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Half Hezza, half Lawson

Nick Robinson | 09:09 UK time, Wednesday, 23 March 2011

George Osborne doesn't want to go down in history simply as the chancellor who made record spending cuts. He wants to be seen as a great reformer. I'm told that he has his eye on emulating two of the Big Beasts of the last Tory era - Michael Heseltine and Nigel Lawson.

Nigel Lawson and Michael Heseltine

Hezza, you may recall, promised to intervene "before breakfast, lunch and dinner" when he was president of the Board of Trade. George Osborne's activism will include new style enterprise zones designed to attract businesses to areas struggling to grow, more apprenticeships and a new emphasis on vocational education.

Lawson is still revered in Tory circles as the great tax reformer. Today the chancellor will use a little read document produced by his own creation - the Office of Tax Simplification - to promise an era of lower, simpler taxes. The office identified no fewer than 1042 tax reliefs and proposed abolishing a raft of them ranging from tax-free coal for miners to luncheon vouchers and meals on cycle-to-work-days. Much more significant, though, were their proposals to merge national insurance and income tax and review the workings of inheritance tax.

National Insurance - created by an Act of Parliament exactly a century ago to pay for old age pensions - has long since become just another pot of Treasury cash. Gordon Brown raised it to pay for the NHS after the 2001 election and Alistair Darling raised it again to help balance the books after the banking crisis. The fact that it has different thresholds from income tax and is administered by employers in a different way can, it's argued, lead to perverse outcomes and high bureaucratic costs. It also allows for easier stealth tax rises. It will be fascinating to see how far and how fast Osborne the reformer feels he can go.

Osborne will know his history well enough to know that a Budget hailed on the day can turn into one condemned long after. Lawson's boldest Budget - in 1988 - cut the basic and the top rate of tax. It was blamed by many later for fuelling - instead of curbing - the excessive growth of the time. That's a problem Osborne would love to be able to worry about but he will know that his Budget - like that one - is likely to be judged later by whether the chancellor was right to stick to his economic policy or should have taken the chance to change it.

PS Having written the line half Hezza and half Lawson I'm finding it hard to get the image of a chubby short chap with flowing blonde locks out of my head...

Comments

  • Comment number 1.

    Sorry none of these. He will be the Chancellor remembered for trying to turn the clock back to the thirties for the public sector and in doing so stepping on the few green chutes that emerged last year, He better make the most of his 75 minutes of fame today as it could be his last.

  • Comment number 2.

    See, Nick has picked up the very same thing as I have about Osborne - it's all about his self image. If the interests of the UK economy are served by any measures he enacts, that will be mere and happy co-incidence. Looking highly unlikely at this point, it has to be said.

  • Comment number 3.

    DeLong blog 'The Four Horsemen of the Teapocalypse' 2010:

    'Agreeing with Schumpeter was Herbert Hoover's Treasury secretary, Andrew Mellon. In his memoirs Hoover was bitter toward many, but bitterest of all toward Mellon, whom he called the head of the "leave it alone liquidationists." Hoover quotes Mellon: "It will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up the wrecks from less competent people." Hoover opposed Mellon's policies, he said, and worked to undermine them. But what could he do? He was, after all, only the president. And Mellon was Treasury secretary.
    Think Mellon is just an anachronism? Then consider current British chancellor of the Exchequer, George Osborne, and his claim that today's record-low interest rates in Britain are a sign of financial strength and not of anticipated prolonged depression: "The emergency budget in June was the moment when fiscal credibility was restored. Our market interest rates fell to near-record lows." That is pure Mellon. It is definitely not Keynes. It is definitely not even Milton Friedman.'

  • Comment number 4.

    "George Osborne doesn't want to go down in history simply as the chancellor who made record spending cuts"

    Well he better get used to it , because that is where we are . When Liam Byrne left a note on the desk of no 11 saying " We have spent it all , nothing left", he know exactly the mess the next government had to clear up.

  • Comment number 5.

    Osbourne can't be compared to either Hezza or Lawson - he's simply not in the same league. He'll go down as the chancellor who took a promising recovery and turned it to recession with cuts that are too hard, too deep, too fast and too much aimed at the poorer in society. And long may he be damned for it.

  • Comment number 6.

    As an ex Bullingdon clubber he's probably fascinated by the way those geranium pots displayed such boomerang-like qualities.


  • Comment number 7.

    Some bloggers have mentioned that merging IC and NI for employees leaves a situation with employers NI, however, I assume that Employers NI will simply be merged into CT.

