Osborne's abandoned the pasty tax.
And the caravan tax.
It's a good question whether or not he should have done; the pasty tax was a fix for an anomaly exploited by bigger businesses alone whilst the caravan tax was a charge on holiday accommodation. Should it have been VAT free? Neither question is in the big scheme of things that important except for what they represented.
Go back to the March budget: this was a fiscally neutral budget designed solely for political purpose. That was all it was.
Despite that it's very clear Osborne got the tax wrong: on these detailed points he called it wrong and is having to put it right.
But he also got the economics wrong: he remained committed to austerity and that's a disaster.
Worse still, he got the politics wrong. He cut tax for the wealthy but not everyone else. He reduced tax for large companies but not small ones. He supported tax evasion through the Swiss tax deal. He encouraged large companies to take their financing operations to tax havens and in the process harmed developing countries. In other words, he did all he could to increase tax avoidance and evasion whilst increasing the wealth gap.
What he actually needed to do were three things on tax.
First he had to make sure those with wealth and excess savings - rich individuals and large companies in other words - were taxed to ensure that the cash they hold is distributed into the economy.
Second he had to close the tax gap to tackle the deficit - and in the process create a level playing field for honest business that would encourage investment in people and infrastructure.
Last he had to stimulate the economy, by VAT cuts, NI cuts and more.
And he did none of those things.
William Keegan is somewhat older than me and reckons Osborne the worst Chancellor he's ever see. I recall Chancellor's back to Anthony Barber. I agree with Bill Keegan.
And we're all paying the price for his incompetence.
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What is excess saving, and who determines the quantum of this excess.
Right now it’s easy to determine
We have corporations with £250 billion + in cash
William Keegan is absolutely right when he says that Osborne is the worst Chancellor ever. However I believe that Osborne is not worried about this as the objective is to shrink the state, sell off all our best assets as part of the shock doctrine which the Coaltion is determined to impose on us. I have just returned from a visit to Moscow and Saint Petersburg where the shock doctrine was used after the fall of communism. Now everyone has to pay for healthcare and secondary education and from what I was told by the tour rep the oligarchs are not paying tax to the Russian state, but they are paying their property taxes in the UK ( as if they are a drain on their financial resources!!). Many Russain state assets were plundered by these oligarchs and the same is happening in the UK with privatisation to the corporates. Whist the public and Tory backbenchers are obsessing about pasty and caravan taxes , this other robbery is being conducted without much comment except by people such as you Richard. The mainstream media is unlikely to focus on these issue because it is also obsessed – currently with the Jubilee and the Olympics. The level of real political analysis in this country is so shallow – perhaps most people prefer it this way.
Great comment, Teresa. I’d like to pick up on the fact that we have Russian oligarchs here who pay their property tax – all of £2100 pa in Kensington & Chelsea. It’s rather difficult to hide their mansions in a tax haven. A back-of-fag-packet calculation gives a full land value tax on such property as £300k pa. That compares nicely with the £30k non-dom bribe they currently pay.
I think he only changed the pasty tax. It is now chargeable on hot pasties.
And the caravan tax has only gone from 20% to 5%, which is still a tax where there was not one previously….and who is to say whether he always intended it to be 5% but tried-it-on at 20% first ?
Nice to see the muppet show has remained in Westminster……