Economy//

Show and tell, George

Written by: David Clark on 23 March, 2012
Filed under Economy

Rarely has a budget been as universally panned as the one George Osborne delivered on Wednesday. Surveying the headlines of the last two days must have been a galling experience for the Chancellor. Excoriated by the Sun for failing to cut fuel duty and by everyone else for being beastly to the elderly and generally failing to support economic recovery, he must be wishing he could press the rewind button and start again from scratch. Even the Institute for Fiscal Studies, which has somehow managed to become part of our unwritten constitution, is on his case, suggesting that he may have got his sums wrong.

Ministers insist that they are taking from the rich and giving to the rest, but nobody is buying it. Polls show that the public regard the budget as unfair and oppose its headline measures to abolish the 50p tax rate and fund it with a tax rise for pensioners. In the popular imagination Osborne is the Chancellor who mugs little old ladies to fund tax cuts for wealthy bankers. Indeed, the ‘granny tax’ may well end up doing for him what the 10p tax rate did for Gordon Brown, by causing permanent damage to his reputation for political judgement and fiscal competence.

Osborne’s standing with colleagues looks set to plummet as a result. The Conservatives appear to have taken a hit, falling to their lowest rating in the daily YouGov poll since November. No wonder ministers have turned to alcohol – or at least an announcement about alcohol – to help them forget. This is about as toxic as it gets for a party already seen as out of touch.

The silver lining for Osborne is that the furore over the ‘granny tax’ has drawn attention away from the awkward question posed by Ed Miliband on Wednesday, and for which there is still no satisfactory answer – to what extent will he and his cabinet colleagues benefit from the tax changes made in the budget?

So far they have hidden behind the collective line that ‘tax is a private matter’. That should certainly be the case for private citizens. It should also be the case for public servants when no conflicts of interest are involved. But when public servants make tax decisions from which they benefit personally, we should have a right to know. Just as parliamentarians speaking in parliament are obliged to declare any relevant interest, ministers taking decisions that affect our financial affairs should also tell us how those decisions affect them.

In the United States it is now standard practice for candidates running for president and many lesser offices of state to release their tax returns for public inspection. Should we not expect the same of politicians who force those at the bottom and middle of the income scale to pay for the mistakes of those at the top? They say ‘we’re all in it together’. I’d like them to prove it.

Osborne claimed on the Today Programme yesterday that he is not in the 50p tax bracket of those earning £150,000 or more. But Political Scrapbook and Polly Curtis have had fun testing the plausibility of this claim. In addition to his ministerial salary of £134,565 he also earns an undisclosed amount of rental income from what appears to be a very swanky property in London. It seems highly unlikely that the combined total would come in below the top rate threshold. So how does he do it?

As Angela Eagle wryly put it: ‘We were all astonished to learn from the chancellor that he was not a top-rate taxpayer. The hunt is now on for the name of his accountant, who will surely find himself in spectacular demand.’ There are, as it happens, a few dodges he might be deploying, including deducting refurbishment costs and transferring part ownership to his wife. But as Osborne said in his budget statement: ‘I regard tax evasion and aggressive tax avoidance as morally repugnant’.

So we are faced with the possibility that the Chancellor is either a fibber or a hypocrite. There is only one way to clear the matter up, and that is for him to do what even Mitt Romney had to do in the end, and publish his tax return. Show and tell, George. Show and tell.

David Clark is Editor of Shifting Grounds.