Tuesday, October 06, 2009
George Osborne: necessary evil or nasty party incarnate?
George Osborne today made much play of telling the truth about the country's finances, while claiming that Labour are telling "lies" about it. All sides of the political spectrum agree that the government needs to start balancing the books as we head back into growth after global recession. Does Osborne's speech today set out the answers the country needs?
Public sector pay restraint is going to mean that again those working in the private sector will be able to benefit from a growing economy, while teachers and ordinary civil servants have to wait. Osborne has set the bar too low, with those earning more than £18k subjected to a pay freeze for one year. I doubt these workers will get much in year two from a Tory government. The economy needs public sector workers spending their money just like everyone else. I agree that high earners from the public purse should be subject to restraint, probably for longer than one year.
Tax credit and benefit cuts should be carefully targeted. Labour wants less people claiming incapacity benefit and more working. This needs to be balanced with jobs for the unemployed to go to. I'm unconvinced that Osborne's plan will deliver this part of the deal.
There is little in his speech about what to do with rising tax revenues as the economy recovers. Will these be used to pay for tax cuts or to keep public services running instead of cutting them?
There was plenty of detail from Osborne today. The Tories are setting out their agenda for government. I'm going to cast a very interested eye over the next set of opinion polls to see whether the public accept the Tories somewhat austere plans. My suspicion is that Cameron and Osborne would prefer cuts to taxes and services. This means we may be looking at the start of a very unpopular government.