A Big Blue Tick
Well done George.
As we blogged here, Labour's planned double-dose increase in the jobs tax is one of the most economically destructive measures even these clowns have managed to cook up. Work by Policy Exchange suggests it could cost up to half a million jobs.
And as we attempt to crawl out of the deep jobless recessionary pit Labour has dug for us, George's promise to rescind at least part of the increase in National Insurance Contributions is what we would describe as common sense economics.
Not that you'd have gleaned that from most of today's media coverage (the irreplaceable Jeff Randall aside). The BBC and C4 News both took the Labour line that George is spending money he doesn't have. Notwithstanding that the £5.6bn pa cost is fully funded by a £6bn cut in Departmental Expenditure Limits (DELs).
They variously commented either that George should put all his savings into cutting the deficit, or that increasing the jobs tax is somehow less destructive of jobs than cutting public spending - ie the traditional socialist view - or that the spending cuts can't be achieved by efficiency savings.
Normally of course, we too are highly sceptical about any government's ability to achieve efficiency savings. But in this case, George is concentrating his efforts on procurement spending (ie the £200bn pa HMG spends on outside suppliers), and that is the one area where the public sector has had some success in the past.
And even if he fails to achieve the promised procurement savings, in the context of £700bn pa public expenditure, a £6bn cut is hardly swingeing. As we blogged here, Darling's budget left us with public spending set to increase by 2% in real terms next year. All George's announced cuts have done is to halve that increase to 1%.
So a Big Tick for George. And some clear blue tax water. Excellent.
*****
No time for further reflections just now - got to do some homework. Tomorrow I'm attending a discussion on what we should do about the banks, featuring John McFall (retiring chair of the Treasury Select Committee), St Vince, and various other notables. Homework comprises today's Treasury Committee report, which turns out to be a mind-crushing 250 pages. We will report back.
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