An irrelevant budget
Jim O’Neill reviews the UK Chancellor’s budget, and looks forward to the Finance Secretary using the powers of the Scottish Parliament to actually make a difference, for once.
The Autumn Budget of 2017 is clear proof, if proof were needed, of the failure of the Tories’ economic strategy over the past seven years, and of the fact that they have neither the economic know-how, nor the courage, to move on to a different path.
Faced with the worst economic growth outlook in living memory, and the possibility of two decades of pay decline, Spreadsheet Phil’s response is “let’s build lots of driverless cars.” Phil, no-one will be able to afford such fripperies. We will all be trying to work out how to pay for basic needs such as bread and milk!
Apart from the respected economists who write for the Daily Mail (Prop Lord Rothermere from his “tax efficient” bases in the Bahamas and elsewhere) and the Daily Express (Prop Dirty Desmond), and no I can’t name them either, every respected economist, from the Institute for Fiscal Studies on, has said that this budget only extends austerity, but has no plan to reverse the downward trend of GB plc.
So, let’s look at some of the proposals. The highlight(?) was the removal of stamp duty on first time buyers’ houses. The pretty unanimous judgement on this is that it will do little to solve the housing crisis but a lot for the housebuilders’ profits as it will inevitable drive prices up. Indeed, the £44bn he has set aside for new homes is little more than a drop in the ocean.
Two sectors were particularly noisy before the budget, education and health, who identified clearly the amount needed to stand still, and arrest the decline. Both were given substantially less than needed. Indeed, can it be a coincidence that Phil, who tried to joke his way through the budget, gave £350 million extra for winter pressures, a number that Boris Johnston and Michael Gove, looking on, might recognise as the figure they promised would accrue to the Health Service each week as a result of Brexit?
And his scraps from the table for Scotland, allegedly forced on him by the new Scottish Tory MPs, included transferable oil tax credits and a refund of VAT for Police and Fire and Rescue Scotland, an issue that both Labour and the SNP had been campaigning on since before the last election. I am sure,too, that Universal Credit recipients are panting with gratitude for the minor changes to waiting time and housing benefit advances, while totally ignoring the devastating welfare cuts still to come.
Meanwhile, he set aside £3bn for Brexit to keep the slavering hordes of ultra Brexiteers in check for now. He made no reference, however, to the large sums, in excess of £45bn, that the Cabinet have now agreed to pay Brussels for the privilege of leaving.
Mind you, we in Scotland have an extended period of budget pain. Now that Derek Mackay knows his consequentials, both revenue and capital, he can draw up his plans to kickstart the Scottish economy. He faces similar pressures both in education, where one union is already taking strike action, and in health, where European doctors and nurses are abandoning our shores, health boards are reporting substantial deficits, and facilities are mothballed because boards can’t afford to staff them. And that is not to mention local authorities, who have lost thousands of valued staff over the past ten years and have seen key services cut. And they now find that the much vaunted Health and Social Care Partnerships are descending into deficit also.
Meanwhile, we still have our own housing crisis to deal with, and we need a boost for our own manufacturing industries, rather than, for instance, importing Chinese steel for the Queensferry Crossing.
So, we now wait with bated breath to see whether the Finance Secretary will use all of the tools in his locker, including progressive tax, to present a budget that will begin to restore Scotland to the economic power it once was. Go on, Derek. I dare you.