Osborne’s bold gamble
When George Osborne first became Chancellor I was envious. I don’t usually want to be in charge of the nation’s finances (even the tiniest bit), but when he announced his emergency budget in June 2010, I said that I would like to be him “for one week and one week only”. Why? Because, given the economic car crash that was Gordon Brown’s government, he found himself with a platform from which he could make proper, bold changes to the way Britain’s finances work.
I don’t envy him anymore – who’d want to be sitting atop an economy running non-stop multi-billion-pound deficits, rising unemployment and 5%-plus inflation? But I am nonetheless still reasonably impressed. He has stuck to his guns on what the FT calls his “audacious” mixture of tight fiscal policy and loose monetary policy. That’s despite having to downgrade his growth forecasts; despite the (perfectly reasonable) pressure on the Bank of England to raise rates now that consumer price inflation has hit 4.4%; and despite the growing popular awareness of falling real incomes. That’s quite a gamble.
However, among all the details he announced something well flagged but still interesting – the possible merging of national insurance (NI) and income tax.
• Read the full editor’s letter here: Osborne’s bold gamble