Labour haven’t quite worked out what their line is on the perennially popular idea of letting people keep more of their own money.
“We wouldn’t reverse” versus “ideological tax cuts.”
Corbyn didn’t really know how to respond yesterday and just blurted out his usual slogans and soundbites…
The Treasury will be happy with the coverage the Chancellor got this morning. So far the budget hasn’t unravelled, because the ambiguity of the budget has meant the Labour counter attack and Corbyn’s irrelevant response are getting no traction. The commentariat is unclear if it really signals the end of austerity or not, it certainly signalled a slowing in the urgency of the effort to close the deficit…
Hammond appears to have avoided a Halloween horror show with several popular announcements including a freeze on beer, cider and spirits duty and bringing the income tax threshold rise forward to next April. However, fiscal hawks are alarmed at the rate of fiscal expansion. Here’s what the wonks made of it…
The Centre for Policy Studies is happy for now but calls for a more radical Budget post-Brexit:
“The focus on the end of austerity, giving hard working people more money in their pockets through tax cuts for 32 million people, and the largest ever increase in NHS spending without any rise in personal tax are hugely welcome. However we hope the Government pushes a more radical agenda that delivers for ordinary people once the Brexit deal is complete.”
The TaxPayers’ Alliance is broadly positive but calls for more serious tax reform:
“Increases in the personal allowance and higher rate income tax thresholds, with freezes to taxes on beer, cider, fuel and short-haul flights, will give much-needed breathing space to hard-pressed taxpayers. That said, the tax burden overall will be still be increasing. And to truly seize the opportunities afforded by Brexit, we should be looking at a much more serious and overdue reform of the tax code.”
The Adam Smith Institute is significantly less impressed, calling it a “botched budget”:
“What the Chancellor gave with one hand though, he took with the other as he hit firms large and small that make capital losses by restricting their exemptions—meaning less risk taking, less profit and fewer economic dividends… A digital revenue tax—lifted straight from the Corbynite playbook—will punish the millions of people who shop online and use online services every day.”
The Institute of Economic Affairs also takes aim at the “Fiddly Budget”:
“More broadly, it was a Budget littered with spending commitments across the board. In an attempt to signal the ‘end of austerity’, it appears this government has given up on deficit elimination… Fiscal responsibility is being sidelined, giving way to short-term giveaways and unaffordable pledges.”
As the Office for Budget Responsibility points out, the Government would have been on course to balance the books by 2023 with the unexpected fiscal windfall this year, but has spent it all already:
“Buoyant tax receipts and an improved outlook for employment have delivered the Government a significant fiscal windfall since March, sufficient to deliver its objective of a balanced budget by 2025. But this had already been swallowed up by the Prime Minister’s promise of more money for the NHS in June, to which the Chancellor has added a further near-term tax and spending giveaway. This leaves the medium-term outlook for government borrowing little changed since March.”
Balancing the budget was meant to be this Government’s fiscal priority, yet this Budget puts it firmly on the back burner…
Big Phil spent over a minute making jokes about his mandatory business rates relief for public lavatories. There are some real groaners here…
The Commons erupts with cheers as Liz Truss can’t find a seat on the front bench for the Budget Statement and ends up sitting on Sajid Javid’s knee. Not the first time she’s sat on another MP’s lap…
The lady in red, Liz Truss, is wearing a £245 “Forever dress” from British designer, Karen Millen. The rest of the Treasury team are in dark grey suits.
Will this be Hammond’s last budget?
Charities are set to receive a £1.7 million funding boost in next week’s Budget to help fight against rising anti-Semitism by educating students about the horrors of the Holocaust. The funding will enable student visits to Bergen-Belsen concentration camp as well as supporting visits from Holocaust survivors to schools to enable students to hear first-hand testimonies.
The Community Security Trust reported a record-high 1,382 incidents of anti-Semitism in the UK last year while two in five British Jews have said they would “seriously consider” emigrating if Jeremy Corbyn became Prime Minister. At least one party is taking the problem seriously…
It’s set to be All Hammond’s Eve next month as Philip Hammond has decided to go for October 29th as the date for this year’s Budget – just two days before Halloween. He’ll be hoping the voters don’t get spooked…
Guido can already imagine the headlines. Will it be a Halloween Horror Show or Death to Taxes?
Spreadsheet Phil delivers a surprise box office finale to the Spring Statement with his blistering reply to John McDonnell. The Chancellor made the point McDonnell is still refusing to apologise to Esther McVey over his infamous “lynch” comments, and also picked him up over Russia Today. Phil ya boots…
Labour MPs have voted against the proposed cut in stamp duty, despite backing it in their manifesto just six months ago. Overall, 228 Labour MPs voted against the second reading of the Finance Bill which includes the tax cut first outlined in the Budget. Shadow Treasury minister Jonathan Reynolds admitted this “was a Labour policy included in our manifesto for the June 2017 general election”, yet Labour MPs queued up to oppose the tax cut: Alison McGovern said “it is simply the wrong policy priority’”, Grahame Morris whinged: “legitimate concerns have been expressed about the stamp duty proposals, which are feared to be the wrong solution”. And Stella Creasy said the stamp duty cut would: “do little for [her] constituents.” Student fees, stamp duty – is there anything Labour told voters at the election that still stands?
John McDonnell was again unable to say how much Labour’s spending plans would cost Britain in two further shambolic interviews this morning. Asked on both the Today programme and 5 Live how much extra would be spent on servicing government debt under Labour, a rattled McDonnell was eight times unable to give a figure. He snapped:
“This is a trite form of journalism, that’s why we have iPads and advisors… It’s minimal… I’m telling you, it pays for itself, it pays for itself.”
Alas the Shadow Chancellor was unable to explain how borrowing would “pay for itself”. Someone get him that iPad for the next media round…
Jezza looking a little stressed as he struggled to come up with a response to the Budget…
Some real groaners…
Hammond’s abolition of stamp duty for first time buyers might be a tax cut, but it doesn’t go anything like as far as the Institute of Economic Affairs, Adam Smith Institute and Taxpayers’ Alliance were hoping (they wanted it abolished for everyone). This line from the OBR is a tough one for the government to explain: the policy will increase house prices by 0.3%.
Given the OBR’s forecasting accuracy this is a rounding error that is less than the cash value of the stamp duty cut…
The Chancellor now stuck in traffic on Whitehall…
Tory MPs considered the pre-conference promise of 5,000 new homes a year derisory to the point of being insulting to voters. Good news is coming in the Budget, though. Number 10 chief of staff Gavin Barwell says in a rare tweet that Hammond is going to do “more” next week:
With exception of #housing bubble just before the crash, housebuilding now at highest level for a generation. Real progress but more to do
— Gavin Barwell (@GavinBarwell) November 16, 2017
And Sajid Javid adds this morning that the Chancellor is going to show a Churchillian drive to deliver “real action” on house building:
“Faced with the crisis of the Second World War, Churchill demanded “action this day” so the country could rise to the challenge. And, faced with an unprecedented housing crisis, that’s what you’re going to get from this government. Real action, day after day, week after week, to give this country a housing market that works for everyone. In next week’s Budget you’ll see just how seriously we take this challenge, just how hard we’re willing to fight to get Britain building.”
Right Phil?
Anyone following the arguments will have heard the Remainers’ refrain that the UK has gone from having the fastest GDP growth in the G7 to the slowest GDP growth in the G7. That has never rung true to Guido. The latest IMF forecast – which should still be treated with scepticism – puts UK GDP smack bang in the middle of the G7 growth table.[…] Read the rest
Fiona Hill says…
“We failed.”
