Jolyon Maugham has explained how George Osborne is a master at pulling forward tax revenue from a future period into the current one with a view to making it look as though he is closing the deficit. There is no doubt that Jolyon's thesis is correct. He's also right that this is a trick that can only be repeated a limited number of times before tax begins to be demanded up front (and it can even be suggested that is happening now: ask anyone who has to buy a new house before selling their existing main residence after 6 April).
There is, though, more to this than tax, of course. Osborne has also benefited enormously from the boost to spending power that came from bank compensation payments. They will not repeat (I hope). And in the last year, the Guardian reports:
Savers have withdrawn almost £6bn from their retirement funds after the introduction of pension reforms last year.
New industry figures show that just over 213,000 cash lump sum payments totalling £3bn were made to over-55s since the changes were implemented on 6 April. On top of that, pension firms paid out £2.9bn in the form of regular sums to provide an income, said the Association of British Insurers.
The implication is that the industry thinks that it is not just the lump sums but the regular income that is being taken early. It's another case of robbing tomorrow for a quick fix today.
How many more times, at what long term cost to the economy, will we see this as the government desperately tries to balance its books, which is something which is not, anyway, within its control?
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
“t’s another case of robbing tomorrow for a quick fix today.”
The sadly laughable thing is that this is exactly the reasoning that Tories use for Austerity.
Fascinating article that shows the cost of administration of assessment centres and welfare cuts to sick and disabled (much paid to private corporations) is actually higher than any savings it can ever make.
What complete economic madness driven by Tory ideological insanity!
http://anotherangryvoice.blogspot.co.uk/2016/01/reign-of-terror-false-economies.html
And this is the Chancellor who stood up at the last budget and said that he did not want to ‘burden future generations’!! If you take away tomorrow’s money – what will you have to spend then?
The depth of deceit shown by this man is surely unprecedented in British politics.
Does anyone disagree?
Simon and yourself are on the same page, unfortunately Gideon must have flipped past a few pages in the book.
With somebody as arrogant, ignorant of economics and ideologically obsessed as Osborne Richard, this idiocy/sleight of hand will continue as long as there is something left to rob for a quick fix. As we both know, the book balancing exercise is nothing whatsoever to do with the future good of the UK, and everything to do with the right’s obsession with reducing the size of the state, no matter what the human or economic cost. The cut the deficit meme is just an excuse to do this.
Why does this remind me of Enron and mark to market accounting…..
Yet more evidence that we are definitely not “all in it together” and that the poor, sick and disabled are being made to pay by the Tories for the mistakes and lifestyle maintenance of the wealthy.
http://www.independent.co.uk/news/uk/politics/the-chart-that-debunks-osborne-s-myth-that-britain-is-in-it-together-a6957996.html
Tweeted
And yet more evidence of the game Osborne is really playing, improving the lifestyles of the wealthy at the expense of the poor.
http://www.theguardian.com/politics/2016/apr/01/top-uk-earners-to-receive-as-much-in-benefits-as-poorest-by-2020