UK Politics

Can bingo help George Osborne hit Budget jackpot?

Robert Halfon
Image caption Tory high command feels Rob Halfon gets to parts of the electorate it finds it hard to reach

In Downing Street they call it the Halfon-meter.

It calculates how much money the Conservative backbench MP for hyper-marginal Harlow, Rob Halfon, is costing the government.

He carried out a successful campaign to freeze fuel duty until after the next election.

Now the Essex MP is at it again.

He feels he is in touch with the type of voters who might not see themselves as natural Tory supporters but who (or whose parents) a generation ago were won over to the Conservatives through policies such as the right to buy their council home.

Image caption Bingo-lovers will be watching closely for a bit of good news, as the chancellor delivers his Budget

It might not have quite the same resonance, but this year he is calling for a cut in bingo tax.

George Osborne may yet reward him in the belief that he has his fingers on the pulse of those who are not posh.

And the chancellor himself will proclaim that those on low incomes are his priority as he announces another increase in the income tax threshold. From April tax will not be paid on the first £10,000 of income.

That was a Liberal Democrat election manifesto commitment, so Mr Osborne will announce that the threshold will rise even further next year, so he can have his share of coalition credit.

He will also reinforce the message that it is worth working, even if it is a bit of a struggle, by announcing the level of his welfare cap - though this will exclude state pensions and the cost of Jobseeker's Allowance.

Image copyright Getty Images
Image caption George Osborne is keen to ensure Labour is not given the benefit of the doubt by voters
Image copyright PA
Image caption But Ed Miliband says he and his team are ready for another go

But the chancellor is likely to disappoint those further up the income scale, and in the process some of his prominent colleagues.

When one former Conservative chancellor criticises your tax plans, that could be seen as a misfortune. When a brace of them express concerns, that could be seen as carelessness.

Lords Lamont and Lawson have pointed out that more than five million people have been brought in to the 40% tax rate - compared with one million when it was introduced in 1988.

'Sweet spot'

There may be some assistance offered at the margins, by not taking quite so many earners in to the top band as in recent years. But the chancellor and his Lib Dem colleague, Chief Secretary to the Treasury Danny Alexander, have been making it very clear that the priority for any tax cuts will be those on lower salaries.

So it seems that, for this year at least, no one will get a return ticket from the higher tax band unless their income falls.

But the campaign for middle-class tax relief demonstrates that this Budget - just over a year from the election - will be seen mostly through the prism of politics, not economics.

Image caption Nigel Lawson is unhappy about income tax going over 40% for anyone
Image caption So is Norman Lamont

Mr Osborne believes he is in a political "sweet spot".

The economy is recovering, but has not fully recovered yet. In fact, he is only about half-way through his programme of cuts.

Had the structural deficit been eliminated in line with his original timescale - that is, this year - voters might have decided they could afford to back a party that was promising to spend more.

But he is now able to say that tough decisions lie ahead so, in his words: "Why give the keys back to the people who crashed the car?"

In other words, don't let Labour ruin an improving economy.

Living standards

But Conservative backbenchers and peers are not so confident.

Labour leader Ed Miliband has been banging on about the "squeezed middle" - but Tory MPs know that even some of those in the top 10% of earners do not regard themselves as well off and are feeling the squeeze, hence the fuss over 40p.

Mr Osborne will make all the right noises on tax, telling his colleagues what he would like to do when unshackled from the Lib Dems, but he will admit his room for manoeuvre is constrained this side of an election.

He will talk about creating a resilient economy, boosting business by cutting corporate taxes, increasing investment allowances and reducing - in some cases - employers' National Insurance contributions.

But many on his own side, pleased by the economic news, still worry that their own voters will not be resilient in the face of what feels like falling living standards.

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