Friday, October 5, 2007

Osbourne's package will disappoint

7.10am today. Woken up with an electric cattle prod ruthlessly applied to my cojones...also known as a GMTV appearance by Edwina Currie, my all-time lift breakdown companion from hell. Trite, over-simplistic, ridiculously partisan, smug, arrogant, pig-headed....the list is endless. I resorted to the old "Hey Jude" humming trick as wifey wanted to listen to her, for some reason. I thought La Currie had been safely buried at midnight on a FiveLive phone-in programme. How wrong I was.

Anyway, the reason for GMTV drafting in the Great Curried Egg was to comment on the current political situation.

The Tory bouncette is not because of the Cameron speech. It's too recent. It is because of the Osbourne speech on Monday. Little Georgie has had a good week. I have revised my view of him, especially after his Question Time appearance last night (Ming was also superb, mainly because he continues to shamelessly milk the applause for being old and an Olympian).

Politically in the short-term, the Monday Osbourne speech was a master-stroke. However, in the medium to long-term his little package of tax measures (the fiscal equivalent of scratching a pig's back when compared to our 16p standard rate of income tax - the three Osbourne measures equate to less than 0.5% of government spending) are a damp-squib waiting to go off. Never mind Labour warning of a "search and destroy" mission on them. No searching is required.

Take the inheritance tax proposal first. The LibDems already announced, with typical shyness, virtually the same measure two weeks ago. We proposed to increase the threshold to £500,000. In fact, that takes most of the affected people out of inheritance tax anyway. (The Evening Standard says that the average price of a house in the highest priced area in the country, London, is £338,950) The area from £500,000 to £1 Million is the much smaller tail of the distributive dragon, and, far from a "Robin Hood" measure when coupled with the non-doms proposal, represents what Polly Toynbee called promising "to steal from the outrageously, stratospherically rich and redistribut(ing) it to the already very-very rich."

The tax on non-domiciles seems very attractive until you think about it for more than two milliseconds. About 135,000 of the 150,000 non-doms which Osbourne factored into his maths either don't exist or wouldn't be able to afford staying here when the tax comes in. Most of the non-doms are nurses, low paid city workers etc, not Roman Abramovich. Osbourne says that the £25,000 tax will release the highly rich non-doms from further fiscal scrutiny under the Tories. That's a joke. £25,000 is like one penny to a billionaire. The measure would put at risk further measures on the non-doms (such as the constraints on capital gains tax avoidance proposed by Vince Cable two weeks ago - I know we are so boring with our policy announcements, aren't we?) and put at risk £4 billion of tax already collected from them each year.

The change in the stamp duty next. Brilliant - but how will it be paid for? We've just seen that the non-doms measure is a joke which would bring in about £1 billion less than Osbourne estimates. His other brainwave to pay for this little package is to clamp down on incapacity benefit claimants. Those naughty people with doctors' notes. Ah yes, the people Peter Lilley tried hard to squeeze as Secretary of State for Social Security from 1992 to 1997 - and failed.

Back to the politics of this. Although these measures seem snazzy in a Daily Express sort of way, they really have nothing to do with the vast majority of people. The bribe to be "given" to married couples maybe does, if anyone can work out who it applies to (and, anyway, it would be not paid for in the ways outlined above). The problem is that this is the Tory party returning to the old core Daily Express vote.

So, enthusiasm for the Osbourne package will soon evaporate.

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