Budget 2013: Osborne does it best when he does nothing at all

“The last thing we need is more tinkering”.

Asked what he wanted from next week’s budget, one successful entrepreneur I spoke to this week replied “not much".

A couple of others in the same discussion agreed. None had a list of proposals at the ready. It wasn’t that they don’t care what Mr Osborne says (although all agreed their focus was more on their businesses), it’s more that they want him to do very little. It fits with the general theme I hear from business that the government’s role should be to create a positive growth environment and then get out of the way.

And with the national finances in a pickle, the entrepreneurs were unanimous that the boldest thing Mr Osborne could do was nothing.

“The last thing we need is more tinkering,” said one. Her point is one ICAEW made in its submission to George Osborne, in which it suggested that instability in tax policymaking undermines future confidence. Whatever the good intentions, the culture of constant change in the tax system ends up leading to complexity.

After last year’s omnishambles, Osborne might himself wish he could get away with doing nothing. But with forecasters pointing to a triple-dip recession, sitting on his hands isn’t a political option for Osborne any more than it’s an economic one.

Assuming he ignores calls (some from within the coalition) for a switch to a plan B, or a plan A+, and instead sticks rigidly to fiscal austerity, he will have very limited scope for manoeuvre. As a result, rather like the wizard in the Wizard of Oz, he’ll be using all the political trickery, smoke and mirrors he can to create the illusion of doing lots to help the country (and will be especially keen to be seen to help what he calls strivers and “the working poor”) without really being able to do a great deal.

The best outcome for business would be a Budget that really grasps the need to inject growth and confidence into the economy. As ICAEW explained in its Budget submission, this means putting in place the right mechanisms for getting finance to small businesses. This doesn’t mean another rebranding of the government’s lending scheme (which has already been re-launched on several occasions) but it does mean getting the proposed Business Bank up and running properly. It requires the funds already made available, whether through the Local Enterprise Partnerships or other mechanisms such as Funding for Lending to actually get to the frontline.

Accepting the limited scope for action open to the chancellor, combined with the need for a little political magic, (these occasions are often as much about pulling political rabbits out of the hat as they are sensible economics) there will doubtless be a whole raft of changes to various types of taxation.

Personal allowances will be raised, some commentators are expecting a tactical reduction in VAT (possibly for the hospitality sector), while others point to a continuing reduction in corporation tax (this one coming into force in 2014).

In the absence of much room for real action, it is fair to assume there will be a number of consultations announced into a whole host of potential schemes many of which will never amount to much, but which look good on the day.

There will be the usual media flurry listing winners and losers from the budget, all filtered through the current political lens of austerity and Labour’s constant jibe that the Tories are more concerned with helping the rich than the poor.

It’s hard to think that there would be more winners if Mr Osborne listened to the entrepreneurs and made next week’s the shortest Budget in history.

This article first appeared in economia.

Photograph: Getty Images

Richard Cree is the Editor of Economia.

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Calum Kerr on Governing the Digital Economy

With the publication of the UK Digital Strategy we’ve seen another instalment in the UK Government’s ongoing effort to emphasise its digital credentials.

As the SNP’s Digital Spokesperson, there are moves here that are clearly welcome, especially in the area of skills and a recognition of the need for large scale investment in fibre infrastructure.

But for a government that wants Britain to become the “leading country for people to use digital” it should be doing far more to lead on the field that underpins so much of a prosperous digital economy: personal data.

If you want a picture of how government should not approach personal data, just look at the Concentrix scandal.

Last year my constituency office, like countless others across the country, was inundated by cases from distressed Tax Credit claimants, who found their payments had been stopped for spurious reasons.

This scandal had its roots in the UK’s current patchwork approach to personal data. As a private contractor, Concentrix had bought data on a commercial basis and then used it to try and find undeclared partners living with claimants.

In one particularly absurd case, a woman who lived in housing provided by the Joseph Rowntree Foundation had to resort to using a foodbank during the appeals process in order to prove that she did not live with Joseph Rowntree: the Quaker philanthropist who died in 1925.

In total some 45,000 claimants were affected and 86 per cent of the resulting appeals saw the initial decision overturned.

This shows just how badly things can go wrong if the right regulatory regimes are not in place.

In part this problem is a structural one. Just as the corporate world has elevated IT to board level and is beginning to re-configure the interface between digital skills and the wider workforce, government needs to emulate practices that put technology and innovation right at the heart of the operation.

To fully leverage the benefits of tech in government and to get a world-class data regime in place, we need to establish a set of foundational values about data rights and citizenship.

Sitting on the committee of the Digital Economy Bill, I couldn’t help but notice how the elements relating to data sharing, including with private companies, were rushed through.

The lack of informed consent within the Bill will almost certainly have to be looked at again as the Government moves towards implementing the EU’s General Data Protection Regulation.

This is an example of why we need democratic oversight and an open conversation, starting from first principles, about how a citizen’s data can be accessed.

Personally, I’d like Scotland and the UK to follow the example of the Republic of Estonia, by placing transparency and the rights of the citizen at the heart of the matter, so that anyone can access the data the government holds on them with ease.

This contrasts with the mentality exposed by the Concentrix scandal: all too often people who come into contact with the state are treated as service users or customers, rather than as citizens.

This paternalistic approach needs to change.  As we begin to move towards the transformative implementation of the internet of things and 5G, trust will be paramount.

Once we have that foundation, we can start to grapple with some of the most pressing and fascinating questions that the information age presents.

We’ll need that trust if we want smart cities that make urban living sustainable using big data, if the potential of AI is to be truly tapped into and if the benefits of digital healthcare are really going to be maximised.

Clearly getting accepted ethical codes of practice in place is of immense significance, but there’s a whole lot more that government could be doing to be proactive in this space.

Last month Denmark appointed the world’s first Digital Ambassador and I think there is a compelling case for an independent Department of Technology working across all government departments.

This kind of levelling-up really needs to be seen as a necessity, because one thing that we can all agree on is that that we’ve only just scratched the surface when it comes to developing the link between government and the data driven digital economy. 

In January, Hewlett Packard Enterprise and the New Statesman convened a discussion on this topic with parliamentarians from each of the three main political parties and other experts.  This article is one of a series from three of the MPs who took part, with an  introduction from James Johns of HPE, Labour MP, Angela Eagle’s view and Conservative MP, Matt Warman’s view

Calum Kerr is SNP Westminster Spokesperson for Digital