While I don't believe the criticism Osborne has received is in any way a distraction from the wider issues (if anything it's an indictment of his inability to empathise with disabled shoppers), I thought it worth a quick look at just how out of touch this government is policy wise.
I was on BBC West Midlands earlier today discussing whether or not George Osborne is “out of touch” in the light of his chauffeur using a disabled parking space yesterday.
Obviously Osborne (or at the very least his driver) is out of touch with the needs of disabled people to park their cars close to shops – I have in the past spoken to disabled people who’ve literally had to drive home without shopping because the bays have been occupied by people looking to save a couple of minutes on their way home from work.
While I don’t believe the criticism Osborne has received is in any way a distraction from the wider issues (if anything Osborne’s actions are an indictment of his inability to empathise with disabled shoppers), I thought it worth a quick look at just how out of touch he is in terms of policy.
- This week Osborne described the Welsh government’s opposition to coalition welfare reforms as “unbelievable”, yet this Saturday he will give a tax cut to 13,000 millionaires. This at a time when most families are almost £900 a year worse off since 2010, according to the Institute for Fiscal Studies.
- George Osborne isn’t only out of touch with ordinary people but he is out of touch with leading economists. Former United States secretary of the treasury Larry Summers recently slammed Osborne’s austerity economics and said the ‘Help to Buy’ housing scheme “goes against basic things taught in economics textbooks”. In it’s response to the budget, the National Institute of Economic and Social Research (NIESR) said public finance numbers had been severely distorted by a number of what are essentially accounting gimmicks. It added that deficit reduction had stalled “as receipts fall as a consequence of the weak economy”.
- Much has been made of Osborne’s raising of the personal tax allowance to £10,000. Yet, as he well knows, three million households in the poorest quarter of the household income distribution will not benefit from raising the personal allowance. The poorest in society will gain nothing from the change. The policy will certainly give a little back to those on low incomes. It will put much more, however, in the pockets of what used to be called the upper middle class, as this graph shows. Are those really the people the government ought to be spending money on right now?
- Two thirds of the households hit by the Bedroom Tax contain disabled people. The savings Osborne hopes to make in introducing the tax are around £465m a year. The money raised by the 50p income tax rate is around £1 billion. There would be no need for the Bedroom Tax were it not for the introduction of this tax cut for those earning over £100,000 a year.
- One of the things George Osborne enjoys saying most is that work must pay. By this he usually means that benefits must not. The government is currently “considering” cutting or freezing the minimum wage, a measure which would certainly ensure that work does not pay for a large number of people. It’s also a strange idea: in a consumer-driven economy reducing the disposable income of those most likely to spend money may lead to low growth and stagnation.