    I have'nt seen a salary payslip since around 1975, but I bet the first deduction from the topline number is NOT the Employers NI, which is now an eye-watering 13.8%.

    Employees should understand that this imposition on employers is depriving them, employees, of money that, given free will, enlightened employers might pay to their employees rather than the State.

  • Comment number 8.

    If he wants to go down in history, he could clamp down on tax dodgers.

  • Comment number 9.

    The Social Fund, as you said, was originally intended to provide the brand new State Pension, and has been widened in scope to cover newer inventions like unemployment benefits and the NHS, but I don't believe that means it's ripe for axing. It's there for those reasons and abolishing national insurance contributions which fund it does imply its death. We have witnessed what happens when revenue disappears into the gaping maw of the Treasury, Peter is routinely robbed to pay Paul and messy departmental infighting ensues. If taxation simplification is the name of the game, fine, just make sure the Social Fund remains and gets its fair cut.

  • Comment number 10.

    sagamix..

    keep dreaming

    It's grim up north London...

  • Comment number 11.

    "He wants to be seen as a great reformer." - Nick

    No doubt. But I more get the impression he just wants to be seen, period. And he'll be very excited about today. Why? Well it's Budget Day and he's the Chancellor of the Exchequer. Star of the show.

  • Comment number 12.

    Can't quite imagine George treading all over those green parachutes...it would all be a bit of a comedown.

  • Comment number 13.

    RW49 @ 9 points out that NI was supposed to be a hypothecated tax, that is, one where the monies raised are designated for a specific purpose.

    Unfortunately, politicans generally find it very hard to behave honestly in this regard and soon start to use the monies raised for other purposes.

    And that is the danger inherent in any general purpose tax.

    The ultimate answer is more honest politicans but that seems highly unlikely to happen any time soon, so maybe any hypothecated taxes should have the money raised ring-fenced by law to ensure that it only gets spent for its original purpose.

  • Comment number 14.

    Love your PS Nick Robinson! Very welcome and endearing - you rascal!

  • Comment number 15.

    Budget "hailed on the day"? No chance. Doesn't matter what he announces today, it won't stop the moaning British public.

  • Comment number 16.

    NI and tax changes scrapping IR35 and bringing it in via the back door.

    What about pensioner then paying and extra 10% point in tax or will he raise there allowance ? .

    Would get the fat cats in the city though which will be good

  • Comment number 17.

    46#

    Theres a difference though, Saga. Something you and your Cava supping chums are completely alien to.

    Its called "evidence". Be it factual, be it scripture, be it even anecdotal. Claiming otherwise is just dogwhistling. The one thing the left is exceedingly good, nay, world class, at.

    58#

    What would you prefer me to call them then?

    Do you have a politically correct name for the sink estate dwelling masses that were abandoned to the BNP once their votes had been parted from their grubby paws?

  • Comment number 18.

    Fubar...

    'you and your cava supping chums'...

    that'll have sagamix choking on his focaccia this morning...

    it's grim up north London...

  • Comment number 19.

    IR35@16

    I am a great believer in transparency where taxation is concerned - if Tax and NI are combined I am sure there are ways of dealing with the effects on pensioners through tax allowances.

    NI has been the hidden tax that many workers think is set aside for the NHS and pensions, they fail to realise it just goes towards the general tax pot. Far more honest to be upfront with tax.

    Taxation is a necessary evil, time we were all a bit more grown up about it.

  • Comment number 20.

    Fubar @ 17
    Do you have a politically correct name for the sink estate dwelling masses that were abandoned to the BNP once their votes had been parted from their grubby paws?


    >>

    If you were one of them, how would you like to be referred to?

    Or can you not imagine being one of them?

  • Comment number 21.

    Pretty much confirming what I always thought.

    The destruction of the economy and public services is not about a shortage of money. This is about ideology.

    Bertie Wooster has some delusional aspiration about being a great historical tory pin up boy .... and millions of us are paying the price for his floundering attempts to achieve it.

  • Comment number 22.

    Fubar @ 17

    Mmm, first time I see you table any 'evidence' (that Labour deliberately hold people down because they're scared they'll vote Clown if they get successful) I'll ring a bell - a loud one which people will be able to hear. So unless they're hearing it, you can assume you haven't.

    Can you hear any bells, people? You can't? Ah right.

    Sorry, Fubar.

    As to this 'abandoning' council estate dwellers and the like: If you're saying Labour didn't do enough to advantage the poor, I agree with you. But you're not saying that, are you? You're just using the topic as a peg on which to voice your contempt for the people at the bottom of the pile. It's like you get your antipathy for the poor and your antipathy for the Labour Party (and indeed for left-wing political views generally) mixed up in your own head and it all comes out in a high entropy gush. Of (reactionary) mush.

