by Sam Bright
Ed Miliband must have woken up with with a sense of foreboding today. It is a challenging task for any Leader of the Opposition: to respond to a highly-detailed, hour-long speech by a Chancellor who has been in possession of all the facts and figures for many weeks – and has long since decided what he is going to announce. The man opposite, on the other hand, has merely moments, following that speech, in which to compose his thoughts and decide how to respond to what he has heard.
Admittedly, that might be overstating it. Mr Miliband will have known for some time the thrust of the majority of the featured measures, as evidenced by his reading out of a largely pre-prepared response. One advantage of coalition government is that laundry tends to be aired in public, providing entertainment (and information) for journalists, commentators, and the Official Opposition. But in essence, Mr Miliband faces the same challenge as any with a political interest in the budget: how to respond.
It is doubtless the role of the Government to govern, and the Opposition to oppose. Hence the support given by both Liberal Democrats and backbench Conservatives to a budget about which they most surely have some qualms. Similarly, the Labour leader’s impassioned offensive against ‘the Same Old Tories’ – in response to the reduction of the highest band of income tax from 50% to 45% – was both predictable and a necessary feature of our oppositional parliamentary system.
What, however, of the rest of us?
Those of us who find ourselves on the left of the spectrum, natural supporters perhaps of the Labour Party or the ‘pre-coalition’ Lib Dems, may well start from the assumption that a Conservative Chancellor will deliver a budget that is pro-rich, anti-poor, and destined to increase inequality whilst lining the pockets of those featuring on his Christmas card list (as Mr Miliband so eloquently put it today). We see the absence of fuel duty concessions, abolition of tax credits, and ‘simplification’ of age-related income tax tapers as measures that will hit those most in need of a bit of extra cash, whilst the lowering of the higher rate of income tax puts millions of pounds back into the pockets of the tiny proportion of people fortunate enough to be earning more than £150,000 per year.
Those on the right, however, may assume that this budget provides the necessary stimulus for an economy struggling to grow in a difficult global environment, through cutting red tape, incentivising business with reduced corporation tax, and newly announced infrastructural investments. They will point to the greatly increased income tax threshold as evidence that the Chancellor is in fact giving to the poor, and to the closing of Stamp Duty Land Tax avoidance loopholes as evidence that this is indeed a ‘Robin Hood Budget’.
The truth of the matter is that the game of ‘left vs right’ is for chumps. Blindly held ideological positions belong in the 20th Century. What matters is not which party announces a policy, nor whether taxes increase or decrease at the margins, nor whether a budget can be fairly given a folkloric label. The important question, the litmus test that we hold up to any budget, and any policy within that budget, is: does this budget, or this policy, contribute to or detract from our broader political aims?
Take the changes to the higher rate of income tax. There is a great deal of confusion over exactly how much the 50p rate has raised, but it seems clear that it is less than predicted. The reason? Apparently, the wealthy have avoided it by transferring many billions of pounds offshore. The question, as framed, is whether in light of this our political aims are better realized by maintaining that tax band or by removing it.
Mr Osborne’s argument is that this tax has raised very little money and is scaring away the wealthy (or at least, leading them to register their income elsewhere) and so reducing the overall tax intake. Indeed, he appears to believe that reducing the top rate to 45p will actually increase the overall take from income tax.
Mr Miliband’s response, and the uniform response of the Opposition, is to question why at a time when ‘the squeezed middle’ and the poor are feeling the cosh, the Government’s priority in this budget was to reduce income tax for the wealthiest. The knee-jerk nature of this reaction precisely highlights my point.
Political posturing and soaring rhetoric are a lot of fun. In university debating chambers, late-night, whiskey-fuelled discussions, and the West Wing they can be thoroughly entertaining, and a catalyst for engaging people who might otherwise be disconnected from the political process.
But in the realm of serious journalism, commentary and decision-making such instinctive reactions are thoroughly counterproductive. Particularly in the current climate of economic apprehension and financial uncertainty, the role of those involved in the policy and opinion-making processes must be to thoroughly and scientifically test proposals for the soundness of their contributions to our political aims (whatever they might be).
The Opposition, the media, and thinkers at all points on the political spectrum, instead of adopting preconceived, ideological positions on the detailed and technical array of announcements contained in the budget should take a step back, and take a good long look at the facts. This is not an easy task; it requires far more effort than the cheering and booing that we all love so much. I will not pretend for a moment to be sufficiently expert to pronounce on the value of any given budgetary measure – that is a job for others. But that, precisely, is their job: to assess and educate us about the real value of a given measure, not to tell us what we (or they) want or expect to hear.