19 Mar 2014

Budget 2014 – it’s all politics

“It is completely political,” someone with knowledge of the budget told me. The “surprise” being mooted this morning sounds like it could be a crowd-pleasing Tory pledge on personal taxation for 2015, not necessarily a costed coalition commitment.

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The Lib Dems are signed up for the welfare cap on non-automatic stabiliser elements of the welfare budget. That could make uncomfortable reading for some Lib Dems who don’t see the world as Danny Alexander does. They will have the zero tax threshold hike to console them but the distributional graph for the latest lift there might not look like a super progressive use of scarce cash.

As has been well trailed, the chancellor will do more to “re-balance” the economy. Friends say he had a “lightbulb” moment on his China trip when he realised that for all his earlier talk of everything humming along nicely, in fact the economy was showing signs of the wrong type of growth, not re-balancing and exports not being at the centre of the picture.

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2 reader comments

  1. Philip says:

    When was a George Osborne budget not political? And if anyone seriously thinks this budget will rebalance the economy in fact as opposed to words, they’re wearing rose-tinted specs.

  2. Andrew Dundas says:

    Pension changes were precipitated not by politics but by the perverse effect of the Lisbon Treaty.

    Part of that Treaty is the EU Charter of Fundamental Rights that includes a ‘No discrimination’ section. Which ‘Right’ the TEST-Achat organisation in the Belgium has successfully used to destroy defined contribution pension schemes that provide annuities based on the life expectancies of pensioners.

    As you know, women usually live longer than men, so they used to get smaller annuity payments than men – reflecting their higher risk of receiving their pension for three more years than men. Short of agreeing an amendment to the Lisbon Treaty, the only way to overturn that silly judgement is to remove the obligation to buy an annuity at all.

    Don’t worry about irresponsible pensioners blowing it all on a Lamborghini because this isn’t a ‘new’ scheme. The USA 401(k) has been doing the same for 20+ years, and it works for them.

    Emboldened by TEST-Achat case, I’m launching a campaign against Age Discrimination in financial services. That’ll change things for pensioners if the Court confirms its own precedent !!

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