Thursday, March 22, 2012

Welcome to cloud cuckoo land

"We're going to lift the income tax threshold to £10,000 - that was a major Liberal Democrat commitment at the election, that's our first income tax priority, that's what we have to stick to. The idea that we're going to shift our focus to the wealthiest in the country at a time when everyone's under pressure is just in cloud cuckoo land"
Danny Alexander, 31 July 2011, Andrew Marr Show

Another day, another Lib Dem Let Down.

This budget has fast turned into a political disaster for the Tories and the Liberal Democrats, as the rampant leaking and very public negotiations over the policy direction have meant that virtually all the major headline policies were trailed for weeks in advance - except one. That would be the Granny Tax, slipped out by Osborne as part of a claim that he was simplifying the tax system to help those in retirement and was helping by freezing their tax allowances, but one that will hit millions of pensioners hard. Some have suggested that this was a media management issue - it would have been easier to handle if the traditional budget purdah had held, but I think it would still have made for appallingly negative headlines, but perhaps a day or so later..

Osborne is normally portrayed as a surefooted politician with good instincts, but this policy shift is a major misjudgement, both practically and politically. Practically, taking money away from pensioners to add to the well-heeled high earners is morally wrong, but this is politically suicidal as well. Thursday's press coverage is not what Osborne would have wanted to see. The FT and Times are neutral on the subject, but all the other major titles - particularly the Sun, Daily Mail and Telegraph - have come out with headlines giving the Chancellor a thorough kicking.

That won't be the end of the impact, however. Pensioners have learnt the habit of turning out to vote and I suspect that the Liberal Democrats in particular will feel their wrath, fulfilling their role as lightning conductors for the Conservatives on May 3rd.

This was definitely a budget for the millionaires not the millions.

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