Browse content similar to 21/03/2012. Check below for episodes and series from the same categories and more!
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So, onwards to sunlight and farewell to darkness and debt, led | :00:09. | :00:12. | |
by our fearless guide, the Chancellor of the Exchequer, George | :00:12. | :00:15. | |
Osborne. He claims his budget today charts a path back to prosperity. | :00:15. | :00:20. | |
But is it a plan? Our political editor will be asking why the | :00:20. | :00:24. | |
Chancellor appears to think you incentivise the rich, by giving | :00:24. | :00:28. | |
them money, and incentivise the poor by taking it away, while our | :00:28. | :00:32. | |
economics editor wonders whether the Chancellor is just making a lot | :00:32. | :00:35. | |
of noise to compensate not much possibility of action. The Chief | :00:35. | :00:40. | |
Secretary to the Treasury is here to tell us why he's happy to have | :00:40. | :00:44. | |
George Osborne's speech written on his tomb stone, and his Labour | :00:44. | :00:47. | |
shadow to tell him why he's a disgrace. | :00:47. | :00:51. | |
The boss of the world's biggest advertising, we hope, is here to | :00:51. | :00:55. | |
join a head of an investment fund that looks after �47 billion. The | :00:55. | :01:01. | |
editors of the Times, the Financial Times and the London Evening | :01:01. | :01:04. | |
Standard are here too. They have seen a few budgets between them, we | :01:05. | :01:14. | |
:01:15. | :01:19. | ||
convene our political panel to pass Maybe it was entable that this was | :01:19. | :01:28. | |
a political -- inevitable this was was a budget for differences. | :01:28. | :01:32. | |
The very rich are having their income tax cut, pensioners will pay | :01:32. | :01:37. | |
more tax, everyone has their tax threshold raised and benefits will | :01:37. | :01:42. | |
also be cut, the effect, a little indistinct. Let's hear what our | :01:42. | :01:45. | |
economics and political editor hear about it. | :01:45. | :01:50. | |
What is the stand out feature? What is the stand out feature? | :01:50. | :01:53. | |
has got rid of the 50p rate. stand-up feature is whether they | :01:53. | :01:56. | |
can prove the measures they are bringing in, heavy rates on stamp | :01:56. | :02:00. | |
duty, closing all sorts of well taxes, whether they will bring in | :02:01. | :02:07. | |
enough so at the next election 50p doesn't run and run as a big | :02:07. | :02:10. | |
givaway. For you? The Business Secretary, Vince Cable, | :02:10. | :02:14. | |
a few weeks ago, called on the Government to come up with some | :02:14. | :02:19. | |
sort of coherent growth plan. Is this it? A lot of the measures | :02:19. | :02:22. | |
in this budget are designed to stimulate growth, particularly the | :02:22. | :02:30. | |
tax pleasures. But the overall impact is -- tax measures. But the | :02:30. | :02:34. | |
overall impact is minimal, we will remember the roads, the planning | :02:34. | :02:37. | |
the railways, they are long-term, not short-term. | :02:37. | :02:41. | |
Let's first get a little more detail from David Grossman, who has | :02:41. | :02:47. | |
had the pleasure of spending the day in what fell from Mr Osborne's | :02:47. | :02:50. | |
lips. The only people at Westminster this | :02:50. | :02:53. | |
morning who didn't know exactly what was in the budget, probably | :02:53. | :02:57. | |
didn't much care, they were here for the history and the views. It | :02:57. | :03:02. | |
was a shame, plenty would view today's budget as historic. There | :03:02. | :03:05. | |
was certainly plenty to write home about. Not, of course, that anybody | :03:05. | :03:09. | |
needed to write home, they could have simply read about it in this | :03:09. | :03:13. | |
morning's papers. This budget, the subject of unprecedented pre- | :03:13. | :03:18. | |
briefing. Why? It is simple, the budget was the result of protracted | :03:18. | :03:21. | |
and difficult political negotiation between the coalition partners, | :03:21. | :03:24. | |
each side wanted to make sure their success stories were reflected in | :03:24. | :03:31. | |
the coverage. For once we were pretty sure what | :03:32. | :03:35. | |
was in the Chancellor's red box. The Chancellor didn't want | :03:35. | :03:39. | |
tomorrow's headlines for this budget to be "tax breaks for the | :03:39. | :03:44. | |
rich". First he laid out extensive measures to cut tax dodging. Under | :03:44. | :03:47. | |
the last Government it was the boast of some high earners that | :03:47. | :03:51. | |
with the help of their accountants, they were paying less in tax than | :03:51. | :03:58. | |
their lean cleaners. I regard tax evasion, and aggressive tax | :03:58. | :04:03. | |
avoidance as morally repugnant. a start, stamp duty on expensive | :04:03. | :04:10. | |
properties will go up from tonight .% on houses worth more than �2 | :04:10. | :04:15. | |
million. Not quite a mansion tax but close to it. There will also be | :04:15. | :04:18. | |
a closing of the loophole where rich individuals can use a foreign | :04:18. | :04:22. | |
company to buy a house, if they want to do this in the future, they | :04:22. | :04:28. | |
will have to pay a stamp duty charge of 15%. | :04:28. | :04:32. | |
Unlimited tax relief will go, in essence, in the future someone will | :04:32. | :04:37. | |
only be able to offset 25% of their income. And, coming in, is a new | :04:37. | :04:43. | |
general anti-tax avoidance rule. In short, tax dodges will have to be | :04:43. | :04:47. | |
cleared with HMRC, in advance, who, might just close the loophole | :04:47. | :04:52. | |
instead of allowing it. The Lib Dems looked pleased at all of this, | :04:52. | :04:56. | |
they had insisted on these measures in return for cutting the 50p top | :04:56. | :05:01. | |
rate of income tax for people earning above �150,000 a year. The | :05:01. | :05:05. | |
Chancellor said it raised little, and sent the wrong message. | :05:05. | :05:10. | |
raises, at most, a fraction of what we were told, and may raise nothing | :05:10. | :05:17. | |
at all. So from April next year, the top rate of tax will be 45p. | :05:17. | :05:23. | |
Mr Deputy Speaker, no Chancellor can justify a tax rate that damages | :05:23. | :05:29. | |
our economy and raises next to nothing, it is as simple as that. | :05:29. | :05:34. | |
Thanks to the other new taxes on the rich, I have announced today, | :05:34. | :05:39. | |
we will be getting five-times more money each and every year from the | :05:39. | :05:43. | |
wealthiest in our society. What about the people who aren't | :05:43. | :05:47. | |
superwealthyo with offshore companies to complicate their tax | :05:47. | :05:55. | |
affairs? Well, the big headline is the rise in the tax-free allowance | :05:55. | :06:00. | |
to �9,205, creeping ever closer to the Lib Dem target of �10,000. On | :06:00. | :06:04. | |
the child benefit problem, the cliff edge will be softened, | :06:04. | :06:08. | |
instead of losing every penny of child benefit, for any household | :06:08. | :06:15. | |
with a higher rate taxpayer in it, it will only kick in at �50,000, | :06:15. | :06:20. | |
and tapered to �60,000 before disappearing all together. Overall | :06:20. | :06:24. | |
this budget is fiscally neutral, the winners offset by the losers, | :06:24. | :06:27. | |
the Chancellor says it is the right budget for the country. Together | :06:28. | :06:33. | |
the British people will share in the effort, and share the rewards. | :06:33. | :06:36. | |
This country borrowed its way into trouble, now we are going to earn | :06:36. | :06:46. | |
our way out, I commend the budget to the House. The assessment for | :06:46. | :06:49. | |
the Office of Budget Responsibility and the Treasury is the shift from | :06:50. | :06:54. | |
50p to 45p won't have much of an impact on the nation's finances, | :06:54. | :06:58. | |
that only covers the economics, the politics is far harder to call. | :06:58. | :07:02. | |
George Osborne is taking a huge gamble. Quite simply, he's handed a | :07:02. | :07:06. | |
massive dividing line to the opposition. | :07:06. | :07:10. | |
Let's have some tax transparency, hands up in the cabinet if you will | :07:10. | :07:15. | |