    Stop gushing mush, Fubar.

  • Comment number 23.

    "11. At 10:37am on 23rd Mar 2011, sagamix wrote:
    "He wants to be seen as a great reformer." - Nick

    No doubt. But I more get the impression he just wants to be seen, period. And he'll be very excited about today. Why? Well it's Budget Day and he's the Chancellor of the Exchequer. Star of the show."



    Don't get TOO jealous Saga. You're star of your own little show. Every day. In your own little lounge. All by your own little self. Whilst other people with get up and go are out doing things....

  • Comment number 24.

    "15. At 11:16am on 23rd Mar 2011, mambo-italliano wrote:
    Budget "hailed on the day"? No chance. Doesn't matter what he announces today, it won't stop the moaning British public."

    be fair, "moaning left-wing nay-sayers"

  • Comment number 25.

    23#

    HIS own lounge? His mums more like. His own phone box, more like!

  • Comment number 26.

    22#

    You'll never hear ANYTHING whilst you've got your fingers in your ears mate. Especially stuff happening outside of your own highly gentrified borough. Even in Swindon.

    Second part of your post is highly telling. Its not my contempt for those at the bottom of the pile - I was born and dragged up in the fag-end part of Coventry on a council estate to a single mother in a 2 up 2 down council house which had 5 adults in it already, remember, not to semi-privilege and plenty in an affluent London borough like you - I dont have contempt for them, I'm FROM them - the contempt I have is for self appointed political "elites" like yours who only want to (for want of a better word) con them out of their votes by pandering to their prejudices whilst doing next to nothing for them in return.

    You think you can play to their prejudices - and yours - by implying that I have no time for them, that I dont care a fig about them and that I have no idea what they are about, what they are up against and how hard they have to work to succeed. A highly typical lefty tactic. It gives mind to an image of a child abuser being given the keys to a nursery saying "dont worry, the little darlings will be safe with me..."

  • Comment number 27.

    Out of work? you done
    In work? your done too
    And Nick, you are OK with your cushy BBC job, cosying up to the Tories.
    I can hear the crowd singing ' Who's the Tory in disguise'
    The guy as no idea how to manage the economy and millionaire ministers just don't care.

  • Comment number 28.

    You couldn't be more wrong (at 23) even if you were completely wrong, Andy. I am not in any way at all confined to my 'little lounge', I have a high spec device (laptop?) which allows me to contribute vibrant progressive analysis on here at the same time as getting about my other business. Right now, for example, I'm thinking about Osborne's budget (and what a nonsense it's bound to be), chatting to Jeremy, buying a pomegranate to nibble on later, and also typing this. Posting it too.

  • Comment number 29.

    17. Fubar_Saunders:

    58#
    'What would you prefer me to call them then?'

    If you are specifically referring to benefit fraudsters then call them that, but it sounds like you are denigrating all those that for one reason or another live on or below the breadline or claim unemployment benefits, lumping into a class which is beneath contempt.
    Can't see any difference from the contempt shown by some on here to those born into wealth or privilege. As you would say, pot, kettle, black.

  • Comment number 30.

    "PS Having written the line half Hezza and half Lawson I'm finding it hard to get the image of a chubby short chap with flowing blonde locks out of my head..."

    Stop going to Stringfellow's after work then Nick.

  • Comment number 31.

    20#

    I USED to be one of them, pd. Maybe not quite sink estate, more perhaps cloakroom hand-basin, but nonetheless, as explained to The Honourable Member for Hampstead earlier, hardly in the same league as him.

    I got the hell out. Got myself an education, got myself a job and never looked back. And if I can do it without any financial input from my parents any different to anyone else, so can they.

    Mind you, when I was young enough to live there, I dont recall the standards of ambition, desire to succeed, willingness to work and make sacrifices to succeed being quite as low as what they've plumbed over the last decades. Maybe there wasnt such a big state teat to suckle on for quite so long back in those days.

  • Comment number 32.

    Fubar @ 26

    Well first off, I live in Hampstead now and I'm not hard up, but I wasn't born into this scenario. Far from it. Okay I wasn't born in a cross-fire hurricane, and I didn't howl at my Ma in the driving rain - like you - but I'm from a street not an avenue, the first person from my family to go to uni bla bla and all that good stuff.

    But let's not get into the 'I'm more working class than you' game, it's silly, especially on here where we're all just words on a screen. No, let's have a challenge instead.

