The Budget: Part 2

Wednesday, 21st March 2007 at 18:30 UTC Leave a comment

Here comes the second half (hopefully the last section) of my budget reaction. This time its things like benefits, development aid and corporation tax which I want to consider. Apologies for the lack of any cohesive order, by the way.

Child benefit is up, and some pensioners will do rather well. Child benefit, while vital to many households, is a bit of a political football, because, as with anything else, children have a certain appeal. Again, its election year for Labour leaders, and Gordon Brown, no matter how good his intentions (or how much we’d like to believe about them) has just done the biggest economic ‘baby kissing’ exercise available to him.

Big money to cover pension company failures deals with an immediate single issue that has lots of umph. Its the kind of campaign thats nice to get involved with, but which can only have limited ongoing effects. Its interesting that, in the BBC summary at least, no where are the words “basic state pension” mentioned. Brown is out for the immediate media win without considering the reason people are so dependent on company pensions: his treasury isn’t paying out enough either.

This budget appears to me to be about the backing of middle-England. Those who earn at the high end of the basic rate bracket are rewarded, while, as I said in part one, those who rely on the minimum wage and, as above, on the basic state pension, are now affected. But there’s another group doing rather well…

Small companies are to be taxed more, while large ones are to be taxed less. So much for encouraging personal enterprise. Labour’s donors will get richer, while small start ups, those who liberalism is supposed to favour, will struggle.  Never let it be said that Britain is a land of free enterprise and small shop keepers: we certainly won’t be if this performance is repeated.  Well, this climate isn’t causing problems for investment: we’re receiving 7% more external investment both this year and next.  I guess we’ll have to trust the chancellor that this is good investment and not the kind of investment other parts of the government promote in other countries.

While there’s some money for the developing world, there’s nothing for debt relief or anything quite like that. In fact, all I can see is money to tackle climate change. This is the sad effect of an NGO world that moves from one year’s issue to the next. If we had a long term, grassroots campaign (and I don’t mean Jubilee Debt, though they do a great job) working on all issues of poverty in the Global South, then Brown wouldn’t be so off-the-hook with this one, and maybe we’d have money for both Africa and the rainforests therein.  But hey, we can always find so much for the military to spend money on (£400m extra for overseas ‘commitments’ like Iraq).


Entry filed under: Africa, Economics, Elections, Politics.

The Budget My embarrasingly well travelled map

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