benefit from the income tax cut? Come on? And boy did the Labour | :07:15. | :07:23. | |
leader milk it in the Commons today. All he's doing for ordinary | :07:23. | :07:28. | |
families is giving with one hand and taking far more away with other. | :07:29. | :07:33. | |
It is the millionaire's budget that squeezes the middle, wrong choices, | :07:33. | :07:37. | |
wrong values, out-of-touch, same old Tories. And there was a similar | :07:37. | :07:41. | |
analysis from other opposition parties. You would imagine that | :07:41. | :07:45. | |
decision makers in Whitehall would have woken up to the fact that | :07:45. | :07:49. | |
there is an independence referendum happening in Scotland in 2014, and | :07:49. | :07:54. | |
not making a whole load of decision to make a "yes" result more likely, | :07:54. | :07:58. | |
people in Scotland will be asking why are we putting up with it. | :07:58. | :08:01. | |
Tories at Westminster may not have followed every aspect of the pre- | :08:01. | :08:05. | |
budget briefing, but one measure was a surprise to everybody. In | :08:05. | :08:09. | |
effect, the Chancellor is ending the more generous income tax-free | :08:09. | :08:14. | |
allowance for pensioners, over time, bringing them into line with other | :08:14. | :08:17. | |
tax-payers. Of course it is convenient to hide | :08:17. | :08:21. | |
behind the idea that this is simplification. But, in fact, what | :08:21. | :08:27. | |
it is is a tax increase for the middle group of pensioners. For | :08:27. | :08:33. | |
those earning between around �10,500, and �24,000 a year, over | :08:33. | :08:37. | |
the next year or two, they will face an extra �300 increase in | :08:37. | :08:42. | |
their tax bill. Over the next few years, the total amount of tax | :08:42. | :08:46. | |
taken from this group will be �3 billion. | :08:46. | :08:52. | |
By a strange coincidence, today was the anniversary of another | :08:52. | :08:55. | |
Conservative minister, abolishing another tax. Getting rid of the | :08:55. | :08:58. | |
poll tax turned out to be a vote- winner for the party. Nobody thinks | :08:58. | :09:03. | |
getting rid of the 50p tax rate will be anything like as popular. | :09:03. | :09:09. | |
Our political editor is still here. This surprise that David mentioned | :09:09. | :09:16. | |
there, how big an impact? Quite a big impact. It affects 4.5 million | :09:16. | :09:21. | |
pensioners. It doesn't affect the poorist or the richest. They have | :09:21. | :09:24. | |
already had their allowance -- poorest or the richest, they have | :09:24. | :09:29. | |
already had their allowances shrunk. They do vote and mostly | :09:29. | :09:32. | |
Conservative. It is one of the first things we have seen on the | :09:32. | :09:36. | |
cohort. They don't change their votes very much? They don't and | :09:36. | :09:39. | |
haven't been targeted up until now. We are all in this together is a | :09:39. | :09:42. | |
phrase that is supposed to have died today, but this is a mini- | :09:42. | :09:47. | |
example of it coming back. What do you reckon, is it fair? | :09:47. | :09:51. | |
the entire budget fair? There is all sorts of complicated graphs at | :09:51. | :09:55. | |
the back of the red book. If they manage to bring in the revenue they | :09:55. | :09:58. | |
think they will have the new measure, the new stamp duty, | :09:58. | :10:03. | |
various curbs on allowances, if they do, then they get the | :10:03. | :10:07. | |
appearance, certainly, of a new fairness, a sense that this wealth | :10:07. | :10:11. | |
tax has been brought in, where there were once rather useless | :10:11. | :10:13. | |
income taxes that didn't bring in much in the first place. If you | :10:13. | :10:19. | |
look further down, they are not doing very much at all for the | :10:19. | :10:26. | |
absolute bottom dessiel, that group was hit by -- decile, they were hit | :10:26. | :10:31. | |
by taxes. In the middle, as you go up, everybody has the change to the | :10:31. | :10:34. | |
personal tax allowance, which the Lib Dems fought for so much, it is | :10:34. | :10:38. | |
an odd thing, the middle doesn't look like it is actually that | :10:38. | :10:46. | |
squeezed. In summerry, it is good politics, in in a couple of years | :10:46. | :10:49. | |
time they can -- if in a couple of years time they can show they have | :10:49. | :10:52. | |
brought in revenue from the changes to the wealth taxes. It is not | :10:53. | :11:01. | |
clear at the moment. The Government don't like this idea of fair | :11:01. | :11:04. | |
capital "f" fairness. Changes to welfare, changes to schooling, they | :11:04. | :11:09. | |
are doing all sorts of other things that will help people that doesn't | :11:09. | :11:13. | |
show up in static measures of deciles. Paul Mason, we will hear | :11:14. | :11:17. | |
from him in a second, he was saying a second or two ago, he thought it | :11:17. | :11:20. | |
was an unmemorable budget, but would be remembered for actually | :11:20. | :11:29. | |
things that have not drawn any attention today. I think it is a | :11:29. | :11:33. | |
big budget, they have gotten rid of the 50p rate that they were warned | :11:33. | :11:35. | |
not to, they have gambled because they think the economics will stack | :11:36. | :11:40. | |
up and we will see in a couple of years time. Let's hear from Paul | :11:40. | :11:43. | |
Mason? Thank you from the outer darkness, tomorrow's headlines will | :11:43. | :11:48. | |
be about who gets what, the winners and losers, the idea is the big | :11:48. | :11:51. | |
picture hasn't changed much. It has, the Government is still on course | :11:51. | :11:55. | |
to wipe out the deficit by 2017, the way they are going to do it has | :11:55. | :11:59. | |
changed. Here is the graph showing the austerity plan, that is the mix | :11:59. | :12:03. | |
of tax rises in red, and spending cuts in blue. Now if we compare | :12:03. | :12:06. | |
this new plan with the plan published in the Autumn Statement, | :12:06. | :12:12. | |
during the current parliament we are looking at �4 billion more in | :12:12. | :12:17. | |
cuts, offset by �10 billion less in tax rise, overall there is �6 | :12:17. | :12:19. | |
billion less pain in the economy. After the election, in the last two | :12:19. | :12:24. | |
years of the plan, the picture changes, these last two columns | :12:24. | :12:29. | |
here include �16 billion more in cuts, and only �3 billion more | :12:29. | :12:34. | |
pullback on the planned tax rises. That is a net of �13 billion extra | :12:34. | :12:38. | |
austerity. It comes after the next election. | :12:38. | :12:41. | |
George Osborne signalled today that �10 billion of those cuts would | :12:42. | :12:46. | |
come from welfare. If we stick to the big picture, | :12:47. | :12:51. | |
what is there about the Government's claim this is about | :12:51. | :12:56. | |
growth. By 2014 the 22p corporation tax will put British corporation | :12:56. | :13:00. | |
tax as the lowest in the developing countries. It has business leaders | :13:00. | :13:03. | |
smiling as they picked their way through protests throughout | :13:03. | :13:06. | |
parliament today. The impact is slight, business investment will go | :13:06. | :13:12. | |
up 1%, and growth will rise a barely measurable 0.1%, as the | :13:12. | :13:17. | |
result of these business tax cuts. You can look at this in two ways, | :13:17. | :13:20. | |
first of all, how much spending power you are injecting into the | :13:20. | :13:25. | |
economy and taking out. That is neutral, they are not doing much of | :13:25. | :13:29. | |
that in the forecast when you take away the give aways, then there is | :13:29. | :13:33. | |
the argument of making a difference to the long-term trend growth rate | :13:33. | :13:36. | |
to the economy. Things like planning reform could have a | :13:36. | :13:39. | |
significant impact over the longer term, but it is much too early to | :13:39. | :13:45. | |
bank some of those gains in future. Finally it is official, taxing the | :13:45. | :13:49. | |
rich is pointless. The Treasury, which thought the 50p tax rate | :13:49. | :13:54. | |
would raise �3 billion, two years ago, now thinks not. Here is the | :13:54. | :14:04. | |
:14:04. | :14:19. | ||
If you add in more behaviour change because of tax breaks and cuts, | :14:19. | :14:24. | |
