We don’t want to all be in it together

April 5, 2012 9:39 am

Nearly two weeks on and the Budget is still niggling. George Osborne doesn’t just walk out into the political motorway without looking left and right and Britain doesn’t spend weeks debating pasties as if we’re all in Carry On Class War. And yet, here we are and the only explanation I can come up with is the 50 per cent tax rate and its links back into the debate about welfare and “responsibility”.

The fiscal arguments for the 50p rate are as slight as those for the household benefit cap: on the OBR scoring, neither of them add up to half of one per cent of Britain’s deficit this year. Both have been justified by the idea that solidarity runs from the very richest to those on the furthest periphery of society: when everyone is suffering from say, higher VAT and lower tax credits, these measures are supposed to show that no one has escaped without a bit of pain.

Except the political debate hasn’t been dominated by what the majority are losing in higher taxes and lower spending – it has been dominated precisely by the policies that have no impact on the majority. Instead, we have already paid an extra £7 billion a year in tax because of George Osborne’s policy decisions and done so while giving him a better rating on the economy than his Labour opponents. The extra taxes announced in this Budget are a shadow of those announced earlier in the Coalition’s lifetime and no one will get a smaller cheque this month than they did last. Part of the explanation for the Treasury’s poor tactics in announcing them must have been an assumption that, looking at that scorecard, they’ve persuaded the country to swallow much more bitter tasting medicine and without complaint.

Cross-breeding allusions we could say this is the curious case of the goose that didn’t hiss when it was plucked: while benefit caps and 50p rates produced cacophonies, tax rises have been met with relative silence. However badly people thought the Government was doing it, a consistent 55 to 60 per cent of us thought that cutting spending to reduce the deficit was “necessary” and I suspect a similar score would be found if a similar question made reference to the tax rises that took place in 2011.

The big change this month was cutting the 50p rate and no one on the Government side was able to make the case that reducing the 50p rate was an urgent necessity, even if they could argue it was in the UK’s long term economic interests. Outside the fortifications of that necessity argument, George Osborne suddenly looked exposed and vulnerable.

While the fiscal cases are marginal, this does suggest that there might be a more interesting political case for both the 50p rate and the benefit cap policies. They aren’t proof that we are all in this together, they are proof that we are still in charge. The we here is the bulk of the population on five figure salaries and not dependent on benefits. Despite the forced choices of a global economy and a national debt, this is still our show. And what could better prove who is in charge than demonstrating the ability to bloody mindedly pursue a decision, creating a huge outcry, even when it doesn’t raise us a great deal of money?

That’s not a glorious justification for either policy. But when the world economy makes people feel they aren’t in control, maybe proofs of this kind are needed for the majority to tolerate enough income inequality for some growth and enough tax for some social justice. And by suggesting that we are not, in fact, in charge, George Osborne’s Budget has let us off the hook: if we aren’t running this place, we can moan about pasties and not feel the slightest bit conflicted about it.

This post was originally published on thecentreground.com

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