Jim O’Neill wonders when the opprobrium dished out to George Osborne is going to find its way to John Swinney, and has a few questions for the man who would be Scotland’s Chancellor.
“What do you have to do to get sacked?” John Humphries asked the Chancellor the day after his budget unravelled – not after it had been assessed, but as he spoke.
Osborne had set three fiscal test for himself. In this Budget alone he broke two of them and the OBR said that the third would be broken if the magic trick planned for 2019-20 didn’t work. After predicting a £27bn surplus only 4 months ago, the blessed Gideon had to admit a black hole of £54bn had opened up.
Of course he tried to hide this with lots of giveaways to the well off, and then tried to pass himself off as the saviour of the nation’s children with his sugar tax. What he didn’t do was identify where the cuts were going to come from to pay for this.
Some of the best fun I had when working for an MP was getting my hands on the Red Book the day after the Budget to find out where the bodies were buried. I know, I should get out more, but even Gordon Brown was guilty of this at times. That said, I cannot remember him breaching his own 5 fiscal rules at any time as Chancellor. And Osborne has breached 2 out of 3 in one day!
Helpfully Stella Creasy MP and her team had identified £4.2bn of cuts to disabled people’s benefits, even though Osborne had only made the case for £3.5bn of cuts in his statement. Clearly the rest was for sweeties for Tory friends.
As a result, allegedly, Iain Duncan Smith resigned from the Cabinet. Given his record over the past six years, his newly found conscience looks like a cover for other internal party maneouvres. Fair is foul and foul is fair in Tory politics.
So what did Osborne do? After noting he was cutting £650m from international aid, since public spending was being cut, he then cut corporation tax and stamp duty, increased insurance premium duty, froze fuel, beer, cider, and spirit duties and finally introduced the sugar tax, which, I am sure, will be portrayed by followers of the SNP as yet another betrayal of Scotland since we are all addicted to Irn Bru (other fizzy drinks are available).
But this year, for Scotland, the rules have changed. As a result of the passing of the Scotland Bill, the Scottish Parliament will in future set all tax rates. Despite every effort by Kez at FMQs, Nicola would not confirm that the SNP would reverse these benefits for the well off, putting off any response until a statement this coming week. We have to wonder how detailed their plans will be, after Labour were unequivocal in saying that we would reverse the tax breaks.
But there are other decisions that do not need any such delay. Yet the silence from the putative Chancellor of Scotland was deafening.
- The SNP had said they wanted to undercut England on Corporation Tax. Osborne cut Corporation Tax. Does this policy still stand?
- Swinney also changed the Scottish Stamp Duty to undercut England. Osborne has cut Stamp Duty. Is Swinney going to go further?
- There are also consequentials as a result of Osborne’s new spend on homelessness, infrastructure, flood defences and education. What are they going to be used for?
- Finally, the take from the Sugar Tax will be spent on kids’ sport and fitness in England. Is John Swinney going to do the same in Scotland?
I put all these points to Chic Brodie, the SNP MSP who hosts Irvine Beat’s Sunday Talk-In. First he said that he did not know what was going to happen, then he repeated Nicola’s mantra four times “there will be an announcement next week”. I promised him I would be back next week to comment on the announcement.
Maybe, given Swinney’s record of fiscal prediction shown in his Independence Budget and his continual passing on of Osborne’s austerity, in particular to local authorities, maybe it’s time for Mr Humphries to ask John Swinney: “What do you have to do to be sacked?”