there is �760 billion by cutting the tax rate. Confused? So are they, | :14:24. | :14:27. | |
the economics are highly uncertain, some believe dubious, but the | :14:28. | :14:30. | |
political battle lines are very clear indeed. | :14:30. | :14:34. | |
The Chancellor sent out one of those irritating Spam e-mails | :14:34. | :14:39. | |
tonight, boasting how the budget was, in his words, radical and | :14:39. | :14:43. | |
reforming. We recall Gordon Brown and Nigel Lawson and various others | :14:43. | :14:47. | |
saying much the same thing. To try to throw some light on it now, we | :14:47. | :14:51. | |
are joined by the Chief Secretary to the Treasury, Danny Alexander, | :14:51. | :14:57. | |
and his shadow, Rachel Rhys. What makes you so certain that rich | :14:57. | :15:03. | |
people who avoid a 50p rate tax will pay a 45p rate of tax? We have | :15:03. | :15:08. | |
had those costings independent low audited by Robert Chote, the | :15:08. | :15:13. | |
independent Office for Budget Responsibility. A great deal of | :15:13. | :15:17. | |
work has gone in to quantify those figures. As the package earlier | :15:17. | :15:21. | |
said we wanted to replace a tax that wasn't working at that level, | :15:21. | :15:24. | |
with additional taxes on the wealthiests, that will bring in | :15:24. | :15:27. | |
five-times more from that group of people. That makes this budget a | :15:27. | :15:33. | |
shift from the wealthy to millions of low and middle income earners | :15:33. | :15:38. | |
benefiting from the largest increase ever in loans. You say you | :15:38. | :15:42. | |
will bring in five-times the money, is that certain, it is not, it | :15:42. | :15:46. | |
can't be? It is as certain as we can be. Is it as certain as your | :15:46. | :15:49. | |
predictions as to what will be raised from the 50p rate of tax? | :15:49. | :15:53. | |
didn't make predictions of what could be made from the 50p rate of | :15:53. | :15:56. | |
tax. Your predecessor did? previous Government did. They | :15:56. | :15:59. | |
didn't have an independent Office for Budget Responsibility checking | :15:59. | :16:03. | |
up on those figures. When the Chancellor says it will raise five- | :16:03. | :16:07. | |
times as much money, you don't know? What I do know is there is a | :16:07. | :16:10. | |
vast amount of stamp duty avoidance going on in the system, for example, | :16:10. | :16:13. | |
which no Government before has made an effort to crack down on. Where | :16:13. | :16:18. | |
the changes we are making in terms of punitive rates of stamp duty. An | :16:18. | :16:21. | |
annual charge on those people who try to squirrel their homes away in | :16:21. | :16:25. | |
companies to avoid tax. Those are things much harder to avoid. What | :16:25. | :16:30. | |
we know, because we are not just listening to the OBR, and to the | :16:30. | :16:34. | |
Inland Revenue, but to the academic consensus too. These numbers are | :16:34. | :16:40. | |
about right in this area. You don't know? You can't possibly know? | :16:40. | :16:42. | |
makes me satisfied with the budget, is we are raising substantially | :16:42. | :16:47. | |
more from the wealthy by this Packerage of measures. Labour said | :16:47. | :16:51. | |
it would raise billions. They also said it was temporary, can you tell | :16:51. | :16:57. | |
us the permanent rate of 45p, is it permanent or temporary? The rate of | :16:57. | :17:00. | |
45p is like any other tax now. It is something that we have put in | :17:00. | :17:04. | |
place, that is going to be part of the tax system for the foreseeable | :17:04. | :17:11. | |
future. Of course course, every other tax is kept under review. It | :17:11. | :17:20. | |
doesn't have the temporary status the 50p rate had. It is permanent | :17:20. | :17:24. | |
but under review? Every tax is under review. The 45p rate is the | :17:24. | :17:29. | |
decision we have made to reduce it to 45p, as part of a package to | :17:29. | :17:33. | |
raise more overall from the wealthy, in order to help fund the big tax | :17:33. | :17:36. | |
cuts for people on low and middle income. | :17:36. | :17:40. | |
You expect the next election to have a 45p rate of tax? I can't | :17:40. | :17:43. | |
make promises about what will be in the next three budgets. With what I | :17:43. | :17:48. | |
think is the 45p rate is a sustainable rate. It puts us right | :17:48. | :17:51. | |
in the mid-of what other European countries do at their top rate of | :17:51. | :17:56. | |
tax. Can you help us on this question of pensioners. When the | :17:56. | :18:02. | |
Chancellor said there will be no cash losers from this pension tax | :18:02. | :18:06. | |
arrangement change, why did he leave out the rest of the statement, | :18:06. | :18:10. | |
which is that 4.41 million people will be worse off in real terms, | :18:10. | :18:15. | |
with an average loss of �83, and further and further? Well, it is | :18:15. | :18:18. | |
absolutely true to say that there are no cash losers from this policy, | :18:18. | :18:23. | |
it is a simplification of the system to try to make sure | :18:23. | :18:28. | |
that...Hold On. 4.14 million people, older people, will be worse off? | :18:28. | :18:30. | |
you look at the measures we are taking for pensioners, the largest- | :18:30. | :18:34. | |
ever rise in the state pension today. Moving to a triple lock to | :18:34. | :18:38. | |
protect the state pension, rating up much faster than the previous | :18:38. | :18:42. | |
Government. In 2013/14, under Labour's uprating policies for | :18:42. | :18:46. | |
pensions, people would have benefited to the tune of �66, | :18:46. | :18:50. | |
that's the cost of the decision that we have made. We are doing | :18:50. | :18:58. | |
more on uprating to the tune of �130. In net terms, in 2013/14, | :18:58. | :19:03. | |
pensioners will be better off. is the case in the words of the | :19:03. | :19:06. | |
HMRC briefing, that 4.41 million people will be worse off? It is | :19:07. | :19:09. | |
absolutely right that those people who were connect ex-ing their | :19:09. | :19:13. | |
allowance to rise will see it froze -- expecting their allowance to | :19:13. | :19:17. | |
rise will see it frozen. How much will they raise from that? By the | :19:17. | :19:21. | |
end of the period the costings and the documents show it rises to, by | :19:21. | :19:26. | |
the end of the year, �250 billion. All of these changes will net you | :19:26. | :19:29. | |
an improvement in the economic growth of this country, of how | :19:29. | :19:36. | |
much? 0.12%? All of these measures are designed to support the economy. | :19:37. | :19:40. | |
The big measure in this budget is a tax cut for people on low and | :19:40. | :19:44. | |
middle incomes, that is money that will be spent in the British | :19:44. | :19:51. | |
economy. As Paul Mason said, we are making significant supply side | :19:51. | :19:54. | |
reforms, dealing with red tape. These are all things that will lift | :19:54. | :19:57. | |
the growth potential of this country's economy over the next few | :19:57. | :20:01. | |
years. By how much? I'm not going to put numbers on that. You have | :20:01. | :20:07. | |
put numbers on everything else? Office of Budget Responsibility | :20:07. | :20:15. | |
today says...0.1%? Says we will get 0.8%. Is that pathetic or New York | :20:15. | :20:19. | |
llity? It is an -- nullity? It is an economic forecast of our growth. | :20:19. | :20:22. | |
This country has been through the deepest financial crisis we have | :20:22. | :20:25. | |
seen. Labour made a mess of the economy, with the crisis in the | :20:25. | :20:29. | |
eurozone and so on. We have to make a lot of changes to the way the | :20:29. | :20:34. | |
British economy works to get us back to prosperity. You have | :20:34. | :20:38. | |
expressed great anxiety about getting rid of the 50p rate of tax, | :20:38. | :20:42. | |
and replacing it with a 45p rate of tax, would you restore it? If it | :20:42. | :20:45. | |
was a Labour budget today we wouldn't have got rid of that rate | :20:45. | :20:48. | |
of tax. If there was an election tomorrow, we wouldn't be going | :20:48. | :20:51. | |
ahead with this tax cut for the rich. If there was an election | :20:51. | :20:55. | |
