In Office But Not In Power - Osborne's U Turns

Osborne's U turn (yet another one in a long line of U turns; pasties, churches, charities, caravans etc) on the fuel duty rise demonstrates that this government is in office but not in power.

Enjoy the video above of Paxman destroying the hapless and hopeless Chloe Smith.

In order for a Chancellor to survive in office, it is essential that the markets believe what he says; the list of U turns somewhat "undermines" his credibility.

Pastygate U Turn

Loyal readers will recall the pastygate affair, when Osborne put VAT on pasties.

Following a complete drubbing by the media and the electorate, the government has now changed definition of hot food.

Food such as sausage rolls or pasties sold on shelves - that is, cooling down, rather than being kept hot in a special cabinet - will not be liable for VAT. The definition of a "hot" pasty is being altered to allow the reversal.

In other words the government has performed a spectacular and humiliating U turn.

Unsurprisingly shares in Greggs have risen by 9%.

Georgie Porgie's Porkie Pies

George Osborne's recent budget has caused the Tories a wee bit of a backlash amongst the pasty eating classes. However, pasties aside, another controversial area of his budget was the media dubbed "granny tax".

Osborne has attempted to defend his position by noting that it is not a "tax" per se and that, in cash terms, pensioners are no worse off.

All well and good, maybe, if one only reads and focuses on his current defence/explanation. However, go back but one year and you will see that wee Georgie promised to increase Age Related Allowance by the RPI.

Compare and contrast the relevant sections of the 2011 Budget with the 2012 Budget:

"BUDGET 2011 page 35

1.128  As announced in the June Budget 2010, the Government has reviewed how the CPI can be used for the indexation of taxes and duties while protecting revenues. Consistent with this, the default indexation assumption for direct taxes will be the CPI from April 2012. To ensure employers and older people do not lose out, for the duration of this Parliament the annual increases in the employer NICs threshold, and the age related allowance and other thresholds for older people, will be over-indexed compared to the CPI, and will increase by the equivalent of the RPI. The Government will review the use of the CPI for indirect taxes once its fiscal consolidation plans have been implemented and the duty increases it inherited from the previous Government have come to an end.

BUDGET 2012 page 34

Age-related Allowances...

1.200  To support the goal of a single personal allowance for taxpayers regardless of age, and to spread the tax relief fairly across working age people and pensioners, from 6 April 2013 existing ARAs will be frozen at their 2012–13 levels (£10,500 for those born between 6 April 1938 and 5 April 1948, and £10,660 for those born before 6 April 1938) until they align with the personal allowance. From April 2013, ARAs will no longer be available, except to those born on or before 5 April 1948. The higher ARA will only be available to those born before 6 April 1938. These changes will simplify the system and reduce the number of pensioners in Self Assessment."

Could it be that wee Georgie was telling porkies last year?

Surely not!

Cheap Pasties

Want to know where you can buy a subsidised pasty?

Dine in the Houses of Parliament.

An extra large minced beef and onion pasty, served with beans, was on the menu last Friday for £2.95.

Unfortunately, unless you are an MP or guest of an MP, you will have to pay around £4.99 for yours!

The Mystery of Cameron's Pasty

David Cameron claims that he recently had a pasty from the West Cornwall Pasty store at Leeds station.

Yet, the media reports that the West Cornwall Pasty store at Leeds station closed 31 March 2007.

Why do politicians try to create "street cred" by telling lies that are so easily exposed?