Osborne — the Master Strategist?

George Osborne – Britain’s Chancellor of the Exchequer – is meant to be a fine political strategist, the Conservative’s super-hero, all realist and machine politician. Conservative commentator Tim Montgomerie described him once as the coalition government’s “chief executive”, who not only is masterminding the coalition’s deficit and growth strategy but is overseeing the Conservative’s election strategy, he argued.

In an article in The Times, Montgomerie noted that sources had told him that at roundtable meetings involving senior Conservatives and Liberal Democrats heads rise and look to him” and not Prime Minister David Cameron “when anyone makes a controversial statement.”

Well, if Osborne is the man the Conservatives are relying on to maneuver them into a position to secure a majority at the next election, they may find they are banking on the wrong man.

In the past few weeks, he has managed to anger pensioners and the elderly with his so-called “granny tax” and provoke outrage with his proposal to cap how much money the rich can give to charity. It is to say the least pretty extraordinary to have united the charity world in one huge rebellion – and, of course, all those charities will grouse to all their donors about the meanness of the government. The cap would also seem to have undermined totally Cameron’s Big Idea of the “Great Society.”

As master strategist Osborne has been pushing recently a series of measures and airing proposals that seem to be anything but sure-footed and several seem designed to irritate the hell out of natural Conservative voters, an odd way of going about building an electoral majority.

Even small strategies aimed at wrong-footing the Labour Opposition have backfired – this week his wheeze of suggesting that all Cabinet ministers should reveal their tax details backfired when Labour endorsed the idea to the horror of many Conservative politicians and the Tory press.

As Graeme Archer noted in the Daily Telegraph, before long every candidate for public office will be pressured to disclose their tax arrangements. “No one who builds a business and arranges their tax accordingly will want to face the scrutiny of standing for public office, or the ordure entailed in making money and legally reducing the tax you pay on it,” he writes.

So when will Osborne start losing his reputation of being a master strategist?

 

Yes, Precisely

 More Budget woes for Britain’s Coalition government. Tory MP David Ruffley on the BBC today warned that “pensioners are going to be bellyaching about this for a while. The grey vote is powerful and [Osborne] could have thought better of it and found the money elsewhere.”

According to the Daily Mail, the Chancellor, George Osborne, blames the Liberal Democrats for the row over the “granny tax” on the grounds that if they hadn’t leaked all the popular measures before the Budget, then no one would have paid much attention to the phasing out of the age-related tax allowance. Keep telling yourself that George.

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So Has Plan A Been Ditched?

The credit rating agencies are likely to fall for it – Fitch has warned that the UK may lose its triple A rating in the next two years – but does Goerge Osborne’s Budget make much sense, if he’s wedded, as he says he is, to his Plan A of stiff public spending cuts?

There are some substantial giveaways in the Budget – the top rate of tax cut from 50 percent to 45 percent, an increase in the personal tax allowance, and the raising of the income ceiling  on child benefit, etc. And, of course, there’s the cut in corporation tax.

The Chancellor says this is a Budget on the side of aspiration and enterprise. Certainly, to attract foreign business to the UK, and to encourage domestic firms to remain located in the country, the corporation tax reduction is a good idea. The cut in the top rate of tax is likely also to encourage the super-wealthy to remain.

But how is this to be paid for? The Chancellor talked vaguely about clawing back another 10 billion pounds in welfare benefit cuts annually but absolutely no details were provided.

One slice the of the population that doesn’t come out of this well is the elderly. The phasing out of the age related allowance for pensioners is going to hit them. I can’t quite see the sense of this.

The UK is facing already a pension time-bomb, as other developed countries are too. UK pensioners and those close to pension age have been hard hit by low interest and annuity rates since the financial crash and now they will lose out on the phasing out of the age related allowance. In short, the government is aggravating the problem that will come with the greying of the country.

So, is this Plan A-? I am not sure the Chancellor has done enough to encourage growth and enterprise with this Budget – a growth that can bring in more tax revenues to cover the giveaways. And neither am I sure this Budget will be as tax neutral over five years as the Chancellor claims it will.

Part 2 – The Silliness of Simon Heffer

Part 2: The Silliness of Simon Heffer

On 30th July in a Daily Telegraph column ostensibly criticising Chancellor George Osborne for arguing that any Trident replacement should come out of Ministry of Defence funds we got these gems from Simon:

“We live in a world whose massive instability seems to have passed the Prime Minister by.”

“Dave (by this Simon means Prime Minister Cameron) so obsessed is he with image management that real issues of governance are pushed to the margins.”

“If there is the political will, the money can be found to maintain the defence of the realm. As I have argued before, end the overseas aid budget, which is a pointless, socialist waste of money at £7 billion a year.”

