Sunday, 8 December 2013

Labour needs to worry after Autumn Statement

 It is clear that there are huge differences between what Osborne and the rest of his coalition cronies purport to desire, and  their true aims. A fall in unemployment will speed up a rise in interest rates, so making many "mortgages seriously unaffordable", and were this to happen just before the election, even traditional Tory voters may have second thoughts. Government policy will, therefore, not be focusing on job creation, despite claims to the contrary. More ingenuity comes with politicians since 2010 saying how they didn`t enter politics "to make cuts"; this is yet more economy with the truth for if they are Tories, reducing the government`s role in society, and its commitment to health, welfare and education by cutting grants, benefits and jobs, forms a major portion of their political ideology.Labour should be working harder to expose such duplicity!
      There is more work for Labour in the field of taxation; although the "link between economic growth and personal prosperity" may be broken, Osborne is clearly gambling on his tax reforms winning the votes of the "fabled middle classes".The increase in personal allowance means that, since becoming chancellor, he has increased the "number of 40% taxpayers from three million to nearly four million". Whilst most of these will undoubtedly be worse off financially as a consequence of coalition policies, there is something of a feel-good factor associated with attaining this "career milestone", and this could still persuade many voters to keep faith with the Tories. What is even more worrying for Labour is that the resulting increased revenue from income tax will enable the Tories to "bribe" voters in 2104, with perhaps pledges to increase the minimum wage or employ thousands more nurses, populist policies aimed at increasing "fairness", which Labour should have promised months ago.
 The Autumn Statement was clearly more political than economic, and could yet prove a decisive factor in the 2015 election result. The Tories may be taking government and education back to the 1940s, but until voters can be sure Labour would not do the same, the election is still in the balance.

1 comment:

  1. You obviously have a greater understanding of economics than the politicians would admit to. As you point out, when the Chancellor has increased the basic income tax allowance he has reduced the point at which higher rate tax is payable. This has balanced out any gain for people who were previously not paying higher rate tax, if their income was just below the previous 40% tax band at the time.
    I do not understand why no Labour politician has pointed this out to the voter (unless I missed it). Obviously, it has helped lower paid people (an increasing number with low pay and zero-hour contracts etc), who need help the most and I support that. However, I suspect that the reason for increasing the basic tax rate is to help win votes from general voters, many of whom do not realize they have been duped yet again.