Is Osborne planning a surprise cut in income tax for the Budget?

A source suggests that Ed Balls's call for a temporary cut in the basic rate was designed to pre-empt Osborne's Budget rabbit.

Expectations for the Budget have been so downplayed that suspicion is growing in Westminster that George Osborne will pull some kind of rabbit out of the hat tomorrow. If so, could it be a surprise cut in income tax? Here's the theory one source put to me earlier.

Ed Balls, who always seeks to pre-empt Osborne's announcements (he called for a freeze in fuel duty before the Chancellor did just that in last December's Autumn Statement), proposed a temporary cut in the basic rate in his interview in last Saturday's Daily Telegraph. The shadow chancellor, who has previously called for a cut in VAT and the reintroduction of the 10p tax rate (a measure Osborne was considering before Labour's announcement), told the paper: 

Anything he can do to help low and middle-income families would be better than no tax cut at all. A Labour shadow chancellor says taxes should be cut. A Tory Chancellor says, 'Over my dead body.' I can't remember a situation like that in my lifetime. If George Osborne, in this Budget, were to cut the basic rate of tax, we would applaud him. If that's all he did, I would be concerned. But, even so, we would say, 'At last'.

My source suggested that Balls had either learned or guessed that Osborne was planning to cut income tax in the Budget. If the former, the question now is whether Osborne will go ahead with the move. After last year's disastrous decision to abolish the 50p rate, a 1p cut in the basic rate would be the perfect way to demonstrate that, as Tory MP Robert Halfon recently put it to me, the Tories believe in "tax cuts for the many, not just the few". 

Chancellor of the Exchequer George Osborne. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Is anyone prepared to solve the NHS funding crisis?

As long as the political taboo on raising taxes endures, the service will be in financial peril. 

It has long been clear that the NHS is in financial ill-health. But today's figures, conveniently delayed until after the Conservative conference, are still stunningly bad. The service ran a deficit of £930m between April and June (greater than the £820m recorded for the whole of the 2014/15 financial year) and is on course for a shortfall of at least £2bn this year - its worst position for a generation. 

Though often described as having been shielded from austerity, owing to its ring-fenced budget, the NHS is enduring the toughest spending settlement in its history. Since 1950, health spending has grown at an average annual rate of 4 per cent, but over the last parliament it rose by just 0.5 per cent. An ageing population, rising treatment costs and the social care crisis all mean that the NHS has to run merely to stand still. The Tories have pledged to provide £10bn more for the service but this still leaves £20bn of efficiency savings required. 

Speculation is now turning to whether George Osborne will provide an emergency injection of funds in the Autumn Statement on 25 November. But the long-term question is whether anyone is prepared to offer a sustainable solution to the crisis. Health experts argue that only a rise in general taxation (income tax, VAT, national insurance), patient charges or a hypothecated "health tax" will secure the future of a universal, high-quality service. But the political taboo against increasing taxes on all but the richest means no politician has ventured into this territory. Shadow health secretary Heidi Alexander has today called for the government to "find money urgently to get through the coming winter months". But the bigger question is whether, under Jeremy Corbyn, Labour is prepared to go beyond sticking-plaster solutions. 

George Eaton is political editor of the New Statesman.