Master Osborne does it again

Post-war Britian has not been blessed with many talented cabinet ministers. There are some, it is true, who have shown early potential that disappeared when they came to sit around the table at No. 10; there are others whose lack of ability has been no bar to later holding the keys to the front door of that house. The present Chancellor of the Exchequer is certainly not in the first category -- let us pray he is not in the second.

While the flames of summer madness subside, Master Osborne has been cooking up his latest ruse: to end the 50% rate of income tax for those whose income is over £150,000. His argument is that it is 'uncompetitive internationally' - those who 'earn' that amount can pay to avoid tax or go to live elsewhere.

If someone does prefer to pay an accountant to avoid tax rather than hand it back to the government for the upkeep of the welfare state, it might be best if they did leave the country. There will be a few who do that but there will be more who judge that the advantages of living in Britain outweigh the disadvantage of becoming very rich just a bit more slowly. Advantages like having a functioning national health service -- which, if they don't intend to use it directly, they know at least that the private hospitals they plan to visit live off its resources.

Master Osborne's pronouncement is so ill-timed -- so out of step with his Prime Minister's platitudes -- that you wonder how he can get away with it. Isn't it time he was sacked? But, then, Cameron showed his weakness at the very beginning: any in-coming premier wanting to demonstrate his control and please the City (who, remember, considered Osborne a buffoon) would have ditched his university chum straightaway. But he did not and, in the months since, it has seemed at times that Osborne has spoken for the Conservative Party -- a Tory Party so enamoured with the inanities of market libertarians that it has forgotten its own One Nation roots -- rather than his master. The tragedy is not Osborne's lack of talent; it is his grip on power.

Spot the Difference

Browne Review of Higher Education, p. 14 (12th October 2010):

Higher education matters. It helps to create the knowledge, skills and values that underpin a civilised society. ... [It] helps to produce economic growth, which in turn contributes to national prosperity.

Master Osborne's Comprehensive Spending Review, p. 51 (20th October 2010):

[There will be] major reform of the higher education sector to shift a greater proportion of funding from the taxpayer to the individuals who benefit...

And who, pray, benefits? The economy, the nation, civilised society -- the taxpayer, then, according to the Review of Higher Education welcomed by the government only last week. But then, a week is a long time...

Labour's on your side, if you're rich

So, Labour have decided they are against taxing the rich -- sorry, 'middle income families'.

Miliband Junior's performance in his first Prime Minister Questions can at least reassure those who were worried that New Labour might have fallen off its perch and gone to meet its maker. Lord Mandelson can sleep soundly in his satin pjs.

Now, let's accept that there is a flaw in Master Osborne's plan to remove child benefit from higher earners. As has been pointed out ad infinitum (immo, ad nauseam), a household where two earn, say, £40k a year will continue to receive the weekly sum, while a household where one is getting an income over the higher tax threshold will not get it. This is certainly an anomaly: it would obviously be far better for the benefit to be withdrawn from both these examples. The reform does not go far enough but at least it is a start.

It used to be the Tories who insisted that state benefits should not be means tested, as that would penalise, they said, the better off. But, if we are going to protect the welfare state, which was damaged so much under Thatcher and Blair, resources do need to be targeted. And it can surely not be said that a high-earning family is at the sharp end of need, can it?

Clearly, Labour would now disagree. But the logic of their position is more insidious than a spat over child benefit. Young Mr Miliband describes those on the higher rate of income tax as 'middle income families'. If that is the case, then they should surely not be paying the higher rate -- the logic would be to raise the threshold to take those on 'middle incomes' out of the higher bracket. Is the new leader of New Labour really going to call for tax cuts for those who, on any reasonable measure, are rich?

But what is most disappointing is that the opposition has followed the media in concentrating on the minor issue. The more significant and the more worrying of Osborne's announcements was the cap on welfare benefits per 'family'. This begs so many questions, and they're the ones that need to be asked.

On that first performance, Miliband: non satis.