Budget 2016: The Illogical Sacrifices to The Altar of the Surplus

By Jade Azim / @JadeFrancesAzim


Today’s budget is, as expected, an assault on the most vulnerable, coated as a supposed essential step to delivering a surplus that is neither particularly needed nor exceptional in British political history.

The most extraordinary characteristic is that of the raising of the PIP threshold, which will see around 200,000 disabled people have their money taken away from them. And this will be presented as a necessity, and those recipients as sacrifice, for said alter. But, ultimately, the PIP cuts represent a transfer of wealth whereupon they pay for the Capital Gains and higher income tax cuts for the very wealthiest –hardly a glowing plan for inequality reduction. Inequality reduction that will ultimately be needed for a balanced recovery and deficit reduction.

But because Britain continues to be blighted by such inequality –namely as a result of this rigid, ideological, illiterate and dogmatic approach to the deficit, growth has been revised down -again. Osborne’s debt target is to be missed –again, and there will be £38.5bn more borrowed than planned. Osborne’s future projection for a surplus of over £10bn in 2020 with a projected deficit of £20bn in 2019, in light of this, is likely a complete fantasy. This is because wages continue to slow and consumers continue to feel the pinch. The only thing fuelling measly growth is household borrowing and debt. A recovery built on sand, indeed.

Perhaps the saddest part of this, however, is Labour’s continued deficit on economic competence despite the explicit and obvious failure of Osbornomics. When will it start to matter if Osborne breaks rules and misses targets? That’s a question Labour needs to find a solution to straight away, otherwise these failures won’t matter one bit.

The problem is, unfortunately, that the sacrifices to the alter, even if it is a fantastical alter, are sacrifices that the Tories can afford to make, even if the rest of us can’t. Make no mistake, this budget was the budget of Middle England; Nuneaton Man; White Van Man. It has constructed ever higher the Tory barbed wire fence that guards the parameters of the swing constituencies we need to win back. His championing of SMEs, the self-employed, and middle-earners should concern us tremendously.

Of course, there is an innate unfairness to the winners and losers of this budget. Not least that the ‘middle-earners’ he supposedly champions are in fact the top 7-15% of the population. And that this unfairness prevents, as said before, a balanced recovery. This link between economic fairness, inequality, and growth is already well-documented; even over at the IMF.

But Labour must resist making the critical –and easy- mistake of responding to the budget based on moral judgement alone. Strident inequality –the by-product of six budgets of Osbornomics- is not just a moral issue: it’s a practical issue; a symptom of bad economics. Osbornomics is illiterate, and it is a danger to growth, not a creator of it.

The national debate boxes us in – a surplus is not particularly significant or essential, true, but it remains the end of the story that the Tories have neatly constructed. Thus arguing against it after years of a very long-term economic plan that now seems a matter of normalcy and common sense is futile. McDonnell picked up on this with his fiscal plan. Balancing the budget has become the desire of the British people. This has been the weapon that prevents the formation of Labour governments post-crash, but it is also an end that Osborne’s story has yet to reach and, seemingly, will never reach. It is now up to Labour to make the case that choosing the sacrifices to this alter that Osborne does –and handing the revenue to the wealthy- will not lead us on the road to the surplus. This is more than fairness; this is logic. In fact, the two cannot be detached from one another. Fair priorities and spending plans lead to the logical conclusion of an economy built on more than low wages and debt, and as a consequence low growth.

Inequality, as the result of Osbornomics, is ours to own, and ours to transform into a subject of debate about how best to eliminate to reach that precious alter that is a surplus. Fairness should be at logical argument for Labour to make post-budget, and an ambitious one on the road to the end of this national story.

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