Autumn Statement Instant Reaction
If at first you don’t succeed, try, try, try and try again might be George Osborne’s mantra.
The dear Chancellor’s Autumn Statement represents his fourth attempt in the last year to fix the country’s financial problems and the tax system.
It was therefore only the biggest optimists who were likely to believe that he would suddenly crack the conundrum this time around.
To be fair, this was sub-titled a “Spending Review” and that is closer to the mark as tax hardly got a look in but a not-Spending Review might have been even more descriptive, though there was the expected big climb-down on tax credits.
Regular viewers of The George Osborne Show will have become used to smoke, mirrors and bitter sarcasm and all were available in abundance in his English Thanksgiving Special, which felt more like a demonstration of filibustering for the benefit of his parliamentary colleagues than a heavyweight budgetary speech.
It comes to something when a freezing of police funding is cheered to the rafters by one side of the House of Commons because the expected swathing cut has been avoided.
Green Wednesday did not however prove to be nearly as much fun as Black Friday promises to be for most viewers, although there are some proposals that could be of great import in the fullness of time.
On the property front, the Government seems keen to assist the young to get first homes, although the amounts promised may still not bridge the massive funding gap, especially in the South East. There is also a serious risk that when interest rates eventually rise, state-funded loans could disappear down a big black hole.
At the other end of the scale, those buying to let are now attacked on at least two fronts, the removal of loan interest tax relief and a new 3% supplemental stamp duty.
The more cynical might have spotted a new wave of optional precepts. In simple language, rather than eating into its own finances, the Government will allow local councils to raise additional funds. This seems to be more a canny political measure from a man who spins better than Shane Warne than a serious way of alleviating hardship.
On the tax front, there has been as little as this pundit predicted as others feared the worst in connection with their pet schemes. Another freeze – to tampon tax – represented a big headline grabber and makes its own statement about the paucity of excitement in a 65 minute speech.
Otherwise, there is the usual tinkering around avoidance, perhaps best exemplified by an increase to 60% in the potential penalties for breaches of the GAAR (General Anti-Abuse Rule). This is unlikely to re-float the economy, since to date it is not clear that a single tax(not)payer has been caught in the GAAR net.
Perhaps the best news (if you live in Northern Ireland or wish to) is that corporation tax in the province is to be cut to 12½%, perhaps to allow real competition with its neighbour south of the border. Quite how this avoids accusations of State Aid defeats this columnist but maybe you can offer State Aid through corporation tax.
Perhaps the most chilling news hidden in the paperwork was “Better mobile connectivity will also be provided through a pilot scheme on commuter lines in London, the Midlands and the North”. This will make travel even more unpleasant for those of us who regarded the tube as a sanctuary from the curse of the loud telephone caller.
Keep an eye out for further commentary if anything emerges from the small print but don’t hold your breath.