tomorrow, you would restore the 50p rate of tax? That is absolutely | :20:55. | :21:00. | |
right, yeah. I suppose you will tell me, you won't write the | :21:00. | :21:04. | |
manifesto for the next election now? We don't say we will do this | :21:04. | :21:07. | |
or that with tax, we don't know what the economy will look like in | :21:07. | :21:15. | |
three weeks time, let alone three years time. If there was an | :21:16. | :21:20. | |
election going ahead we would have that rate there. | :21:20. | :21:25. | |
Will this 45p rate of tax be as permanent as any other tax? | :21:25. | :21:30. | |
wouldn't be cutting that tax, we would leave it at 50p. It will | :21:30. | :21:33. | |
happen, because you are not in Government. When we come to the | :21:33. | :21:36. | |
next election, there will be a 45p rate of tax, all things being | :21:36. | :21:41. | |
equal? When it comes to the next election, in 2014, 2015, we will | :21:41. | :21:44. | |
have to make a judgment. At the moment we don't know what the | :21:44. | :21:48. | |
economy will look like. He can make the judgment, why not you? | :21:48. | :21:51. | |
hasn't, he has said it will be in the next Liberal Democrat manifesto. | :21:51. | :21:56. | |
He told us last time he was in here, they were promising all sorts of | :21:56. | :22:01. | |
cuts at the next election? couldn't believe the last manifesto. | :22:01. | :22:05. | |
I'm not sure I will promise any more, but what we set out today on | :22:05. | :22:07. | |
the spending side is the same figures as in the out dumb | :22:07. | :22:12. | |
statement last year, we still have to make further savings to do -- | :22:12. | :22:17. | |
Autumn Statement last year, we will still have to make stpurt further | :22:17. | :22:23. | |
savings. -- further savings. There is more cuts envisaged than now? | :22:23. | :22:28. | |
The figures today were on the same basis of the Autumn Statement. | :22:28. | :22:33. | |
Theing has shifted? No, we are still aiming to balance the | :22:33. | :22:38. | |
structural deficit, by 2016/17, the same as when you and I discussed it | :22:38. | :22:42. | |
in November. You are still committing to go into the next | :22:42. | :22:46. | |
election promising further cuts in Government spending? I'm also | :22:46. | :22:51. | |
committed to a further Spending Review to work out how we work out | :22:51. | :22:55. | |
the numbers deliberately set out. That is something that the Liberal | :22:55. | :22:58. | |
Democrats will be committed to. What about the further �10 billion | :22:58. | :23:02. | |
to be found in welfare spending? have not committed to a further �10 | :23:03. | :23:06. | |
billion in welfare. What the Chancellor was doing, rightly, is | :23:06. | :23:11. | |
expose some of the trade-offs and make some spending decisions. The | :23:11. | :23:15. | |
point being made is because of the rise in debt interest, because of | :23:15. | :23:19. | |
the continued growth in the welfare budget, we will face some difficult | :23:19. | :23:22. | |
choices, as a country when that time comes. We want to start that | :23:22. | :23:28. | |
debate about what the right choices are. I thought George Osborne made | :23:28. | :23:32. | |
an explicit statement today, that there will be a further �10 billion | :23:32. | :23:36. | |
in wealth cuts? He said if we were to be sure that departmental cuts | :23:36. | :23:41. | |
were the same as the last Spending Review, that is the amount of | :23:41. | :23:43. | |
savings in annually managed expenditure, most welfare, that | :23:43. | :23:48. | |
will be required. We haven't made that decision because we haven't | :23:48. | :23:52. | |
conducted that spending decision. We would have a different balance | :23:52. | :23:58. | |
to tax increases to spending cuts. We would reinstate the bank bonus | :23:58. | :24:02. | |
tax, and use the money to fund job creation. We wouldn't have the same | :24:02. | :24:06. | |
policy. Also, I think you need jobs and growth to get the economy back | :24:06. | :24:10. | |
on track, what we have seen in the budget today, the Office for Budget | :24:10. | :24:13. | |
Responsibility from said that all the measures that the Government | :24:13. | :24:17. | |
have introduced won't make a blind bit of difference to their | :24:17. | :24:20. | |
forecasts for unemployment and growth. You have to support the cut | :24:20. | :24:25. | |
in corporation tax, don't you? think the best way to support | :24:25. | :24:28. | |
businesses would be a national insurance holiday for all small | :24:28. | :24:31. | |
businesses taking on new workers. Do you or do you not support the | :24:32. | :24:36. | |
cut in corporation tax? That is not the right way to support business. | :24:36. | :24:40. | |
Do you support or not? No, I think it would be better to have national | :24:40. | :24:43. | |
insurance holiday. You are in favour of a higher rate of | :24:43. | :24:47. | |
corporation tax? I think the right thing to do is cut national | :24:47. | :24:49. | |
insurance, that would help small businesses, they are really | :24:49. | :24:53. | |
struggling. The budget has to be about choices, and Labour will make | :24:53. | :24:57. | |
difference choices but we wouldn't cut the 50p rate tax. You wouldn't | :24:57. | :25:01. | |
cut the 50p tax, or the corporation tax? We wouldn't have cut | :25:01. | :25:05. | |
corporation tax, we would have cut the national insurance holiday for | :25:05. | :25:08. | |
all small businesses taking on new workers. We think that is the | :25:08. | :25:16. | |
priority right now. Do you agree with the cham's statement that tax | :25:16. | :25:21. | |
avoidance is -- the Chancellor's statement that tax avoidance is | :25:21. | :25:25. | |
morally repugnant? I would. Would you say someone using their company | :25:25. | :25:29. | |
to reduce their income tax liability was unfit for public | :25:29. | :25:34. | |
office? If you look at Ken Livingstone, he is using a company | :25:34. | :25:38. | |
to pay for people to work for him. I don't know if all the details of | :25:38. | :25:41. | |
individuals' tax returns are there. Would you say it is tax avoidance? | :25:41. | :25:45. | |
Not if you are using it to pay other people. Otherwise you would | :25:45. | :25:49. | |
be taxed twice. I don't know the details of individuals' tax returns. | :25:49. | :25:55. | |
But you do find it morally repugnant? Tax avoidance is wrong, | :25:55. | :25:59. | |
I don't think people should avoid and evade tax. If you are going to | :25:59. | :26:03. | |
cut down on loopholes in the tax system. That money should be used | :26:03. | :26:07. | |
to support ordinary familiar hely not as this Government have done, | :26:07. | :26:11. | |
get rid of the loopholes, but then give people a tax cut at the same | :26:11. | :26:14. | |
time to compensate. I think if you are going to close tax loopholes, | :26:15. | :26:18. | |
that is the right thing to do. You should use that money to give a | :26:18. | :26:23. | |
break to ordinary working families, struggling right now, with stagnant | :26:23. | :26:27. | |
wages and rising prices. If Labour had been doing the budget today, we | :26:27. | :26:33. | |
would have had a reduction in VAT down to 17.5%, to support ordinary | :26:33. | :26:39. | |
families, reinstated the cuts to working tax credit families. | :26:39. | :26:46. | |
Vince Cable said if he was doing the budget he wouldn't have done | :26:46. | :26:49. | |
this. Was it a Liberal Democrat budget in any case? Our top | :26:49. | :26:55. | |
priority was a very big tax cut for people on low and middle incomes. | :26:55. | :26:59. | |
We have delivered that, with the largest increase in the personal | :26:59. | :27:04. | |
allowance, that is worth a lot of money to 21 basic rate tax-payers. | :27:04. | :27:07. | |
There were two million people paying tax under Labour who are no | :27:07. | :27:10. | |
longer paying tax. All the Conservatives saying it was there | :27:10. | :27:15. | |
idea, they are lying? I wrote the Lib Dem election manifesto, the | :27:15. | :27:19. | |
commitment. Great minds think alike, you would say in other | :27:19. | :27:21. | |
circumstances? The commitment to reaching a 10,000 personal | :27:22. | :27:26. | |
