Osborne has not solved the cost of living crisis

Britain needs convincing ideas about how to ensure that real wages rise.

Stand back from the detail of today's Budget and what we observe is Britain's political class trying – and failing – to respond to the crisis in living standards facing Britain.

They are doing this at the same time as they, of course, seek to outmanoeuvre their political opponents and build support among their friends. One manifestation of this will be the growing tussle over tax cuts, which will increasingly dominate party politics in the years ahead (see tomorrow's NS).

Until there are convincing ideas that resonate with the public on how to ensure that real wages will rise, party leaders will remain in the familiar territory of fighting over tax and benefit changes.

The political need to support living standards and kick-start growth, which greatly outstrips the practical ideas on how these goals can be achieved, resulted in a number of contradictions that ran through today's Budget.

Changes to personal tax – billed as reducing the burden on low-to-middle-income Britain – actually result in by far the biggest gains going to those in the top half of the income distribution. A statement of vaunting ambition about the need to reform and simplify the whole of our tax and National Insurance system immediately gets submerged in a sea of tax wheezes. And the heralding of a new model of growth is fleshed out with a set of micro-measures that will be wearily familiar to anyone who has spent time in Whitehall over the past decade.

There are, naturally, things to welcome. Steady growth in apprenticeships, extra support for science, a helping hand for first-time housebuyers and taxing private jets are all to the good. The extension of mortgage interest support will prove important in a year that is going to see more and more households pushed closer to repossession due to the impending hike in interest rates. And there may be some begrudging acknowledgement from an angry public for the cut in fuel duty.

But the real measure of today's political class will be whether they can develop a compelling account of what really underpins shared growth, in which the gains are more fairly spread across the working population. Without this, all of today's tax tweaks and the associated reform rhetoric will be neither here nor there.

Gavin Kelly is the chief executive of the Resolution Foundation.

Gavin Kelly is a former adviser to Downing Street and the Treasury. He tweets @GavinJKelly1.

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5 scenarios that will definitely happen in Ukip Britain

The Ukip general election 2017 manifesto is out. 

On 8 June 2017, Ukip defied expectations and pulled off a 392 majority in the general election. Prime Minister Paul Nuttall swiftly enacted his manifesto pledges – all 63 pages of them.

Now, thanks to Ukip, Britons no longer have to worry about silly things like the EU and multiculturalism. But not everyone has managed to adjust immediately to the Brexit paradise.

1. The beekeeper

Tommy knew right away his bees weren’t happy. They were swarming all over him, buzzing like a razor on a rampage, ready to sting. It was just as well he was wearing his beekeeping suit.

Except, wait a minute? Hadn’t the new Ukip government banned face coverings? Tommy was proud of being a law-abiding citizen. As he slowly removed his protective helmet, he shouted a parting message to his wife: “Enjoy our British honey when I’m gone.”

2. The job

“Thanks for coming,” Martin said to the three job applicants sitting in the glass-walled office. “I’m looking for someone who will be able to monitor the world’s FX markets, and identify any kind of insider trading.”

“I did my PhD in fraudulent FX and spent the last ten years tracking white collar criminals down,” said Gretchen.

“I’m a former trader who worked at three different central banks and makes my own beer on the side,” said Pierre.

“I’m young, unemployed, have no real qualifications to speak of and am under the age of 25,” said Stu. “I’m British.”

Martin shook Stu’s hand. “Welcome aboard,” he said.

3. The rescue

Stanley dodged the falling buildings as he made his way to the harbour, where a red-faced man in khaki was standing looking confused.

“Have you brought vital supplies?” Stanley shouted over the rumble of the earthquake.

“I’m from Britain and I’ve got nosh,” the man said.

“Nosh?” Stanley repeated. “What kind of country sends snacks to an impoverished country in the middle of an earthquake?”

“It’s the Naval Ocean-Going Surgical Hospital,” the man said. “We scrapped our foreign aid target.”

“Oh fuck off,” said Stanley.

4. The family

Helen knew something was different as soon as she stepped inside her parents’ house. “What have you changed this time?” she asked her octogenarian mother. “Is it the cushions? Did you give the door a fresh coat of paint?”

“No, darling,” her father said. “We just installed a sauna and hot tub complex along with an outdoor pool.”

Helen scratched her head. “I know Ukip has kept the triple lock pension guarantee,” she said. “But how can you possibly afford it?”

Her parents giggled so hard Helen began to worry they were having seizures. “Haven’t you heard of inheritable mortgages?” her mother managed to say. “One day, all this debt will be yours.”

5. The clouds

Ronald rubbed his eyes, and peered through the window again. No, he wasn’t seeing things. There was no sun. He stepped out of the house and stared at the sky. Where the bloody hell was it?

Then he remembered the referendum the month before. It had asked Gibraltarians if they wanted to be truly British, and he had ticked yes.

It began to rain.

Julia Rampen is the digital news editor of the New Statesman (previously editor of The Staggers, The New Statesman's online rolling politics blog). She has also been deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines. 

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