme situation, and in economic terms that’s rarely a good thing for anyone.
Having said that, the decision to cut the basic rate of income tax to 20p from April 2008 caught a lot of so-called experts on the hop, just like the “surprise” interest rate increase in January this year. However, simultaneously scrapping the 10p lower rate will probably ensure that most people are no better off – so it’s another ‘steady-as-she-goes’ measure when you look at it objectively.
Similarly, the increased road tax of £300 on so-called “gas guzzlers” is another non-measure masquerading as firm policy. The environmental lobby has made hay with these beasts for a few years now and many in Government, keen to assuage the concerns of an increasingly Green electorate (and even keener to capture their votes), have made all the right noises about taxing the battalions of fuel-inefficient monsters that rumble ever more obtrusively along our roads.
But, come on! One term for these absurd vehicles is ‘Chelsea tractors’, as the people who drive them tend to own a country pile to go along with the King’s Road pad and the yacht moored at Rock. Three-hundred quid is the equivalent of what you and I find down the back of the sofa when spring-cleaning to these people. Again, it’s a ‘measure’ lacking any real height, breadth, depth or volume, a sop to those who are worried that the gas-guzzlers might one day spell the end of civilisation as we know it and, at the same time, a crafty nudge and a wink to their proud owners.
Then there was the usual guff about increased spending on the NHS, the sale of Government assets (thoughts of the national family silver are most unkind) and the not altogether dispassionate description of the Budget as “one to expand prosperity and fairness for Britain’s families”. Please collect your milk and honey at the exit, folks, and praise be to Gordon for creating this latter day financial Utopia.
But the fact remains that the earth hasn’t moved for any of us and, despite the torrent of emails offering “comment” on the Budget that are flooding into my computer as I write, there isn’t all that much (really) to comment about. Everyone will try to work an angle on it, but the economic geometry looks pretty flat from where I’m sitting.
And, as I said earlier, maybe that’s not such a bad thing. Moderate measures mean we live, for the most part, in moderate times. Long may that continue, because they are better than hard times by a country mile.