Osborne: the only surprise is no surprise
Chancellor reveals little we did not already know
IN MANY senses the only surprise from the chancellor’s autumn statement today is that at first glance it appears to contain… few surprises. Corporation tax is going to be cut: we knew that. Controlled foreign companies legisation will be reformed: we knew that. Intellectual property, research and development: we expected them.
For this the chancellor is to be commended. As Ronnie Ludwig at Saffrey Champness said, this seems a real reflection of the need to maintain fiscal stability. No sudden shocks, no outbursts, no 11th hour policy changes to keep some disparate part of the party or lobby group happy.What a relief. A politician sticking to what he said he would do. Those are rare at the moment.
Start as you mean to go on, and all that, but let’s hope the chancellor can keep it up. The longer he’s in office, the more pressure he’ll come under for bits and pieces here and there to keep someone on side. It’s difficult to know where the greater will come. Lobby groups, or members of his own coalition government.
He has also committed the government to “fewer small changes” when putting together tax policy. That all hinges on your definition of small. What might be small to the Treasury in revenue terms might be shockingly significant to a modestly sized industry trying to make a profit. That’s why a commitment to timely and extensive consultation with business is useful. What might have been more usueful is a fully fledged procedure for consultation published and signed by the government. Otherwise the definitions of “extensive” and “timely” could well slip over the years.
Lastly, what about those GDP growth rates? The Office of Budget Responsibility says 2.1% in 2011 and then 2.6% the year after. That’s impressive. It must also rest on some fairly optimistic assumptions since the full effects of the government’s austerity programme are yet to implemented or felt by the public. What about all those public sector job losses? What about the rise in VAT? We still have a way to go, I’d say, before we can conclude that everything is alright with UK plc.
Lastly, that 1.8% growth for 2010. Completely down to the new coalition government? Difficult to say given Labout were in power until June. Just like a politician to play fast and lose with timings.