New taxes for pasties, caravans and grannies: that’s the collective folk memory of last year’s Budget.
So it is no surprise that Chancellor George Osborne, who prides himself on his skills as a political strategist, is determined to avoid a repeat performance.
On Monday, he summoned his Treasury team to Dorneywood, his Buckinghamshire retreat, to thrash out details of this year’s Budget, to be delivered on March 20. Whereas last year he was criticised for jetting across the Atlantic in the run-up to the speech, rather than fine-tuning his plans, this time nothing is being left to chance. The Chancellor is under enough pressure already without producing any more revenue-raising wheezes that backfire spectacularly once the small print is examined. He needs positive headlines, not a rash of U-turns.
But let’s hope the Dorneywood summit was about more than just presentation. For what the country desperately needs is a Budget that puts growth back at the centre of the Government’s economic policy — something new tax regimes for lukewarm pasties or static caravans cannot do.
The Chancellor must think big. He needs to provide a clear path to recovery; only by doing that can he engender business and consumer confidence — the prerequisite to growth. There is more than a month to refine the details, but three clear priorities are required.
First (Other OTC: FSTC - news) , Mr Osborne needs to show the Government’s emphasis has changed. To coin the phrase employed by Boris Johnson at Davos, it needs to stop “banging on about austerity”. It should not be obsessed with preserving its AAA credit rating at the expense of all else. Its strategy needs to be based around cuts in both personal and corporation taxes. Huge one-off tax cuts might be unaffordable, but there is no excuse for not setting a clear direction of travel: that, should this Government remain in power, taxes will be progressively cut according to an agreed timetable, starting now. That will signal that the worst is over.
Secondly, that the Government is serious about unlocking the £750bn of cash UK plc is currently sitting on but lacks the confidence to invest. Companies need clear incentives to do just that; cutting corporation tax in line with either capital spending or job creation would be one incentive. Companies want to know that if, for example, they invest £50m in Britain on a new R&D plant they can count on paying lower taxes for a set period.
Thirdly, the Chancellor must not simply talk about infrastructure spending; he must show he means it. If Britain really does need £300bn from the private sector by 2020 to rebuild our creaking transport, energy, technology and social infrastructure, it’s time the Government provided some incentives to invest.
Attracting private sector money into politically-charged infrastructure projects is not complicated, but it needs the Government to use its balance sheet and access to cheap finance to guarantee costs during the risky construction phase. Upfront help can then be offset by lower long-term returns to the private sector once a project is built. That should not deter pension funds whose liabilities are similarly long term.
Instead, the Chancellor has needlessly over-complicated the funding for big projects, while spending on small ones such as minor road schemes has come to a grinding halt. That is economic folly when figures show that every £1 spent in the construction industry produces £2.84 of economic growth.
Get the policies right in these areas and you have a Budget for growth and jobs. In short, much more to chew on than a pasty.
If Steve Jobs had had a little more energy in his final years, he would have liked Apple to have invented an iCar. The ambition — which was reported in America over the weekend — will have triggered nostalgia among Apple investors who have seen the company’s shares tumble 30pc since they reached a record in September.
Shareholders may well have objected if Jobs had tried to take on the behemoths of the car industry but, almost 18 months after his death, the scale of the ambition will have resonated.
Under Jobs’s watch, Apple perfected the art of inventing products that both disrupted entire industries and delivered eye-watering profit margins. The iPod did it to the music industry, the iPhone to the mobile phone industry and the iPad to the PC industry. A chief reason for the slide in Apple’s shares over the - past six months is the fear that Apple does not have another groundbreaking product in the wings that can follow in the tradition that Steve built.
It is why chief executive Tim Cook, who took over from Jobs in the summer of 2011, could deliver a record-equalling $13bn (£8.3bn) of profits for the fourth quarter and then watch the company’s share price crumble 10pc in the minutes after the results were released.
And it is also why reports that Apple is considering building an "iWatch" caused a rare outbreak of excitement among Apple investors on Monday. As is its habit, Apple was not talking, but Cook told analysts last month that “we’re working on some incredible stuff and the pipeline is chock full”. A watch that doubles as a phone and can send emails sounds like something from a James Bond film, but experts say it is perfectly possible.
We do not yet know whether the iWatch will materialise or, more importantly, whether it can deliver for the company like the iPod and iPhone have. What is clear, though, is that for the first time since Cook took over, Apple investors are desperate for the company to place the letter "i" in front of another device and create another goldmine. Expect rumours of what’s really in Cook’s pipeline to dominate trading in Apple shares this year.