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.
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.
ReplyDeleteI 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.