allowance was on the front page of our manifesto, and now in the front | :27:26. | :27:32. | |
rank of Government policy delivering benefits to millions of | :27:32. | :27:36. | |
people what I have learned tonight is Labour's policy is increase tax | :27:36. | :27:41. | |
on business, spend more, borrow more, have more debt. It is a | :27:41. | :27:46. | |
recipe for Labour repeating the disaster they committed last time | :27:46. | :27:51. | |
in office. We are saying under your Government, a flatlining economy, | :27:51. | :27:56. | |
unfloiplt rising month after month, I think -- unemployment rising | :27:56. | :27:59. | |
month after month. Young people not working. Get those young people | :27:59. | :28:04. | |
back to work, pay the taxes, not getting welfare payments, that | :28:04. | :28:08. | |
would help reduce the deficit and get the economy growing. The Office | :28:08. | :28:11. | |
for Budget Responsibility is saying that nothing in the budget today | :28:11. | :28:20. | |
has changed their view on growth or unemployment, or on borrowing. | :28:20. | :28:25. | |
At political moments like this, we open the cat at that koom where the | :28:25. | :28:29. | |
political team are -- cat koom, where the political koom are still | :28:29. | :28:37. | |
there. We are seeing if they are able for speech. | :28:37. | :28:43. | |
Daniel Finkelstein, writing a column for the Times, Miranda Green | :28:43. | :28:53. | |
:28:53. | :28:57. | ||
worked for Lloyd George and Paddy Ashdown. And James puorn nel,. | :28:57. | :29:02. | |
-- You said this was like Paul Daniels doing a magic act? People | :29:02. | :29:06. | |
are always amazed somebody has to pay for the tax cut. That is what | :29:06. | :29:09. | |
you will have. Of course, if you are going to have a large tax | :29:09. | :29:14. | |
allowance rise, there will be a tax increase on someone, and it has | :29:14. | :29:21. | |
turned out to be on the age-related lads. The whole thing is how you | :29:21. | :29:24. | |
orchestrate that. Because the coalition has had this big | :29:24. | :29:29. | |
discussion about every other aspect of the budget, that was the one bit | :29:29. | :29:33. | |
of news. It got on the front page of the papers because of that. | :29:33. | :29:40. | |
What do you think? I remember in the Liberal Democrats you used to | :29:40. | :29:44. | |
struggle to get one line in the coverage the next day. The chamber | :29:44. | :29:52. | |
would empty as the Lib Dem leader got up to respond to somebody | :29:52. | :29:55. | |
else's budget. It is extraordinary the party being in Government and | :29:55. | :29:59. | |
having this influence. Are you happy with the abolition of 50p | :29:59. | :30:04. | |
rates of tax for wealthier people? Absolutely not, if it was a Lib Dem | :30:04. | :30:07. | |
Government it wouldn't have happened. There are some big ones | :30:07. | :30:12. | |
for the Lib Dems, as Danny said, what is interesting about this | :30:12. | :30:15. | |
whole process, has been the public negotiation going on between the | :30:15. | :30:20. | |
two sides. That has resulted in winning the argument on taking | :30:20. | :30:26. | |
people on low and middle incomes out of tax. The politics of it. | :30:26. | :30:29. | |
They claimed it was a Lib Dem budget? The politics are difficult, | :30:29. | :30:36. | |
it is difficult to argue against the policy. Let's let James Purnell | :30:36. | :30:42. | |
get a word in? It is the taxes, it may not be a mansion tax, but | :30:42. | :30:49. | |
people with mansions will be taxed. What did you make of of it? | :30:49. | :30:55. | |
reminded me how difficult fiscally neutral budgets are. You used to | :30:55. | :30:59. | |
announce what you spend money on, Government do it every two years, | :30:59. | :31:05. | |
and there is not much to a nouns. The 45p meant there was a risk to | :31:05. | :31:09. | |
having something with not much news in it. He had to have an argument | :31:09. | :31:11. | |
abouting something, and have a big issue about something. It has | :31:12. | :31:17. | |
turned out to be the 45p, whether that turns out to be God or bad, | :31:17. | :31:21. | |
politically, we will wait and see. It is politically risky? It is, but | :31:21. | :31:26. | |
it is something. Politics abhors a vacuum. There were good things in | :31:26. | :31:29. | |
the budget, things I wouldn't agree with, but they would be small | :31:29. | :31:35. | |
without the 45p. It is interesting politic clo they have decided to go | :31:35. | :31:39. | |
for it. I remember when -- politic clo they have decided to go for it. | :31:39. | :31:43. | |
I remember serving under Tony Blair, he said his job was to look after | :31:43. | :31:47. | |
the voters, he was thinking of the people who had got him there. It is | :31:47. | :31:51. | |
not clear to me that David Cameron has been thinking about how to look | :31:51. | :31:56. | |
after his voters in the budget today. His probably is he can't | :31:56. | :32:01. | |
look after them, as everyone will be getting poorly, and growth being | :32:01. | :32:08. | |
so low you have to be able to look at that. The policies I thought | :32:08. | :32:13. | |
what was significant, is we reached a point now where sudden low it is | :32:13. | :32:19. | |
going to happen the cuts, the fact there is low growth, the question | :32:19. | :32:23. | |
is how you play it. This is a big risk, I would put it higher than | :32:23. | :32:27. | |
you. It is a big risk. It will pay off if it produces growth. The OBR | :32:27. | :32:35. | |
can't model that yet, but if there is a production of growth. Because | :32:35. | :32:40. | |
there is relative low small things other than the 45p, his -- | :32:40. | :32:45. | |
relatively small things other than the 45p. Ed Milliband's line, it is | :32:45. | :32:52. | |
the end of "it we are all in this together". He had a powerful | :32:52. | :32:57. | |
argument, a good speech with good jokes. Before we analyse his | :32:57. | :33:01. | |
performance, you were trying to make a point? Ed Milliband did have | :33:01. | :33:05. | |
a God day, as did Ed Balls, it is not enough. If you look at the | :33:05. | :33:08. | |
background to this, the opinion polls, people don't trust Labour on | :33:08. | :33:13. | |
the economy. In a ens is, we have to see what happens from this, this | :33:13. | :33:19. | |
Labour can turn themselves from people commentating gleefully on a | :33:19. | :33:22. | |
potential mistake by George Osborne to a potential Government. There is | :33:22. | :33:26. | |
no evidence of them doing that. one political problem he has is it | :33:26. | :33:31. | |
is not a good policy to move from 45p to 50p. Politically I can see | :33:31. | :33:36. | |
the argument against abolishing it, in policy terms a tax that raises | :33:36. | :33:39. | |
virtually no money simply can't be justified. So the problem that Ed | :33:39. | :33:44. | |
Milliband has got, is how to make the Labour Party not looks a though | :33:44. | :33:49. | |
it is tokenistically anti-business for a policy that brings no money. | :33:49. | :33:52. | |
The Tory gamble is bigger, that is his problem. | :33:52. | :33:56. | |
What is the point you wanted to make? He had a really good day, he | :33:56. | :34:00. | |
had an argument, it is really, really noisy, that speech. I don't | :34:00. | :34:03. | |
think people get it from the TV. The Chancellor is always listened | :34:03. | :34:07. | |
to carefully. Suddenly there is a wall of noise. I have sat there | :34:07. | :34:12. | |
with nowhere near that many people in the chamber, and that first 10 | :34:12. | :34:16. | |
seconds is vital. He hit it really well, it is the end of "we're all | :34:16. | :34:21. | |
in it together", he had good gimmicks, trying to get people to | :34:21. | :34:27. | |
put their hand up, you feel like a banana to ignore them. The front | :34:27. | :34:32. | |
bench ended up looking a little...As Far as the public is | :34:32. | :34:37. | |
concerned urban nanas. The fact that he performs well in parliament | :34:37. | :34:42. | |
is not here or there. This Downton Abbey thing. This is a | :34:42. | :34:47. | |
weak point for the whole coalition, story and Lib Dem. What is this | :34:47. | :34:51. | |
