George Osborne walks from 11 Downing Street to deliver his first budget. Photo: Getty Images
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Budget 2015: George Osborne steals Ed Miliband's clothes - but the body is still Tory

Ed Miliband got something in the budget after all - but the rest was throughly Conservative. 

George Osborne stole Ed Miliband's most popular tunes, but the record as a whole remained impeccably Conservative. Permanent non-domicile status will be abolished, while there will be a compulsory national "living wage" of £9 an hour by 2020 and 30 hours of free childcare for children aged 3 and 4. 

But beneath those headlines the picture is grim. The rise in the minimum wage to £7.20 is 65p short of the living wage today. The minimum wage is forecast to rise to that level by 2020 in any case. In reality what is being offered is a rebranded minium wage, not a real living wage.

The rest of the budget felt like a lengthy party political broadcast on behalf of the Liberal Democrats' influence in coalition. Cuts to housing benefits for 18-21 year olds will include exemptions for those leaving care but will hit people who, for one reason or another, find themselves ejected from the family home at 18. Those people lucky to be in the five per cent of British familes who pay inheritance tax will, however, recieve a boost in the shape of an increase in the inheritance tax threshold to £1m. 

Student maintenance grants will be converted to loans by 2017-8: students from poorer backgrounds will now have a larger debt burden than their wealthier peers. This is effectively the same as having two 40p rates: a 40p rate for people whose parents were also on the 40p rate, and a 41p rate for people whose parents were on basic rate or below. Working-age benefits - including in-work benefits - will be frozen for four years. ESA will be cut to the level of Jobseeker's Allowance, hitting disabled people both in and out of work to the tune of £30 a week. The benefit cap is lowered again, to £23,000 in London and £20,000 outside of it.

There was one dog than didn't bark: the 45p rate remains uncut. 

 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.

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Theresa May gambles that the EU will blink first

In her Brexit speech, the Prime Minister raised the stakes by declaring that "no deal for Britain is better than a bad deal for Britain". 

It was at Lancaster House in 1988 that Margaret Thatcher delivered a speech heralding British membership of the single market. Twenty eight years later, at the same venue, Theresa May confirmed the UK’s retreat.

As had been clear ever since her Brexit speech in October, May recognises that her primary objective of controlling immigration is incompatible with continued membership. Inside the single market, she noted, the UK would still have to accept free movement and the rulings of the European Court of Justice (ECJ). “It would to all intents and purposes mean not leaving the EU at all,” May surmised.

The Prime Minister also confirmed, as anticipated, that the UK would no longer remain a full member of the Customs Union. “We want to get out into the wider world, to trade and do business all around the globe,” May declared.

But she also recognises that a substantial proportion of this will continue to be with Europe (the destination for half of current UK exports). Her ambition, she declared, was “a new, comprehensive, bold and ambitious Free Trade Agreement”. May added that she wanted either “a completely new customs agreement” or associate membership of the Customs Union.

Though the Prime Minister has long ruled out free movement and the acceptance of ECJ jurisdiction, she has not pledged to end budget contributions. But in her speech she diminished this potential concession, warning that the days when the UK provided “vast” amounts were over.

Having signalled what she wanted to take from the EU, what did May have to give? She struck a notably more conciliatory tone, emphasising that it was “overwhelmingly and compellingly in Britain’s national interest that the EU should succeed”. The day after Donald Trump gleefully predicted the institution’s demise, her words were in marked contrast to those of the president-elect.

In an age of Isis and Russian revanchism, May also emphasised the UK’s “unique intelligence capabilities” which would help to keep “people in Europe safe from terrorism”. She added: “At a time when there is growing concern about European security, Britain’s servicemen and women, based in European countries including Estonia, Poland and Romania, will continue to do their duty. We are leaving the European Union, but we are not leaving Europe.”

The EU’s defining political objective is to ensure that others do not follow the UK out of the club. The rise of nationalists such as Marine Le Pen, Alternative für Deutschland and the Dutch Partij voor de Vrijheid (Party for Freedom) has made Europe less, rather than more, amenable to British demands. In this hazardous climate, the UK cannot be seen to enjoy a cost-free Brexit.

May’s wager is that the price will not be excessive. She warned that a “punitive deal that punishes Britain” would be “an act of calamitous self-harm”. But as Greece can testify, economic self-interest does not always trump politics.

Unlike David Cameron, however, who merely stated that he “ruled nothing out” during his EU renegotiation, May signalled that she was prepared to walk away. “No deal for Britain is better than a bad deal for Britain,” she declared. Such an outcome would prove economically calamitous for the UK, forcing it to accept punitively high tariffs. But in this face-off, May’s gamble is that Brussels will blink first.

George Eaton is political editor of the New Statesman.