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After That Budget, Labour Needs a Kick up the Arse

13/07/2015 10:25 BST | Updated 10/07/2016 10:59 BST

A measure designed to "kick British businesses up their lazy arses".

That was the humorous remark made by an unnamed Cabinet member to The Times this week, following George Osborne's announcement that by 2020 corporation tax will be cut to 18%... if businesses pay their workers a new living wage of £9.00 an hour.

With corporation tax levied at 40% in the US, the UK has the lowest corporation tax rate in the G20. The new tax rate follows a series of cuts made by George Osborne, which was 28% when he first took office as Chancellor.

"We're giving businesses the lower taxes they can count on, to grow with confidence, invest with confidence and create jobs with confidence", Osborne said.

Nonetheless, businesses also have to pay their workers more: £7.20 next year, rising to £9.00 by 2020. In this way, Osborne was clever. A living wage was one of Labour's headline policies, and Osborne took the wind out of Labour's sails when he pulled it out of the bag at the very end of his budget announcement.

A policy essentially made up of giving people more money, the new living wage has stolen the limelight over other policies such as a cut in tax credits and the scrapping of university maintenance grants. Today's newspaper headlines overwhelmingly talk of the rise in wages, from "Osborne sets living wage at centre of radical vision" (FT) to "Hooray! It's pay rises all round!" (Daily Express).

After the budgetary policies were announced, Ladbrokes shortened the odds of Osborne succeeding Cameron as Tory leader to 11/4. He is now the frontrunner ahead of Boris Johnson at 3/1. The budget seems to have made Osborne, and the Tories, more popular.

Some commentators have recognised that the new living wage does come with drawbacks: notably that the cut in tax credits means that for every extra penny George giveth, George taketh away. Prominent left-winger Owen Jones said, with the cut in tax credits considered, "It simply isn't the case that that's a living wage".

Nonetheless, these criticisms mean nothing without a strong opposition. If we take the old adage "all publicity is good publicity", then the Tories are still riding their post-election high, whilst Labour have sunk to irrelevance. How many headlines have you seen about Harriet Harman this week? Her response to the budget was pitiful, giving weak and meaningless statements such as "there are measures in the budget which we will give serious consideration to".

The Tories presented their first budget as a majority government since 1996 with a clear message: Britain will be a "higher wage, lower tax, lower welfare" nation. Policies such as lowering corporation tax and increasing the minimum wage clearly build into the big Conservative vision.

Though it can be easy to play politics bingo with over-used phrases such as "long-term economic plan", the Tories have a key, clear message, and it was that which won them the 2015 election. Labour are floundering, lost, stuck between admitting that many of the budget's policies are actually theirs, and creating a meaningful opposition.

Just like businesses, Labour are long due a kick up the arse. But don't expect it to come from the Conservatives, who are happily speeding ahead and leaving Labour to pick at the scraps.