    As follows:

    You say Labour didn't do enough for the poor. Fine (as I told you, I agree, if this really is your point), so give me a couple of big things they should have done - to advantage the poor - which they didn't. And I'll see if we get a match.

  • Comment number 33.

    Great opportunity for George to showcase his progressive credentials. It should also highlight exactly how much influence Vince Cable and Nick Clegg actually have in this administration.

  • Comment number 34.

    29#

    I refer the honourable gentleman to the answer I gave some moments ago to Sagamix. And others.

  • Comment number 35.

    Watching him now. Doesn't seem to be loving it quite as much as I expected he would. He's having throat trouble - maybe it's that. A shame if so, since this is no normal Wednesday; it's Budget Day and he's the Chancellor of the Exchequer.

  • Comment number 36.

    32#

    Not necessarily mate, why should I let you dictate the pace? You - and a couple of others - half accused me of a tory squirearchy-type baby eating tactic of sneering at the plebs, rather than those who seek to exploit them.

  • Comment number 37.

    Fag end estate?

    Luxury. I was brought up in a puddle - and I had to share that......

  • Comment number 38.

    S@32

    Born under a Bad Sign? On the Bayou? To Run? In the Fifties? To Be Wild? On a Horse? On Christmas Day? ...Free?

    All of the Above?

  • Comment number 39.

    S@35

    Is he wearing his wife's knickers?

    (Apologies to A&M)

  • Comment number 40.

    Well if this means Osborne falling out with Cameron, like Lawson with Thatcher, and then resigning, then bravo! It's difficult for any objective person to make sense of these sentimental comparisons. Lawson was as disasterous as any of the post-war Tory inflationist Chancellors - Heathcote-Amory, Maudling, Barber all having similarly stoked inflationary booms leading to ever bigger busts (and not the Dolly Parton sort). If cutting the top rate of tax from 60% to 40% and abolishing double-mortgage tax relief makes you a great tax reformer, heaven help us. It was a turning point in entrenching the wealth of the top 5%, while his cuts in interest rates in the run up to the 1987 election stoked a house-price bubble and inflation rising to over 10% which had to be "cured" by interest rates of 14% by Spring 1990. Lawson gambled with the economy, and wrecked it - the UK had the worst recession 1990-2 of any G7 country. So, ok, maybe the comparison with Osborne is starting to look plausible....as for Heseltine, he has long been a persona non-grata (like Ken Clarke) with the Tory grassroots for refusing to go along with the euro-hate which gets most Tories' bile ducts working flat out.

  • Comment number 41.

    37#

    I was trying to think of a different phrase for sink estate that he might recognise. I thought of and then discounted "Cloakroom Washbasin", "breakfast bar" and "bidet", before settling for the option that I did. Figured it would have a particular resonance in his part of the throbbing metropolis.

  • Comment number 42.

    38#

    Very good, very good!

  • Comment number 43.

    Blame @ 38/39

    It wouldn't surprise me if he was. Not visibly though, clearly didn't have the courage - the self belief - for that.

    Patrick Hernandez, 'Born To Be Alive' - a massive hit in France and all over the continent. That's the one I'd go for, since it's unarguable.

  • Comment number 44.

    Fubar @ 41

    Three points:

    1. The 'pdavies65' construct (who you were writing to) doesn't live in the metropolis. Lives in David Cameron's constituency.

    2. Please stop going on about 'sucking teats', it's putting me off my stride.

    3. And this is the serious one: You have yet again collapsed in a heap when challenged. I accused you of blatant, deeply hypocritical stone-throwing from a glass house for attacking as cliched 'class warriors' people who opine that the Tories are for the rich, when you yourself are afflicted with the absurd cartoon view that Labour deliberately hold down the working class in order to get their vote. You mentioned 'evidence' and have produced (as always) none. I further asked you to give me a couple of examples of big things you feel Labour should have done IYO - to advantage the poor - but which they didn't. You know, to support your assertion that they were 'abandoned to their sink estates'. No reply.

    You thus remain tagged as a hypocrite who is prone to irrational sentiment-based claptrap.

    And extremely right-wing, I sense.

  • Comment number 45.

    Saga, we are forever asking you to back up what you say with substance. You never ever, ever, ever do. Now you know how it feels. And I did say that I wasnt going to be led off down a different path by your agenda. Thats happened too many times before and I am not falling for it again. This time you can be the one who reacts.

    And if I am indeed a "hypocrite who is prone to irrational sentiment-based claptrap", then I can only reasonably conclude that I learned it from the master of the art... your good self.

