Can George Osborne break free of events at crucial pre-Budget meeting?

Chancellor George Osborne

Today may turn out to be the day when the most significant economic decisions of the year are taken.

This is the day when the chancellor and a small team of senior civil servants and political advisers gather at his country retreat Dorneywood to discuss what to do in the Budget on 20 March.

Having battled their way through the snow, Team Osborne will find a warm welcome awaits at the Queen Anne-style mansion set in over 200 acres of Buckinghamshire countryside. The housekeeper will, no doubt, welcome them with tea and freshly baked scones by a roaring log fire.

But when the Treasury's top mandarin Sir Nicholas Macpherson makes his presentation, the news he will bring is likely to be as chilly as the weather outside.

Sir Nick, a languid old Etonian with a sardonic sense of humour, is a veteran of such occasions.

It was at Dorneywood in 2008 that the permanent secretary to the Treasury peeled an apple with his pocket pen knife and broke the news to the then Chancellor Alistair Darling that borrowing was set to rise over £100bn, Darling cheered himself up by going to a concert by that muse of the miserable Leonard Cohen.

Today the news looks scarcely more cheering.

The lack of growth has seen borrowing rise this year, not fall as planned; the target George Osborne set for repaying Britain's debt looks like a distant dream; the age of austerity has already been extended to at least 2018 and now the Institute for Fiscal Studies is warning of the need for £12bn in tax rises after the next election.

The question today is how will Osborne react. Up until now he has relied on the loosening of monetary policy by the Bank of England - which he hopes the new Governor will take much further - and schemes to encourage the private sector to invest in building homes and the nation's infrastructure.

Critics argue that he should allow borrowing to rise even further in the short term to directly fund capital spending. His answer has always been that an extra £10bn, say, of spending would produce no noticeable improvement in growth, whereas loss of fiscal nerve would cause panic in the markets.

On the face of it then, the chancellor has few options at Dorneywood. However, George Osborne will not want to appear to be like the other people who use his country retreat when he is not.

The house in which he and his advisers gather today is used to de-brief and to rehabilitate British citizens who have been held captive abroad. Many of the country's most famous hostages have stayed here before enjoying their freedom.

Will the Chancellor find a way to break free or will he leave Dorneywood a hostage to events?

Nick Robinson Article written by Nick Robinson Nick Robinson Political editor

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  • rate this

    Comment number 76.


    IT was 50% 2009/10 not the current 40%.EBTs are abused by those with the 'attitude' you espouse to avoid tax & NI a morality that stinks & you know it!

    The richest in our society are NOT going to miss a meal because they are £1 short this week are they?

    The 'rich' are NOT being villified in the mostly wing press are they? Unlike those disabled scroungers?

  • rate this

    Comment number 75.


    Sorry mate

    Silly me I thought it was the Chancellors job to run Government fiancé

    I now understand it’s his job if it goes well

    And the civil servants fault when it goes wrong

    Glad we cleared that up

  • rate this

    Comment number 74.

    Actually I've worked for many of the worlds biggest companies"

    So? Doing what?

    You barely have a clue about how tax works. You do know that dividends are paid out of post-tax profits? No? Or that holding income 'off-shore' doesn't mean it's non-taxable? No?

    Why do you think you can discuss a topic you know nothing about?

    Buy a book on tax. Amazon have a good choice

  • rate this

    Comment number 73.

    The surrender by governments of control over their economies at the alter of globalization & unfettered capitalism has resulted in the need for governments to subsidize employment with tax credits and housing benefit leading to bankrupt exchequers..

  • rate this

    Comment number 72.

    Speaking as an outsider, of the available options, who do you trust most? Osborne or Balls? Come on everyone! Balls ruined everything last time round.

  • rate this

    Comment number 71.

    How about spending the HS2 white elephant money on social housing in order to help deflate the housing bubble?

  • rate this

    Comment number 70.

    @68 - most people are negative, because they don't trust Osborne to fix things.


  • rate this

    Comment number 69.

    Could the contributor Actionr please explain his claim that George Osborne is subsidising estate agents?

  • rate this

    Comment number 68.

    Negative comments by the BBC and most of the contributors on here.

    BBC Journo's going on strike because of compulsory redundancies - they should let you out and then lock the doors - too much negativity eminates from BBC offices

  • rate this

    Comment number 67.

    When a comment is littered with "namecalling" (e.g. Gideon, Slasher, Bullingdon Bully Boys, etc.) I have to say anything actually stated therein/after has already lost any credibility in my eyes as they have a tarnished opinion and are therefore unable to look at anything objectively.
    Also the blanking/denial of any comments contrary to their "stance" is also self-evidence of their prejudice.

  • rate this

    Comment number 66.

    well at least we now know what labours plan B was to be .

    Leonard cohen .

    rather than maybe not borrowing £100bn + and then having to print money because people would not lend to you .

  • rate this

    Comment number 65.

    The reason that GO is in a mess is that the analysis of what went wrong isn't right. It wasn't casino bankers that caused this mess. It was holding interest rates too low (ignoring asset price inflation) and running govt deficits during a period of growth (when we should have run surpluses). We need growth.High taxes on individuals and bashing the banks is exactly the wrong policy even if popular.

  • rate this

    Comment number 64.

    Actually I've worked for many of the worlds biggest companies. And have friends and familes working in others.
    The great thing about my current job? They are the only one I know of who pay their staff more than the market rate.
    All the others, pay peanuts, and treat their staff like trash without bothering to think things through. Much like you I suspect.

  • rate this

    Comment number 63.

    Let's hope this time he remembers to buy the correct ticket commensurate with his achievements for his away day: Cattle Class.

  • rate this

    Comment number 62.

    Cuts to people’s wages & benefits have left Joe Public with less money to spend.
    Is it any wonder than business confidence is so low; if people have less money to spend, how can businesses expand & create jobs?
    Cuts alone won’t save the economy – even the Tories friends know that now.

  • rate this

    Comment number 61.

    'So far George has gotten all of his forecasts for growth borrowing Government debt etc miles wrong'

    He'll be given these forecasts by civil servants - I mean, c'mon, you don't seriously believe that GO is remotely intelligent enough to work any of these things out himself do you?

    Ditto for Balls, Brown etc

  • rate this

    Comment number 60.


    You think a compnay can be successful without investing or paying staff well? You clearly know nothing about business or tax, except what you read in the tabloids and even then I doubt you understand more than the headlines. Muttering "off-shore" periodically impresses no-one

    If you'd been around in Salem, you'd have burnt those women because you 'knew' they were witches.

  • rate this

    Comment number 59.

    Just stand up and announce your resignation along with you LibDem side kick, that should be enough to see confidence and the markets soar.

  • rate this

    Comment number 58.

    What do they do Nick I mean what is the actual process

    Do they just put numbers in to a hat and take it in turns at pulling them out

    Do they just guess the numbers and then bet on who might end up the closes

    Whatever method they use you can be sure they will be wrong

    So far George has gotten all of his forecasts for growth borrowing Government debt etc miles wrong

  • rate this

    Comment number 57.

    You think that the main ways of aviodance are giving people massive bonus's and investing for the future?

    Yeah right!

    More like taking as much off shore as possible, and then announcing a massive diviend to shareholders because profits are up. The shareholders then stuff this money in their offshore accounts and the money never sees the light of day in the UK.


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