Downton Abbey thing? The idea they are not like ordinary people | :34:51. | :35:00. | |
feeling the pain, cabinet. That is a vulnerable point. This is a Tory | :35:00. | :35:03. | |
weakness that people think the Conservative Party is for well off | :35:03. | :35:07. | |
people. If they will do this it has to work and produce growth. It is | :35:07. | :35:10. | |
difficult to defend the policy of having a 50p tax rate when there is | :35:10. | :35:15. | |
no money. I can see why they did it. It is certainly a political issue. | :35:15. | :35:18. | |
Do you think, as Tory Prime Minister, Tony Blair would have | :35:18. | :35:24. | |
done it? I think most people wanted him to be. Most time he would be. | :35:24. | :35:34. | |
:35:34. | :35:35. | ||
In 1997 he wouldn't have done it, and in 2006 he would have got it | :35:35. | :35:39. | |
done. Grey-gate, they are calling it, a | :35:39. | :35:46. | |
lot will be made of it in tomorrow's papers, is it damaging? | :35:46. | :35:51. | |
I think inevitably, pensioners are very sure about what they gain and | :35:51. | :35:55. | |
they will be militant about it. It is not taking cash sums from people, | :35:55. | :36:01. | |
it is always worse, people are risk adverse, it is through fiscal drag, | :36:01. | :36:04. | |
and inflation. They will get more money in other ways, it will be | :36:04. | :36:07. | |
limited, but everybody will be losing in one way or another. This | :36:07. | :36:16. | |
will make them more. You are grimacing? I think it will be | :36:16. | :36:20. | |
unfavourable for them. You saw what happened when Gordon Brown was | :36:20. | :36:25. | |
derisory about the state pension. They are militant, and they vote in | :36:25. | :36:29. | |
marginal constituencies, it is not clever to irritate them. This used | :36:29. | :36:33. | |
to be your thing? If you are sitting in the thresh you look at | :36:33. | :36:38. | |
it and think, we have -- Treasury, and you look at all the money and | :36:38. | :36:43. | |
you have protected the free TV, the problem is they have had all their | :36:43. | :36:46. | |
goodies, and people didn't know about it in the budget. There is a | :36:46. | :36:52. | |
bigger issue for Labour and the Tories, which is paradoxically, is | :36:52. | :36:57. | |
the Tories need more seats in the north, and they haven't a clear | :36:57. | :37:00. | |
story there. The Labour Party needs to get votes outside the public | :37:00. | :37:04. | |
sector, they have a public sector story, but not the private sector | :37:04. | :37:07. | |
stories. They have the wrong stories at the moment. What about | :37:07. | :37:10. | |
the idea there is another �10 billion to be found in the welfare | :37:10. | :37:15. | |
budget? I think it is much worse than that. The political class is | :37:15. | :37:18. | |
slightly in denial that they have promised to end child poverty, | :37:18. | :37:22. | |
increase aid, deal with emission, they have made all the promise and | :37:22. | :37:27. | |
need to raise taxes more than they say they would do to avoid that. | :37:27. | :37:30. | |
you think it is feasible? I think actually the country will either | :37:30. | :37:33. | |
have to drop all those promises, all the things they have all voted | :37:33. | :37:43. | |
:37:43. | :37:45. | ||
for, all the parties. Or they will have to make much bigger cuts. | :37:45. | :37:50. | |
Things like having the same role in defence around the world and | :37:50. | :37:53. | |
welfare. Everyone is complaining, they are paying more, everyone will | :37:53. | :37:57. | |
be paying more if we are going to have low growth and reduce the | :37:57. | :37:59. | |
borrowing. That is just the mathematics. It is really | :37:59. | :38:03. | |
interesting this idea that people will be told where their taxes are | :38:03. | :38:06. | |
going, and how much precisely they are paying towards welfare, or | :38:06. | :38:09. | |
defence, or whatever it is. That could change human behaviour, | :38:09. | :38:13. | |
couldn't it? It will make clear to people how much tax they are paying. | :38:13. | :38:18. | |
It will breakdown welfare, it will show you a lot of welfare is going | :38:18. | :38:22. | |
to pensioners, it will also show for example things like aid doesn't | :38:22. | :38:25. | |
cost much money. It will be cross cutting, it won't be as people | :38:25. | :38:30. | |
think, it will make everyone be more anti-tax. I think it will be | :38:30. | :38:34. | |
more subtle. It is good to flag up there needs to be a national debate | :38:34. | :38:37. | |
about the future of welfare spending. It it is politically | :38:37. | :38:41. | |
important to prepare the ground, so you have the support to do | :38:41. | :38:43. | |
difficult things. With the pensioners they haven't prepared | :38:43. | :38:48. | |
the ground, that is why it will hurt them. | :38:48. | :38:52. | |
If we disregard important initiatives such as changes to the | :38:52. | :38:58. | |
tax regime on Lucozade, and chicken, and caravans. The thrust of the | :38:58. | :39:02. | |
budget is about allowing the economy to grow by helping business. | :39:02. | :39:09. | |
Did it? If the top rate tax cut were to fail to reignite the flames | :39:09. | :39:12. | |
of British entreprenurial, the Prime Minister turned up with a | :39:12. | :39:18. | |
bevy alternative fuels. Corporation tax tumbled from 24p to 22p, with | :39:18. | :39:24. | |
no pen fits for the banks. Small firms had the carrots of simplified | :39:24. | :39:28. | |
tax daingled in front of them. George Osborne wants to let shops | :39:28. | :39:34. | |
open all day on sunds during the Olympics. There was big pick -- on | :39:34. | :39:38. | |
Sundays during the Olympics. There was an argument for new | :39:38. | :39:41. | |
runways in the south-east. And backing for better rail services in | :39:41. | :39:45. | |
the north. What will they find about to complain about now. Here | :39:45. | :39:51. | |
to discuss the impact of today's budget on business, are Martin | :39:51. | :39:57. | |
Sorrell, the boss of the world's biggest advertising agency. And | :39:57. | :40:05. | |
Helena Morrisey of Newton Investment Managment. We offered to | :40:05. | :40:09. | |
some of of the biggest unions to come on today, none wanted to do it. | :40:09. | :40:16. | |
There are two alternative issues of looking at the 50p cut, begun is, | :40:16. | :40:22. | |
it genuinely is something that will transform the country, eventually. | :40:22. | :40:27. | |
What do you think? At the risk of sticking my head in the lion's | :40:27. | :40:34. | |
mouth, I wouldn't do it. Indicating you might do it in a couple of | :40:34. | :40:39. | |
years was electionly a better thing to do. It seems if you are trying | :40:39. | :40:45. | |
to stimulate entree pent nuerism, things they did -- ent prepen you | :40:45. | :40:52. | |
are inism, entrepeneuralism, those are more important issues than this. | :40:52. | :40:59. | |
If you are going to stimulate entrepeneurs, taxation is the way | :40:59. | :41:03. | |
to go. I'm glad he had the courage, and the headlines will be horrible | :41:03. | :41:08. | |
for him tomorrow. I'm glad he did it, the point they made about the | :41:08. | :41:12. | |
G20, the 50p is the highest top rate of tax. The total of the 20 | :41:12. | :41:19. | |
countries. It plaiks us uncompetitive. -- makes us | :41:19. | :41:22. | |
uncompetitive. You move among these people, are they likely to make | :41:22. | :41:30. | |
decisions on the basis of a 5p tax here and there. The fact we were at | :41:30. | :41:38. | |
the top, it is a disincentive forepeople. Coming from Dublin, as | :41:38. | :41:43. | |
we will do, on the basis they impli amounted CFC things they are | :41:43. | :41:47. | |
talking about, those are more important about the income tax rate. | :41:47. | :41:51. | |
People understand the needs for it, certainly from a political point of | :41:51. | :41:56. | |
view, for the next couple of years. You decided to do that before the | :41:56. | :42:00. | |
budget? Not before the budget. We were given indications that the CFC | :42:01. | :42:04. | |
changes, mooted by the previous Government, wouldn't, and would not | :42:04. | :42:09. | |
be there. This is a tax change? is the taxation of overseas profits, | :42:09. | :42:13. | |
