Osborne does it again

Whether or not you think Oxbridge is a meritocracy Eton College clearly is not. The fees are an eye-watering £11,907 per term. This does not include extras, like the cost of the uniform and music lessons. There are three terms in an academic year. One must allow for well over £35,000 per annum to even contemplate sending a child to a school like this. The fees alone vastly exceed most people’s annual income.

What do parents get for this investment in their offspring? On average one in three students will go on to attend university at Oxford or Cambridge. Half of this government’s cabinet, twenty-six percent of all MPs in 2015, went to Oxbridge. The route to power is well signposted. Rupert Harrison, chief of staff to Osborne 2006-2015: Eton and Oxford.  David Cameron: Eton and Oxford. Boris Johnson: Eton and Oxford.  So if you want to run the economy you would do well to go first to Eton College, and then to Oxford University, and to do this you will need to have parents who can afford to spend at least £35,000 a year on your secondary school education. (George Osborne, St Paul’s and Oxford. The fees at St Paul’s School are much the same as those at Eton College.)

Why mention all this?  George Osborne has just produced a budget by millionaires for millionaires.  Three months ago, faced with a near rebellion in his party, as well as with total outrage in the country at large, Osborne boasted of moving from ‘austerity to prosperity’. He used this as an excuse to do a last minute U-turn on his miserly policy of cutting tax credits for the working poor. In the budget today he announces tax handouts to those on above average incomes, raising the band for the highest rate of income tax to £45,00o, cutting corporation tax to just 17%. It is very clear that these tax breaks will benefit the lowest paid the least. For the lowest paid any rise in post tax income will lead to a loss of in-work benefits. The benefit is an illusion for the lowest paid.

There is a ‘smoke and mirrors’ attempt to massage the figures. However, most serious commentators, even those who broadly support the government, say the evidence of Osborne’s failure to meet even his own targets is clear. As Corbyn described it today in parliament, Osborne has failed on budget deficits, failed on debt, failed on productivity, failed on growth, and failed on investment.

The incidence of the government’s so-called ‘austerity measures’ has been unevenly distributed. The least well off, young adults and those in the north of the country, have fared much worse than all the rest. Squalor, overcrowding, disease and disproportionately low life expectancy in deprived areas are ever more apparent and shocking. Soup kitchens and sleeping rough have become everyday facts of life in Britain in 2016. Surely this is not what we wish to see for this country. Ultimately the vast majority will suffer from the degrading of public services, the lack of infrastructure investment and the social divisiveness that results.

The government has a new scheme to encourage the young to save. For every £4000 saved by those under 40 in a year, the government will top it up by another £1000. Surely Osborne must be aware that for many young people saving like this is out of the question. The young have high debt levels, high rents, low wages and insecure jobs. Only the better off will be able to benefit from this scheme.

The chancellor’s cuts to capital gains tax, corporation tax and income tax offer a bonanza to the better off while the parallel ‘austerity’ response of the government will be to continue to privatise public services and to reduce welfare spending. All of us need to be aware that it is the 99% who suffer and the 1% who gain in the long run, as modern, pre-eminent economists, such as Piketty have shown. Privatisation offers speculative buyers a cash cow while stripping back many of the benefits afforded to the public in the provision of services such as energy, water, sewerage, transport, health and education.

While everyone likes to see their own tax rate fall, we need to consider whether we are prepared to see ever-increasing relative poverty in the economy and a decline in public services. The chancellor has given away a party bag full of rat poison disguised as attractive tasty treats. Eton and Oxbridge is the pathway to high office for families those who can afford to take advantage of it. Perhaps it should be no surprise that such training leads only to ‘rates for mates’ and bitter medicine for the rest. While reducing public health programmes Osborne has announced the introduction of a new tax on sugary drinks in 2017. Osborne is clearly hoping this sweetener will steal the headlines and hide the reality of his poor record on the economic fundamentals.

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