Thursday 20 March 2014

Why 2014 was a historic budget (it isn't what you think)

In my rapidly receding youth, Budget Day was a bit like the Grand National or the FA Cup Final.  You half expected the Chancellor to be led from his paddock while Jimmy Savile was being dragged out to lead everyone singing 'Abide With Me'.

These days, most of the budget is leaked in advance and doesn't amount to more than a few tweaks here and there, and then there is the Autumn Statement and the Mansion House Speech and all the rest.

The Budget is important, but somehow not the spectator sport it once was.  I remember people crowding round the windows of the TV shops to watch.  We have Blackberrys and iPads these days, but I'm not sure we are glued to them for the Budget as we used to be.

Part of this is that, actually, it isn't very disputed.  Despite the sound and fury from Balls and his colleagues, Labour is not committed to doing much different.  There is no great divide in Westminster these days.  The divide is between Westminster and the rest (exemplified in the strange Conservative bingo poster yesterday).

But actually I think the 2014 Budget will be recognised as a key turning point.  George Osborne may have chosen the words "makers, doers and savers" because they sound conservative in the best sense (and they do) - but the very idea that budgets are supposed to support makers and doers is mildly revolutionary.

This particular budget may not actually have helped them that much.  That's not the point I'm making.  The point is that it has been accepted wisdom since Geoffrey Howe's first budget in 1980 that budgets are supposed to support speculators, wealth-creators and lenders.  That was the logic of trickle down.

Osborne's support for makers and doers is an explicit new direction for conservatism, away from the idea that financial services was the key to the economy, the great mistake at the heart of the Lawson and Brown years.

In fact, I am comforting myself that Osborne has in fact been reading my book Broke: How to Survive the Middle Class Crisis, where you will find a pre-emptive defence of the budget.  Especially its support, against the imprisonment of the middle classes by the big insurance companies, for the changes to annuity regulations (Steve Webb's important contribution).

It is still the beginning.  There is still so much, nearly everything, to do to make the economy effective, balanced and humane.  But in the great 30-year stand-off between the forces of Trickle Up and the forces of humanity, the other guy just blinked.

The other element of the budget to help people with families, the £2,000 for childcare, I'm not so excited about.

The money is just as likely to push up the cost of childcare and the Budget fails to do what is urgently needed - a major roll-out of self-financing co-operative nurseries, on the North American and Scandinavian model.  That has the potential to halve the cost of childcare, so why are we not doing it? (more on this later).

As I say, there is still nearly everything to be done.  But the rhetorical support for makers and doers, after three decades of support for those who toil not and neither do they spin (but they do speculate) is absolutely critical and potentially historic.

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