not the corporation tax rate, there is a lot of misings information. | :42:13. | :42:17. | |
You do think corporation tax matters? Do I think it matters, yes | :42:17. | :42:23. | |
I, I think it does. I'm bringing it down to 20% over a period of time, | :42:23. | :42:26. | |
that will be very important. What do you think he missed a trick on | :42:26. | :42:30. | |
what should he have put in the budget? There were some gaps. We | :42:30. | :42:38. | |
are talking about pensioners and all of that. We do need 0.5% | :42:38. | :42:42. | |
interest rates to be precise, we need something to encourage more | :42:42. | :42:45. | |
saving and more investment by households. And I was disappointed | :42:45. | :42:50. | |
they didn't even stpart. They had loads of consultations a-- start. | :42:50. | :42:55. | |
They had loads of consultation, but nothing about childcare and | :42:55. | :42:59. | |
investigating tax breaks, that would encourage more women back | :42:59. | :43:03. | |
into the Labour force to get more talent out there. We can't afford | :43:03. | :43:09. | |
it now? We can't. But I thought they could kick off a consultation. | :43:09. | :43:13. | |
They are kicking off a lot of consultations, that would be an | :43:13. | :43:17. | |
obvious one. Given the fact there was a neutral budget, and the | :43:17. | :43:21. | |
Chancellor being fairly inventive. If you go through all the measure, | :43:21. | :43:25. | |
infrastructure, investment measures, stimulating investment in small | :43:25. | :43:30. | |
companies, tax simplification. Given the fact they had sill little | :43:30. | :43:34. | |
wriggle room at this point in time. In the political and economic cycle | :43:34. | :43:39. | |
I think he has done a good job. What has pushed him off track and | :43:39. | :43:45. | |
will be a problem tomorrow. We see in the front pages of the papers, | :43:45. | :43:55. | |
the called granny tax, and the 50p rate above the head. You could | :43:55. | :43:57. | |
argue that pensioners and insipient pensioners are almost the only | :43:57. | :44:01. | |
group in society that haven't had to pay something towards all of | :44:01. | :44:09. | |
this. He said this is a budget for working people? I that is a | :44:09. | :44:11. | |
problem? You apyre to think that old people | :44:11. | :44:17. | |
were a bit too dim and con-- we were implying that old people were | :44:17. | :44:21. | |
a bit dim to get hold of what you were doing. That seems to have been | :44:21. | :44:26. | |
lost in the reporting so far. They haven't really covered that at all. | :44:26. | :44:32. | |
That hasn't been covered. The granny tax is the only thing that | :44:32. | :44:37. | |
wasn't leaked of significance. Apart from the stamp duty going to | :44:37. | :44:42. | |
7%. It was a last-minute change. that significant? All this | :44:42. | :44:46. | |
protection about what they will recoup from called avoidance. | :44:46. | :44:53. | |
Thrafs all precated on -- that was all pri decated on people changing | :44:53. | :44:57. | |
their behaviours. Somebody is buying a �2 million plus house, | :44:57. | :45:02. | |
trying to close the deal tonight. had to confess we had exchanges | :45:02. | :45:09. | |
contracts on houses, I was a bit worried is would affect us. In | :45:09. | :45:14. | |
annexe A, I was the only person who read it, there is a transitional | :45:14. | :45:21. | |
arrangement. I had one person ask me about that. We can't people out | :45:21. | :45:25. | |
to avoid things. You have to find a house to buy. You can't pop to the | :45:25. | :45:32. | |
shops for of the Is it a good idea? I think, we have seen other | :45:32. | :45:37. | |
countries, several Scandinavian countries have most people renting | :45:37. | :45:41. | |
and a frozen housing market, I don't think that is particularly | :45:41. | :45:46. | |
encouraging of business and development. Just increasing wealth | :45:46. | :45:48. | |
generally. Wasn't it rather depressing for both of you, as | :45:48. | :45:52. | |
people who care about how the economy functions here, that the | :45:52. | :45:57. | |
end result of all of these changes, big ones and little ones, is that | :45:57. | :46:03. | |
there might be 0.1 of a per cent added to the growth figures? I did | :46:03. | :46:06. | |
have difficulty in understanding why the growth rate would go from | :46:06. | :46:11. | |
0.7 this year, to 2.1 next year. I think it will increase, but I'm not | :46:11. | :46:16. | |
sure the gap will be as great. I think in mitigation, the coalition | :46:16. | :46:21. | |
have tried to dole with spending issues and debt issues, we see the | :46:21. | :46:25. | |
glimmer of a long-term cable. I hate to put myself in the same camp | :46:25. | :46:30. | |
as Vince Cable, but I do think we do need a long-term plan, and I see | :46:30. | :46:36. | |
glimmers of it in the Budget Day. In terms of enterprise, tax yaix | :46:36. | :46:41. | |
simplification, investment, -- taxationismcation, investment, all | :46:41. | :46:46. | |
these things he has touched on, or fundamentally, he has helped. | :46:46. | :46:50. | |
Growth has to come from the household sector. He has targeted | :46:50. | :46:54. | |
companies, and the points and the list you have given, is the right | :46:54. | :46:59. | |
list. It will take a longer time. That is exactly right, the message | :46:59. | :47:04. | |
that Timothy Geithner Sunday scored again, 24hoirs ago, this is a tough | :47:04. | :47:09. | |
slog, it will take -- 24 hours, this is a tough slog, and will go | :47:09. | :47:14. | |
on to the next election and beyond. Let's talk through the impact of | :47:14. | :47:21. | |
this budget, with three figures we usually send out to do the tough | :47:21. | :47:25. | |
stuff, taking cabinet ministers to lufrpbl. Three editors, not a | :47:25. | :47:31. | |
single green eye shade between them. Brendan Barber, the eminence editor | :47:31. | :47:36. | |
of the Thames, the first to speed, mandarin, Japanese French and | :47:36. | :47:41. | |
Germany. And Jonathan Sandler, alum nigh of the Sevenoaks courier and | :47:41. | :47:45. | |
now the London Evening Standard. The way to do this is to look at | :47:45. | :47:55. | |
:47:55. | :47:57. | ||
some front pages. The Times, you went with the 50p gambler. | :47:57. | :48:01. | |
It is a bit old, isn't it? It is a story, this will be the story that | :48:01. | :48:05. | |
dominated. I think our point clearly was that on the one hand | :48:05. | :48:11. | |
this was Osborne's big bet, you could say it is a bet he made with | :48:11. | :48:15. | |
small change, 50p. The truth is, it will be the thing that defines him | :48:15. | :48:20. | |
and the Tories for a while yet. is a political gampbl or economic | :48:20. | :48:24. | |
gamble? It is clearly both. A political gamble, they will stake | :48:24. | :48:28. | |
their party's reputation and lose a bit of that compassionate | :48:28. | :48:34. | |
Conservatism. The thing is can they send a signal to business, meaning | :48:34. | :48:39. | |
from cutting to 50p 045p, there will be a return on investment. | :48:39. | :48:44. | |
What do you think of the 50p, is it a gamble? I think he has already | :48:44. | :48:51. | |
cleared it, pretty well. I'm maizeed he has got away with it, | :48:51. | :48:55. | |
three months ago people were saying it was inconceivable, he has done | :48:55. | :48:59. | |
it. He has everybody on side, he has an independent auditor to say | :48:59. | :49:05. | |
it is the right thing to do. It schemes to me a skillful managing | :49:05. | :49:10. | |
of expectations. Your peace processer, the Financial Times -- | :49:10. | :49:14. | |
paper, the Financial Times, I can't see the headline? We are working on | :49:14. | :49:22. | |
it! What have you gone with here? Business budget faces backlash. | :49:22. | :49:27. | |
What does that mean? How much of a gamble is this? The answer is the | :49:27. | :49:30. | |
biggest gamble of all was taken at the beginning of the coalition | :49:30. | :49:36. | |
Government, which was to embark on a really serious deficit reduction | :49:36. | :49:42. | |
plan, which has led to very cheap bore lowing for this Government, -- | :49:42. | :49:46. | |
borrowing for this Government. It has given the Chancellor room to | :49:46. | :49:50. | |
