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The day after the Budget…

March 9, 2017

Was it a good Budget?  A significant Budget?  Steady as we go, or radical change?

I’m not sure it was any of those things.  The overall pattern seemed to me to be one of self-imposed constraint – the austerity narrative, as evidenced for example in the soundbite about each family owing £60k+.  As I said on twitter:

In the context of this self-imposed constraint, then there was some tinkering around the edges.  A few million to set up GPs triage units in A&E.  Well yes, but where are the GPs going to come from?  A more radical Budget might have looked to recruit hundreds more GPs by offering to waive their student loans if they worked for a couple of years in these triage units after qualifying, for example.

A few million foregone by postponing the mandation of MTD for businesses below the VAT threshold for a year?  Well yes, but that still doesn’t answer the arguments against mandation in the first place, and makes it even more urgent that the government releases the calculations underlying their ridiculous claims for the tax they think small businesses are having it away with.

Another few million to set up T-levels, to give parity of esteem between technical qualifications and A-levels?  Hmmm… education policy really does need some work on the “parity of esteem” issue, particularly the devaluing of apprenticeships from the genuine qualification for a skilled trade to, well, a different way of describing entry-level call-centre workers.  A bit of virtue-signalling in the Budget isn’t a bad idea per se, but it’s again in the “tinkering” end of the problem-solving spectrum.

The main focus of the press this morning seems to be on the “tax hike on the self-employed”, the 1% increase in National Insurance.  There’s a big issue with employment status, self-employment, incorporation, and limited and unlimited partnerships.  The same thing done by the same people via different legal vehicles can have absurdly different tax results.  But they can also have absurdly different consequences in other ways: rights to sick pay, health and safety requirements, responsibility for National Minimum Wage, holiday pay.  To put it crudely, the argument is that self employed people take more risks and have the chance to make more money, setting the risk of triumph or disaster against the boring security of a weekly wage.  But life is more complicated now: does working as an Uber driver really give the possibility of sufficient reward to outweigh the foregoing of holiday pay and the NMW?  So it’s right that the government should do something to remove perverse incentives from the system: it shouldn’t cost so much to employ someone that you have to strong-arm them into claiming self-employment.  There should, in my view, be a clear choice between security and risk: why shouldn’t a firm have two contracts available, where you can work fixed hours for a fixed salary or take the risks and rewards of delivering a fixed outcome and make your own way towards delivering it?

I gather there will be a consultation.  Let’s hope it covers all the issues, across all the affected departments.  But fiddling about with the NI levels?  Tinkering at the edges.

Finally (and leaving aside all the annoyances in the way the budget documents were actually delivered, a major irritation to anyone trying to work on them but of zero interest to the general public) have a look at this, the “scorecard” of policy decisions  from the budget announcements.  Now, I could be mistaken of course, but I interpret this as the amount the government thinks the things it has announced in this budget will bring in by way of tax etc (the +ve numbers) and the amounts it thinks it will pay out in spending or else in tax foregone or rebated (the -ve numbers).  And doesn’t that mean that this budget will result in a net figure of one thousand seven hundred and ten million extra expenditure in 2017-18?  That’s some tinkering, and some edge.

 

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