    Its not an absurd cartoon view Saga. Its a deeply held one. Its not my place to tell Labour what they SHOULD do -how is someone who is fundamentally opposed to Fabianism meant to provide ideas for them? - but I am more than entitled to critique what they DID do.

    As I have said on many many occasions, the soundbites do not necessarily match the delivery. "Education Education Education" turned into lowering the standards into Prizes For All, allowed the continuing hypocrisy of Labour politicians decrying private schools whilst sending their own to them, not to mention the divisive rise of the faith schools. The rampant use of PFI, the inability to manage contracts, service delivery, to run projects in virtually any sphere, politicisation of government departments, doubling of tax on the very poorest overnight, the 60p pension increase, Surestart, whilst being a good idea, hardly being targetted at those who needed it most, but instead being allowed to be taken over by the sharp elbowed middle classes, who have recognised its value - its not necessarily down to the ideas, its down to not having a clue as to how to make it work.

    Not to mention all this 24 hours to save the NHS garbage and look at where we are now. Billions spent and we're still being killed by the same diseases that we were 13 years ago, in addition to MRSI, CDiff and all the others. Whilst those at the very sharp end do try their hardest, they are constantly undermined and let down at so many other layers...

    And, if suppressing any debate on immigration for over a decade and then telling the very people who voted for you in the first place that they are bigots and that theres nothing for them to worry about - if that is not abandoning them to extremist parties (who funnily only flourish when Labour is in power), if that is not shoving your fingers in your ears and not listening to them, then I dont know what is.

    Labour dont give a monkeys for the lower classes. They havent done for over 60 years. The only thing the party are interested in about the poor is their votes.

    As is usually the case with Labour, it is so much easier to list the things that they got spectacularly wrong, despite sometimes having (questionably) good intentions, than it ever is to say what they got right. Which in the whole of their 13 year term is precious little. I can only think of two things, if I'm pushed. And thats FOI and Civil partnerships, showing how much we've moved on from the bigoted homophobia of the 1980's.

    Everything else has been an unaffordable unmitigated disaster.

  • Comment number 46.

    Fubar @ 45
    You forgot the minimum wage, opposed by the opposition at the time but now generally regarded as a Good Thing.

  • Comment number 47.

    Fubar @ 45

    Yes yes, I’ve heard all that before from you. You write quite well (at times) but can’t you see what a ridiculous view that is of one of our great political parties? We only have two for heaven’s sake, so you can’t completely write one of them off like that. Totally cock-eyed. Just as absurd as the view (one I don’t share) from the opposite end of the spectrum that the Conservative Party are out only to line the pockets of the rich. Worse, in fact, since at least that carries the implication that they are at least interested in benefiting one section of society. Labour, per you, are concerned only with power for themselves. Power for power’s sake – Orwell’s vision and all that.

    C’mon.

    I mean, look, I’m no lover of – say – the Thatcher/Major government but I can easily come up with half a dozen (ish) significantly beneficial (ish) things they did in their 18 years. And here’s you reckoning just 2 – TWO! – achievements in 13 years of Blair/Brown. As I say, c’mon.

    And, yes I have noticed, you’re still stuck with a position of asserting that Labour abandoned the poor, but being at the same time totally unable to give any examples of what you think they should have done in this regard – to advantage the poor – but didn’t. Not a respectable position to be in. And rather painful too, I’d have thought.

  • Comment number 48.

    Oh dear tax and NI combined, no doubt some software systems company will make a fortune cocking up the systems needed to collect the combined tax. Look at the performance of HRMC over the past few years, now they will have even more to make a mess of. How often reforms become a millstone around the neck. After all the Lawson reforms didn't seem to make that much difference, other than in the minds of the political pundits.

  • Comment number 49.

    notfooledsteve @48
    Yes steve, can see how you got your name. Similar to deficit reduction really. Everyone is agreed we want to do it but not everyone is convinced that George's plan will come to fruition or even if it does that the cost will be worth it.

  • Comment number 50.

    47#

    Come on then Saga. If you can think of so many success stories over the last 13 years, things that have been universally acknowledged as real positive improvements/changes that New Labour brought in, lets hear them. Notice, I did say that it wasnt for the lack of ideas sometimes where NL were concerned, the huge problems were the Laws Of Unintended Consquences and the abject failure to implement and deliver some of these ideas.

    Anyone can brainstorm, but getting stuff off the magiboard and turning it into a deliverable is a different matter altogether.

    PD, I may well acknowledge the minimum wage. At the time, I readily admit to being slightly - ever so slightly curmudgeonly in refusing to be led off the path of what I was talking about by Saga. Seen this stunt of his before y'see.

 

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