take a smaller political gamble on cutting the top rate of income tax. | :49:50. | :49:55. | |
In a year's time. We wouldn't have supported this at this particular | :49:55. | :50:00. | |
time, but we can see consistency, from the coalition, in cutting the | :50:00. | :50:07. | |
top rate, and taking a large number of people, the working poor, out of | :50:07. | :50:11. | |
this tax band. They have sent some important signals in corporation | :50:11. | :50:18. | |
tax, reduction of corporation tax for companies a little along the | :50:18. | :50:24. | |
lines of Ireland, which is doing a lot better than you might expect. | :50:24. | :50:28. | |
Your paper, the London Evening Standard, you didn't use the word | :50:28. | :50:37. | |
"gamble", you used "gambit", you went on the child tax benefit. | :50:37. | :50:42. | |
had been very heavily leaked, child benefit was something that was new | :50:42. | :50:46. | |
to us. The fact that the threshold was higher. It was new, new, new. | :50:46. | :50:50. | |
The other thing we have tried to get across in that headline, is | :50:50. | :50:53. | |
that it is politically neutral. It is also, I think, interesting low, | :50:54. | :51:00. | |
a very London centric budget -- interestingly, a London centric | :51:00. | :51:06. | |
budget. Boris could have given it, it is pro-workers, and you get | :51:06. | :51:09. | |
extra train carriages. The sort of budget Boris would like to give, | :51:09. | :51:17. | |
that is another matter. We still have one or two other front pages. | :51:17. | :51:22. | |
The Guardian Telegraph have gone with this regard attack upon | :51:22. | :51:27. | |
pensions and peingers, and there is the front page of the Guardian, | :51:27. | :51:33. | |
pensioners to fund tax cut. The Telegraph call it is a granny tax. | :51:33. | :51:36. | |
How politically difficult do you think that is? Pretty difficult. | :51:36. | :51:43. | |
Maybe on the scale of increasing or introducing the tuition fees, this | :51:43. | :51:47. | |
is a very powerful lobby, one, by the way, which has been well | :51:47. | :51:52. | |
protected in the first two years of this Government. They have got good | :51:52. | :51:56. | |
index-linked pension increases, so, I'm afraid, it is their turn, we | :51:56. | :52:00. | |
are all in it together, this is going to upset a few people. But it | :52:00. | :52:08. | |
is true. The coalition Government could have sat on its hand and had | :52:08. | :52:12. | |
a budget and done nothing. Actually it has made hard, tough political | :52:12. | :52:16. | |
choices and taking on some lobbies, in order to get some movement, and | :52:16. | :52:24. | |
in general, set a path towards lower taxes. We do have a young | :52:24. | :52:28. | |
columnist writing tomorrow, who take as tough line on the | :52:28. | :52:34. | |
pensioners. A shameless plug for your paper? It is the quit moaning | :52:34. | :52:39. | |
granny, the baby boomers have had it easy, if you are young and | :52:39. | :52:41. | |
saddled with the debts, they are complaining. There you see the | :52:41. | :52:45. | |
front page of the Telegraph, read by lots of pensioners, you know, | :52:45. | :52:51. | |
these people vote, unlike a lot of the young people who are make -- | :52:51. | :52:54. | |
making the point you appear to sympathise with? Where is the real | :52:55. | :53:00. | |
big cost in this budget? It has come from raising the threshold up | :53:00. | :53:04. | |
to �9,205. That cost �4 billion, you have to find it from somewhere. | :53:04. | :53:09. | |
The one thingly say on the pensions point. What has happened -- the one | :53:09. | :53:14. | |
thing I will say on the pensions point, is the money they had is | :53:14. | :53:18. | |
taken away from them. It is painful for everyone, even if you are at | :53:18. | :53:24. | |
the top end of the income scale, in theory your taxes will rise. Lower | :53:24. | :53:31. | |
income people should see their taxes reduced. They have had to | :53:31. | :53:35. | |
find �4 billion from it. We get so obsessed with the tinkering around | :53:35. | :53:39. | |
the taxation we miss the two bigger stories. The economy is growing at | :53:39. | :53:43. | |
0.8%. We have a fragile economy, that is driving everything | :53:43. | :53:46. | |
happening, the big fight we will have will be around this �10 | :53:46. | :53:53. | |
billion in welfare cuts. I think if you think it this argument will be | :53:53. | :53:56. | |
bloody, wait until the rest of the year. You need it look at the | :53:56. | :54:00. | |
international environment here. Obviously if the world economy | :54:00. | :54:06. | |
starts to get up, and pick up steam, there is better news out of America, | :54:06. | :54:09. | |
growth will change all the budget calculation. You were putting Danny | :54:09. | :54:15. | |
Alexander on the spot, and saying how can you, he can't prove it, but | :54:15. | :54:19. | |
things will get better if the world economy gets better. No European | :54:19. | :54:22. | |
Government could have delivered a budget like this. They have no room | :54:22. | :54:27. | |
for manoeuvre, all they are doing is cutting, cutting, cutting. With | :54:27. | :54:31. | |
just austerity, you won't get growth. This gives us a glimmer, a | :54:31. | :54:35. | |
glimmer of hope. Setting a path for lower taxes in the future. Which we | :54:35. | :54:41. | |
need in this country. You sound rather upbeat? I'm always prudently | :54:41. | :54:49. | |
upbeat. With a purpose? I do think it is | :54:49. | :54:52. | |
important it is very easy to second guess politicians. The coalition, | :54:52. | :54:55. | |
just two years ago, people said if there is a hung parliament or | :54:55. | :54:58. | |
coalition, interest rates will go through the ceiling, they won't be | :54:58. | :55:02. | |
able to do anything. Actually, this Government has done something. | :55:02. | :55:08. | |
is your sense of the public mood? One of the reasons why it was a | :55:08. | :55:11. | |
good budget. I don't think the economy is in good shape, I think | :55:11. | :55:16. | |
it is a good budget. It is the sense that we are a country that is | :55:16. | :55:19. | |
drifting, we are essentially unable any more to make the weather, we | :55:19. | :55:24. | |
are just going to have to live with it, live with what happens in | :55:24. | :55:28. | |
Europe live with a long period of slow growth and austerity. At least | :55:28. | :55:32. | |
this growth had ambition, it started saying we will deal with | :55:32. | :55:36. | |
the scandal of stamp duty avoidance and take that on, and deal with the | :55:36. | :55:40. | |
problems we have an airport problem in the south-east, we will say | :55:40. | :55:47. | |
there is businesses that go. Things will have to happen in the economy | :55:47. | :55:51. | |
that go beyond financial services in the south-east. What was your | :55:51. | :55:58. | |
sense? I think raising the threshold for low paid workers, | :55:58. | :56:02. | |
that was a good thing. That goes down well, the mood is very | :56:02. | :56:05. | |
realistic, that is something that George Osborne has been skillful | :56:05. | :56:09. | |
about, that people aren't expecting great things to happen, that they | :56:09. | :56:16. | |
just think if we just keep ploughing on, maybe eventually | :56:16. | :56:22. | |
there will be green shoots. It is easy to make fun of the | :56:22. | :56:25. | |
Churchillian flourish of the Chancellor today, he he is's | :56:25. | :56:29. | |
setting a course, some small steps -- he's setting the course, some | :56:29. | :56:33. | |
small steps in the right direction in a difficult environment. That is | :56:33. | :56:37. | |
all from Newsnight tonight, more from us tomorrow, until then good | :56:37. | :56:47. | |
:56:47. | :56:48. | ||
from us tomorrow, until then good night. | :56:48. | :56:52. | |
A chilly night in store, clear skies, a touch of frost away from | :56:52. | :56:56. | |
the major towns and city centres into the morning. For most sunshine | :56:56. | :57:00. | |
overhead. A bit more cloud in the south west, one or two showers, a | :57:00. | :57:06. | |
stiffening breeze, the cloud north of Scotland clears. 16 or 17, a | :57:06. | :57:10. |