What a time to be alive! Super Tuesday in America followed in the same 24 hour period by the Budget. A decade of birthday excitement in one hit. What else could a middle aged man with few hobbies ask for? (a life probably!)
For the record, The Trump won in 14 of the 15 Republican states on Super Tuesday while Biden dominated in the Democratic contest. It leaves a rematch that nobody wanted.
“They call it Super Tuesday for a reason,” The Trump exclaimed. “This is a big one. They tell me, the pundits and otherwise, that there has never been one like this, never been anything so conclusive.”
Unfortunately, for once, he was right.
Perhaps it’s just me, but it is completely insane that someone who is glaringly unfit and unable to do the job of President could get anywhere near the Oval Office again. But here is the real problem……I could be describing either candidate. A man of little conviction who can barely string a sentence together against a man of little conviction who can barely string a sentence together.
According to the 675 million US citizens that are eligible to run for President, these two are as good as it gets.
And let’s also be honest, it is no better here.
We have a serving Government who are the most unpopular in (insert number of your choice, but pick a big number) decades, yet they get to decide when the next General Election will take place by trying to predict at what point they might not be quite as unpopular as they have been for the previous 4 years.
In the meantime, Jezza delivered a Budget that included fat shaming Keir and digs at Angela Rayner’s tax affairs (the irony) when he should be more interested in economic point scoring rather than political sparing. If only.
He also used it to make numerous mentions of successful lobbying efforts for specific policies by Conservative MPs, most of them in marginal seats. Clearly the Budget speech is for self-promotion more than anything else!
Which all provided the perfect backdrop for the former Prime Minister Theresa May to announce that she will stand down as an MP at the next General Election (despite holding the Maidenhead seat for 27 years). She can clearly see the writing on the wall for the Tories generally and the Brexit mess she caused coming home to roost.
A further 63 MPs elected as Conservatives are to quit Parliament at the General Election…..that number will grow dramatically after the masses have voted.
And what can we expect from a Labour Government waiting in the wings? Nobody knows as their strategy is simply to say nothing, avoid controversy and be elected by default.
Is it any wonder that 6 out of 10 UK voters feel politically homeless.
It really does feel like we deserve better both sides of the Atlantic……we will have to wait some time for it though.
The Numbers
The Budget dominated the numbers this month given that they are pretty important in an election year.
68 minutes of guff that contained pretty much everything that was leaked prior to the speech. These days, the leaks flow thick and fast and there is no point in playing the Budget guessing game. Budget leaks used to be a resignation offence. Now they are an essential part of the news management process.
The backdrop to what the Tories are battling, is the legacy of 14 years of their own making. Government debt has increased sharply. Instead of falling to 75% of GDP in 2024-25 (as predicted by Rishi in 2020 when Chancellor), it is on course to hit almost 99%. In cash terms this is an extra £650 billion. Meanwhile, measures to restrain the debt rise with higher taxes mean the tax burden, which in March 2020 was set to remain at 33% of GDP, is already well above 36% and heading for an all-time high of 38%.
Sandwiched between Rishi and Jezza as Chancellor has been Nadhim Zahawi and Kwasi Kwarteng. Their legacy and incompetence are the reason why there is little wiggle room.
The rising tax burden, a near-decade long freeze in income tax and national insurance allowances and thresholds and an increase in corporation tax, has much further to run. It is why Jezza cannot contemplate what many want…..the unfreezing of the freeze on allowances and thresholds. That would deprive the Government of too many future tax revenues.
There was a striking choice of language from the Chancellor, with Jezza talking about the economy having “turned a corner on inflation” and will “soon have turned the corner on growth.” The whole idea of having turned a corner is a fascinating and contestable one, given we are in a (mild) recession and the projected growth for 2024 being just 0.8%. But hey, let’s not let the truth get in the way of political spin.
Fiscal headroom (one for us cardigan wearers) for the next Government will be an almost record low of just £8.9 billion. So, there is almost no shock absorber and little scope (without significant economic growth) for increased public spending.
Forecasts suggest inflation will fall below 2% in "just a few months time" according to Jezza and that the fall in inflation “didn’t happen by accident.” Really? It kind of did though…..just as it went to 11% by accident.
One for the small businesses……there is to be an increase in the threshold for VAT from £85,000 to £90,000, which is welcome but doesn’t quite compensate for a 7 year freeze.
One for the middle-earning parents……the child benefit threshold is to be increased to £60,000 and top taper limit raised to £80,000, meaning 170,000 families are taken out of losing the benefit.
One for the masses……employee National Insurance will be cut by another 2p, from 10% to 8% and self-employed National Insurance will be cut from 8% to 6%.
A second one for the masses……oil and gas windfall tax will be extended by an additional year to 2029, raising £1.5 billion.
One for the savers……a British ISA (BRISA) will be added to the library of ISA’s and will come in the form of an extra £5,000 tax-free allowance for the public to invest exclusively in UK. He literally gave no details……as there weren’t any as Jezza will make up the rules in the next tax year.
The theme and framing of the Budget suggests that Rishi and Jezza are waiting for another OBR forecast and an opportunity for further tax cuts in the Autumn Statement before going to the country to vote.
Interest rates should be lower. Economic growth should be higher. Real household disposable income is now forecast to return to pre-pandemic levels. Cuts to energy bills will start to be felt. The Bank of England is expected to have started cutting interest rates too.
Economics do not always drive the politics, but despite the opposition daring Rishi to call an election in May, the signals from today are Autumn.
Jezza said that he hoped his budget would “change history.” The concern among Tory MPs is that it has not done enough to change the future.
Elsewhere, my own favourite number of the month……2……the number of wins the little lady achieved at her school swimming gala.
Trump of the Month
Oh my goodness. I really wished I hadn’t delved deeper on this as I am angry beyond words (I’ll give it a go though).
The winner of Trump of the Month for March 2024…… HMRC.
In amongst Jezza’s Budget speech was the announcement that HMRC has been allocated an additional £140 million to spend on reducing tax that is owed to the Government but has yet to be paid.
“Additional?” It comes on top of the £163 million announced in the Autumn Statement.
So, £303 million allocated in just 4 months.
“Yet to be paid” you say?
The Office for Budget Responsibility and HMRC published
data showing the
Government was owed about £40 billion in unpaid income tax and £30 billion in
unpaid VAT. Across all taxes, HMRC calculates that it is owed slightly less
than £120 billion. This is double the £50 billion that was owed before the
start of the coronavirus pandemic.
£120 billion! And for dramatic effect……£120,000,000,000.
To put that figure into perspective, that is (broadly) the same amount as the cost of the banking bailout of 2008.
So, when Council Tax rises in the coming weeks to pay for diminishing services or when you hear of someone joining an NHS waiting list that is expressed in years (not months) or you hit yet another pothole in the road……remember that £120 billion figure.
What is the point of having tax policies / rules if they are going to be ignored and public services and debt are compromised to accommodate the lack of tax policing?
What a mess. What absolute lunacy.
Trump Lunacy Rating: 10 / 10
And Finally……
“Insanity in individuals is something rare - but in groups, parties, nations and epochs, it is the rule.”
Friedrich Nietzsche
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