A song is buzzing around my head. 'It's the same the whole world over: It's the poor what gets the blame. It's the rich what gets the pleasure; Ain't it all a bloomin' shame?'
It was triggered by grim new research from the think tank Resolution Foundation claiming that 85 per cent of benefits from promised income tax cuts would go to the wealthiest half of Britain.
The Foundation says even when the tax-free personal allowance on income is raised - from £10,600 to £12,500 by 2020 - it will be the better-off who will be the winners because our 4.6 million lowest paid workers earn under £10,600.
And, rubbing salt in the wound, hopes of global recovery are evaporating, throwing off Chancellor George Osborne’s calculations. Keeping the government’s tax cut commitments on track means the Chancellor finding an extra £2 billion over next two years. New austerity measures will be needed to pay for tax cuts - and they will hit low earners hardest. The poor are set to subsidise the rich. And while there is much tub-thumping about how the raising of higher rate thresholds will help middle-earners, the Foundation’s analysis concludes that more than three-quarters of this tax windfall would go to the richest fifth of households.
Capitalism is wonderful at creating prosperity as long as the money flows around and does not end up too concentrated in a few hands. Tax breaks for rich might buy votes, but they are not so effective at creating wealth.
Moreover, it’s in everyone’s interests, including the better-off, that the poor are not so downtrodden that seeds of social unrest are sowed. Those at the bottom of the pile need to see a chink of light, or they give up - or get angry. One-nation Toryism is both caring and pragmatic.
The Foundation is calling on the Chancellor to use his Budget on Wednesday to drop tax cuts for the well-off that were a key Tory election pledge.
I am all for honouring pledges, but when a country is in crisis, it should unite against the dangers. Austerity may or may not be the best way to protect Britain. But Osborne thinks it is. When he talks of the country living within its means it should mean everyone in it.
He rightly and eloquently warns of 'a toxic cocktail of risks facing us'. They include a slowdown in China, a country that helped power global growth, the fall in oil and commodity prices, interest rate changes around the world with more countries joining the negative rate club, political instability in the Middle East. And it has been the worst start to a year on stock markets for nearly half a century.
But instead of bringing us together to face the threats he is administering a bitter cocktail - divisiveness and unfairness - with only a dash of compassion.
The reason rationing worked as well as it did in the Second World War was that it was seen as fair. The rich, although able to get round some constraints, were still affected. George VI and Queen Elizabeth knew they too had to share the dangers and deprivations. When two German bombs exploded in a Buckingham Palace courtyard the Queen declared 'I’m glad we’ve been bombed...we can look the East End in the face.' In 1942, when Eleanor Roosevelt stayed at the Palace, she encountered food rationing at dinner, and hot water rationing at bath time.
“He is administering a bitter cocktail - divisiveness and unfairness - with only a dash of compassion
Arguments rage about the welfare state. But most reasonable people believe that a civilised society has a moral duty to look after the most vulnerable - the young, the old, and the sick. Benefit cuts to the disabled, often people who struggle to dress themselves, leave a nasty taste.
Expected hikes in insurance premium tax will hurt those who are being responsible in protecting themselves, but may lack the savings to pay for unexpected disasters. It could deter some from buying cover.
With a little ingenuity the Chancellor could find other targets to wield his axe. For starters, how about phasing out that flopperoo, the Marriage Allowance, which the government has spent nearly £2 million advertising. It’s a piece of social engineering, cumbersome to claim, meant to bolster traditional marriage where one partner cares for children. It allows a spouse without a job, or who works part-time, to transfer their allowance to a partner on basic rate. If civil partnership had not been included it would feel like the clock had gone back to the 1950s. As well as being old-fashioned, it is limited, discriminating against working parents, widows and widowers, and those fleeing abusive relationships.
Osborne attempted some banter on Twitter at the weekend. He moaned that he was trying to write his Budget despite the noise of the Top Gear TV team of Chris Evans and Matt LeBlanc filming at Horse Guards Parade. But the responses showed what some people were thinking.
One man said: 'Just write "more cuts" and you have the rest of the afternoon free.' Another user said: 'Cuts for the poor and disabled. Tax cuts for the rich!' And my favourite: 'You don’t need to do your Budget. It’s predictable. Cut benefits and bribe rich friends.'
Lynne Bateson is a freelance writer and journalist. She was a national newspaper financial editor and consumer columnist.
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16 March 2016 | The British Museum, Great Russell Street, London WC1B 3DG
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