As I asked in an earlier blog posting on Simon, are these really the comments one expects from a serious commentator writing for a supposedly serious daily newspaper?

You may or may not agree with Cameron’s recent criticisms of Israel and Pakistan or think they should have been made so publicly (I for one think the Prime Minister was right in the content of what he said and how and where he made his remarks), but does anyone really believe that the Prime Minister is unaware that we live in a dangerous World – always have actually – and that instability from elsewhere threatens?

When commenting on the Coalition, Simon likes to press the idea that the Prime Minister is just a PR man focused on image solely. What he ignores is how radical this government is planning to be – and radical in a lot of Conservative/Libertarian ways. Nothing less than a radical reform of the state and the relationship between the state and the public is being aimed for, a point emphasized last week by the Economist, which noted that “it is shaping up to be an ambitious administration.”

According to Simon, the Prime Minister is not interested in “real issues of governance” but let’s look at the short record so far. The Coalition has introduced an austerity package aimed at ending the country’s fiscal deficit that could see most government departments facing cuts of up to 40 percent – it is a spending reduction package that shames other European governments who claim they too are intent on putting the public books in good order.

But the Coalition is not stopping there. Coalition ministers intend to seize the opportunity to reshape the State and are proposing truly radical changes to NHS management, the Welfare system, schools, and the relationship between the police and the public. The Coalition is already acting to push back on the astonishing civil rights encroachments of the Blair and Brown governments. As the Economist – hardly a lefty or Lib Dem publication – argued “the historic nature of the coalition government itself is now less interesting than its domestic politics.”

So much for the Simon claim that the Prime Minister is pushing to the margins real issues of governance!

Does Simon think that he is writing fine commentary when he sneers and insults and misrepresents and tries to make out that Cameron and his ministers are ignorant and immature. Is this how Heffer’s mentor T.E. Utley wrote? Utley was an ideological Conservative but in his columns he was not bombastic and stuck to the facts and he would never have demeaned a Prime Minister by referring to them in a condescending manner by their first name.

So what does Simon think he is doing? And why he is doing what he is? Well, his chums on the right of the Conservative Party no doubt are egging him on. They, of course, are unable to accept any compromises to their narrow Conservatism. As far as they are concerned Britain should have no mass immigration – European Union citizens included – and Conservatives should not share government power. They want an old Britain that stands alone, proud, free and brave, etc. That fits in well with the kind of Britain Simon would like – the England of Trollope, where the Celtic fringes and working class people knew their places.

And so to be brave and free and proud we need an independent nuclear deterrent and shouldn’t be wasting money on some natives overseas. And according to them the nuclear replacement should not come out of defence funds but the government reserve. Well, boys, I have news for you – there isn’t a government reserve, the coffers are empty!

Britain’s nuclear deterrent isn’t and never will be independent – the Americans would have to agree before we fired it! And which country are we going to shoot at? The Russians? We knock out a couple of their cities and they knock out Britain lock, stock and barrel. Terrorists who sneak in a suitcase bomb? Iran has a far more important target than the U.K. – Israel.

I can well understand why Reagan thought all the generals talking about MAD were mad.

Back to Simon, briefly. The days when Britain’s overseas budget went straight into the pockets of Third World dictators are kind of over, Simon. Aid is far more targeted and monitored – although more monitoring is needed – and aid is starting to get more results-oriented, something Andrew Mitchell, the International Development Secretary, is keen to increase.

Yes, money to India and China should cease now but a lot of good can come from that aid budget in Africa and less developed countries, helping to ease the instability Simon worries about so much and encouraging economic development and that helps to ease the immigration pressures on us. Simon, maybe you should read less Trollope and start reading more studies and books on economic development, aid mechanics and even brush-up on what is actually happening in Africa.

The Cuts That Dare Not Speak Their Name

British Prime Minister Gordon Brown is likely to announce tomorrow the long-awaited general election. But in the run-up none of the major parties are prepared to tell the truth about the scale of the cuts in public expenditure that will be needed to stave off national bankruptcy. All the parties are careful to avoid announcing any numbers – how much will have to be cut from public spending, how many jobs will have to be lost from Britain’s bloated public sector, how high taxes may have to be raised and what the balance should be between spending cuts and tax hikes, if Britain is going to secure the economic growth it needs to get out from under mounting debts.

Cutting public expenditure substantially is the only way forward. But where and by how much? Labour politicians on the whole avoid the word “cuts” and prefer to talk about public investment. Conservative leader David Cameron and Osborne have followed their Labour counterparts and promised to ring-fence health care, defense and Britain’s overseas aid budget. In fact, Labour goes even further and the Prime Minister has insisted that all “front-line” services – education, the National Health Service and the police – will be unaffected, if he is re-elected.

Read my full take on the British election and the economy at the Daily Caller.