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Money Money Money

Everything’s still good in the rich man’s world. But all last week’s spring budget really tells us is just how not good everything is for everyone else. Also, as our Political Correspondent Peter Spencer reports, it also kisses goodbye to any lingering thoughts of an early general election.

One-time Labour Chancellor Roy Jenkins once shrewdly observed: ‘The leaves of dead budgets curl quickly.’

None more so than this one, it seems. The latest YouGov survey for The Times revealed broad support for what was in it, but widespread scepticism about whether it’d leave anyone better off. Or even whether the measures were affordable.

Also, and probably most damningly, a clear majority believed it simply wouldn’t make any difference. Little wonder, then, that Chancellor Jeremy Hunt’s efforts, likewise, haven’t made any difference to Labour’s commanding lead.

All of which helps explain why the much speculated upon spring election is now well and truly frosted over. If there were to have been a quick rush to the polls, Hunt would have done something a lot more spectacular than just shaving two per cent off employee’s national insurance.

Many on the Tory right would have loved to have seen him do the same, or more, with income tax. Something to get people really sitting up and taking notice.

But here’s another quote, from another big Labour beast of yesteryear, Harold Wilson: ‘Whichever party is in office, the Treasury is in power.’

So much then for shifting the dial via the budget, then dashing to the polls before the party suffers the rebuff of getting slaughtered in May’s town hall contests. If that was Rishi Sunak’s dream then the Treasury proved Wilson’s point with its blunt message. ‘Dream on.’

Instead, the Tories totter on towards what few now believe will be anything other than a very bad result. Indeed, one spectacular survey carried out for the Evening Standard by IPSOS last week predicted they’d end up losing every single one of their seats.

That’s nul points with serious knobs on.

Of course there are lots of caveats to what any pollster predicts, not least of which is the possibility of something, Wilkins Micawber-ish, turning up. Cue the sliver of hope implicit in the now widespread and confident predictions that inflation’s set to fall below two per cent.

Against that comes the dire pronouncement from Paul Johnson, who heads the leading economics think-tank the Institute for Fiscal Studies, that both Hunt and his Labour shadow are joined in a ‘conspiracy of silence’ about just how bad things are.

Any tax concessions, however great or small, will have to be paid for in spending cuts, he warned. For which reason he dryly observed: ‘Whoever is chancellor… after the election – might wish they’d chosen a different line of work.’

It’s certainly not to be wondered at that the Shadow Chancellor Rachel Reeves is not screaming the problems she’s anticipating from the rooftops. After all, do turkeys vote for Christmas? Is the Pope a satanist? Is Ken cleverer than Barbie?

But the stark underlying reality is that while Britain’s public services are creaking, in some cases crumbling, our tax burden is at a seventy-year high.

Of course the Tories try to explain this away with the extra spending needed to cope with the Covid crisis, and the squeeze on energy costs thanks to Putin’s war in Ukraine. And with some justification.

But only some.

The then Chancellor George Osborne’s response to the global economic crash sixteen years ago, and subsequent Tory attempts to mitigate the damage, must also play their part. Certainly, the Labour party’s played up this charge ever since. And voters are clearly taking notice.

Dead on cue comes former Tory Prime Minister Theresa ‘kitten heels’ May’s announcement that she’s deserting the sinking ship. Loyal to the last, she’s insisting she’s still right behind Rishi, but really wants to devote more time to the good causes she espouses.

But her decision does take the number of Tory MPs who want out at the general election to sixty. That’s more than at any point since the run-up to Tony Blair’s landslide victory all those years back.

However, Paul Johnson remains on the money with his implied prediction that Prime Minister Starmer’s honeymoon with the electorate won’t last long.

Already his side’s floundering over what it’ll do about the Chancellor’s nicking their plan to curb the right of people who live here but say their real home is elsewhere to dodge paying their taxes.

Reeves had earmarked the so-called ‘non dom’ windfall to pay for desperately needed improvements to the National Health Service. How exactly she plans to plug that gap remains to be seen. Efficiency savings are as often talked about as they are rarely delivered.

And then there’s the truly extraordinary Tory talk of eventually going the whole hog with national insurance. Not stopping at lopping a bit off, but abolishing it altogether.

In the event, talk is probably all it is. But it does go with Sunak’s contention that hard-working folk shouldn’t be expected to shell out twice for the privilege of going to work. Having to pay the insurance bit as well as their income tax.

Problem being that making it happen would cost even more than Loony Liz Truss promised us, without any idea where the money would come from, and which practically tanked the economy. Certainly finished her off.

The difficulty, however, with talking telephone numbers, is that they transcend lies, damned lies and statistics, to the point of losing themselves down Alice in Wonderland’s rabbit hole.

Take the endlessly repeated expression ‘headroom’, the Chancellor’s term for how much money there is in the kitty that’s available for extra spending or tax cuts.

This figure, extraordinarily, is based on forecasts of the national debt, in other words how much the government will be in hock to financial institutions or the Bank of England, in four to five years’ time. Problem being these predictions have often turned out to be less than wholly accurate.

To the tune, that is, of over four-hundred-billion pounds. That’s, er, twice the entire NHS budget, or four complete High Speed Two train projects, or nearly seventy aircraft carriers.

Talk about crocks of shiny stuff at the end of rainbows. Then again, some people can get that lucky.

New Yorker Nancy Cavaliere, for example, who got into trawling second-hand shops when she was first trying to furnish her home and found new things horribly expensive.

To this day she can’t resist potential bargains. And so, when some rather pretty plates in a thrift shop with the unlikely indent in the ceramic that said ‘Picasso’ caught her eye, they seemed worth a two-buck flutter.

Certainly were, as a specialist auction house confirmed that they were genuine. And then, finally going under the hammer, they fetched a cool thirty-four-thousand dollars. That’s thirty-three-thousand nine-hundred-and-ninety-eight more than she paid for them.

As she put it last week: ‘With second-hand shopping, you have to be in it to win it. On that day I won gold.’

You can say that again.


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