George Osborne: like Fernando Torres, only less effective

While the Chancellor waffled on about how “we are all in this together”, it was announced that the Queen was receiving a 16 per cent boost to her Government grant and the likes of Torres will get a staggering tax break next year. That is a lot of "spare r


I must admit some excitement as George Osborne declared “One of your company slogans is a very fitting catchphrase for what I want to talk about” to the assembled crowd of Morrisons employees. I was quite looking forward to discovering precisely how “STOP! Did you get the quiche?” related to our fiscal policy. Imagine my disappointment when the slogan in question turned out to be “Every Penny Matters”.

In a speech hailed by some as the Chancellor’s “man of the people” moment – presumably because he appeared to have gone to sleep Julie Andrews and woken up Dick Van Dyke – he proceeded to outline why his savage attack on the safety net that is our system of welfare was entirely justified. It says everything about this man, that welfare reforms which he resisted at the start of his tenure because of cost – so much so, that Iain Duncan Smith was rumoured to be on the verge of resignation – are now claimed as his own. What changed? They turned out to be quite popular.

According to Osborne, anyone who expresses concern about these reforms is guilty of spouting “ill-informed rubbish” and “shrill, headline-seeking nonsense”. This includes Crisis, Shelter, the National Housing Federation, the Children’s Society, Citizens Advice, Disability Rights UK, Mencap, Scope, the National Autistic Society, the Royal National Institute of Blind People, Disability Alliance and naturally, that shrill cesspit of communism, the Church of England.

“This month, nine out of ten working households will be better off as a result of the changes we are making.” At the risk of being shrill and ill-informed, what about last month? Or next month? What about non-working households, like pensioners? What about the tenth household in Osborne’s carefully chosen equation? How about some figures to support these claims? A head for detailed figures, terrifyingly, does not appear to be the Chancellor’s strong suit.

“In 2010 alone, payments to working age families cost £90bn,” he said. “That means that one in every six pounds of the tax that working people like you pay was going on working age benefits”, he continued. The written version of his speech circulated earlier, on the other hand, claimed that such payments “cost £75bn” and that this represented “one in every seven pounds”. These two versions are not even internally consistent. The first means that the relevant tax take in 2010 was £540bn (90x6). The second suggests it was £525bn (75x7). The man in charge of our economy is making up figures, give or take £15bn pounds. Let’s hope credit rating agencies were not watching too closely.

Not five minutes later, Osborne went on to mount an emotional defence of the reduction of the top rate of tax from 50p to 45p as “an economic essential”. “In a modern global economy,” he explained, “where people can move anywhere in the world, we cannot have a top rate of tax that discourages people from living here.” As always, it is when you take these arguments from the general to the specific, that their true nature is revealed.

Osborne watched Chelsea play Manchester United on Monday. He saw John Terry, Frank Lampard, Fernando Torres, Robin Van Persie, Wayne Rooney and Eden Hazard do their stuff. The combined wages of these six players are a staggering £1,035,000 per week. These six players – on their wages alone, never mind other sources of income – were handed a tax break of roughly £2.5m next year by the very Chancellor applauding them vacuously. That is roughly 110 teachers; it is roughly 120 nurses; it is roughly 15,000 “spare bedroom subsidies”.

And such premiership royalty are in very good company. While the Chancellor waffled on about how “we are all in this together”, it was announced that the Queen was receiving a 16 per cent boost to her Government grant. Not to sound unpatriotic, but being “in this together” would seem to imply we all have to make sacrifices. It is utterly obscene, at a time of economic stagnation during which the state is imposing untold misery on millions of those who can least afford it, for the person at the very top of the pile to be getting a £5m raise.

That is roughly 220 teachers; it is roughly 240 nurses; it is roughly 30,000 “spare bedroom subsidies” in exchange for the extra reward given to the council tenant with the most spare bedrooms in the country.

It seems, every one of my pennies matters; but not theirs. We’re in it, all right. Just not together.

George Osborne. Photograph: Getty Images

Greek-born, Alex Andreou has a background in law and economics. He runs the Sturdy Beggars Theatre Company and blogs here You can find him on twitter @sturdyalex

Photo: Getty Images
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How can Britain become a nation of homeowners?

David Cameron must unlock the spirit of his postwar predecessors to get the housing market back on track. 

In the 1955 election, Anthony Eden described turning Britain into a “property-owning democracy” as his – and by extension, the Conservative Party’s – overarching mission.

60 years later, what’s changed? Then, as now, an Old Etonian sits in Downing Street. Then, as now, Labour are badly riven between left and right, with their last stay in government widely believed – by their activists at least – to have been a disappointment. Then as now, few commentators seriously believe the Tories will be out of power any time soon.

But as for a property-owning democracy? That’s going less well.

When Eden won in 1955, around a third of people owned their own homes. By the time the Conservative government gave way to Harold Wilson in 1964, 42 per cent of households were owner-occupiers.

That kicked off a long period – from the mid-50s right until the fall of the Berlin Wall – in which home ownership increased, before staying roughly flat at 70 per cent of the population from 1991 to 2001.

But over the course of the next decade, for the first time in over a hundred years, the proportion of owner-occupiers went to into reverse. Just 64 percent of households were owner-occupier in 2011. No-one seriously believes that number will have gone anywhere other than down by the time of the next census in 2021. Most troublingly, in London – which, for the most part, gives us a fairly accurate idea of what the demographics of Britain as a whole will be in 30 years’ time – more than half of households are now renters.

What’s gone wrong?

In short, property prices have shot out of reach of increasing numbers of people. The British housing market increasingly gets a failing grade at “Social Contract 101”: could someone, without a backstop of parental or family capital, entering the workforce today, working full-time, seriously hope to retire in 50 years in their own home with their mortgage paid off?

It’s useful to compare and contrast the policy levers of those two Old Etonians, Eden and Cameron. Cameron, so far, has favoured demand-side solutions: Help to Buy and the new Help to Buy ISA.

To take the second, newer of those two policy innovations first: the Help to Buy ISA. Does it work?

Well, if you are a pre-existing saver – you can’t use the Help to Buy ISA for another tax year. And you have to stop putting money into any existing ISAs. So anyone putting a little aside at the moment – not going to feel the benefit of a Help to Buy ISA.

And anyone solely reliant on a Help to Buy ISA – the most you can benefit from, if you are single, it is an extra three grand from the government. This is not going to shift any houses any time soon.

What it is is a bung for the only working-age demographic to have done well out of the Coalition: dual-earner couples with no children earning above average income.

What about Help to Buy itself? At the margins, Help to Buy is helping some people achieve completions – while driving up the big disincentive to home ownership in the shape of prices – and creating sub-prime style risks for the taxpayer in future.

Eden, in contrast, preferred supply-side policies: his government, like every peacetime government from Baldwin until Thatcher’s it was a housebuilding government.

Why are house prices so high? Because there aren’t enough of them. The sector is over-regulated, underprovided, there isn’t enough housing either for social lets or for buyers. And until today’s Conservatives rediscover the spirit of Eden, that is unlikely to change.

I was at a Conservative party fringe (I was on the far left, both in terms of seating and politics).This is what I said, minus the ums, the ahs, and the moment my screensaver kicked in.

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.