Budget 2013: Cuts, giveaways and grim forecasts

 
George Osborne

First the cuts. Next the giveaways. Then the grim economic forecasts.

Today, all but the lucky cabinet ministers with ring-fenced departments have just learnt that their budgets are to be cut again.

Tomorrow the chancellor will use his Budget to spell out how the money saved - £2.5bn over the next two years - will be spent, and reveal another set of miserable economic forecasts which one senior minister told me will be "extremely bracing".

George Osborne has promised that he will help people who "want to work hard and get on, own their own home and save for their retirement".

So, standby for a boost to house-building or, rather, yet another government attempt to stimulate the construction sector, which shrank by almost 8% last year. The government looks likely to extend its NewBuy scheme to help people with small deposits buy newly built homes.

'Beer tax'

The chancellor has already quietly raised some money from the reform of the state second pensions, which will see some employers and employees paying more national insurance.

That cash could be used to pay for a tax cut - perhaps a further increase in the tax-free allowance to reach the Lib Dems manifesto target of £10,000 or the postponement, again, of planned increases in petrol duty.

A year ago what became labelled as an "omnishambles" Budget levied new taxes on pasties and caravans. George Osborne has been looking at securing the headlines this year by scrapping a much hated tax: the so-called "beer tax" - the automatic 2% increase above inflation in alcohol duty - which both the Sun and the Sunday People have campaigned to see the back of.

If George Osborne is to freeze beer tax, he will feel under pressure to increase taxes on cheap but strong alcoholic drinks to show that the government has not abandoned David Cameron's campaign to crack down on cheap booze.

All these relatively minor measures are likely to be overshadowed by yet another downgrading of the official economic forecasts by the Office for Budget Responsibility which is likely to predict lower growth and higher borrowing in the years to come.

After the next election, if not before, that will guarantee that there will be further steep tax increases or eye-watering spending cuts - a political choice the chancellor will want to highlight tomorrow in order to put his shadow, Ed Balls, on the spot to spell out what Labour would do.

 
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  • rate this
    0

    Comment number 470.

    269.Rotherham Lad

    ...Could be other people voting, though!
    ~ ~ ~
    Just set a new record of one +3 and two +2s on my three single clicks on different posts. Not bad, eh? ;-)

  • rate this
    0

    Comment number 469.

    @RBL

    "in the public sector if you don’t work hard, no consequence, continue to get funded by the private sector. get it?"
    _____________

    If you think no one in the public sector loses their job, look at your local council cuts, HMRC closing advice centres, small agencies merging and think again!

  • rate this
    0

    Comment number 468.

    @467 AfA
    Exactly. A Budget-supper-musing leads me to conclude today that GO has been rather unwise. 'Tis said in politics, 'Never leave yourself a hostage to fortune'. Yet most of GO's 'beneficial' measures are some way off in the future AND dependent on the choices & fortunes of others: not just in the UK but worldwide.

    Too much equal partnership {small letters ;-)} for success?

  • rate this
    -1

    Comment number 467.

    Up2snuff @465
    "high ground"?
    Not just in praising 'helps' & noting 'harms'?

    Every measure, every combination, has winners & losers, consequences not insignificantly unforeseen, paradoxical, even devious!

    Until we understand and agree Equal Partnership (as I know would even our robust friend Steve_M-H), our politics will remain stuck, far from genuine "high ground", a pantomime scripted my Mammon

  • rate this
    0

    Comment number 466.

    @462AfA
    If EdM had praised beneficial parts of the Budget&pointed out a few deficiencies, he would still be on the high ground.

    Effectively, EdM has knocked the incr tax exempt band while overlooking those who dont earn above it or inflation suffered. He didnt praise home buy help or point to lack of buildg&danger of boom. While that opens up Lab's past to attack, he should have been positive.

  • rate this
    0

    Comment number 465.

    462#

    Lay off the Jamaican Woodbines, mate. The thing you fail to take into account is human nature. Never going to fly in a thousand years.

    You can wish for it all you like, but you'll be returned to dust in the ground for centuries before it ever gets taken seriously.

  • rate this
    0

    Comment number 464.

    @453 Andy
    Sadly, the 330,00 do not pay for lifestyles of any of the 33m or the out of work or retired.

    I would welcome if one did want to pay for my lifestyle, I am very low budget! Years of failed Govt or as Cleggie inferred-the sins of past Govts-have meant that I'm used to struggling & foregoing many things that those in mid-tax band enjoy & take for granted, let alone the top tax payers.

  • rate this
    0

    Comment number 463.

    Up2snuff @460
    "to the point of being
    both pathetic
    & unwise"

    You do see though? That the pantomime-horse is 'one'?

    They change places, front or back. But there is no 'real argument', between the performers: no more than between the drivers either side of the slave-column

    If NOT proudly Equal Citizens, bequeathing peace and prosperity, we will still ENJOY 'the politicians we deserve'

  • rate this
    0

    Comment number 462.

    Steve_M-H @458
    "one hand clap"
    Sums up all here?
    Meant kindly?

    Slaves can fall out as readily as masters, but 'can do better'?

    If all others found of goodwill, agreed on equal hard-working (as able) partnership, you would still agree: "Who wouldn't?"

    A pity meanwhile we ramble & mock, however understandably & so forgivably, crises contributed to, another catastrophe looming, perhaps 'the last'?

  • rate this
    0

    Comment number 461.

    449#

    Continuity Brown Economics, Snuffy. Been saying it all along.

    443#

    Guess you didnt pay an awful lot of attention in Business Studies class, eh? Pontification without Education....

    433#

    If only they were that bright and resourceful and media savvy, the party wouldnt be in the state its in. Compared to Charlie Whelan's legions of monkeys typing Shakespeare Soundbites, they're beginners.

  • rate this
    0

    Comment number 460.

    @440 rockinRobin
    Apparently. It's what they do best.

    Certainly Miliband's response was poor to the point of being both pathetic and also unwise, setting up the Tory spin-doctors & speech-writers with some gags that will hurt the two Eds in future. I can't wait!

  • rate this
    0

    Comment number 459.

    Justin@429
    'events & influences'

    Surplus & deficit 'control', essentially reactive: by month roller-coaster, by year waves

    Inherited deficit 1979, contained 'by' Howe, indulged & controlled 'by' Lawson

    Major surpluses led to Lamont bulge, cut 'by' Clarke & Brown

    4-year Brown surplus then deficit bulge like Lamont's

    Recovery overtaken by global (US/UK) bank crisis

    Recovery 2010, now impaired

  • rate this
    0

    Comment number 458.

    Hasnt Blinky Balls realised that his call for a VAT cut would see us being taken to court by Brussels again, like they're already doing with the fact that we've set VAT at 5% on domestic fuel? A

    All smoke and mirrors and in the grand scheme of things, considering what is happening in Cyprus, pretty academic anyway.

    457#

    Yeah, real bright idea, that. *Sound of one hand clapping*

  • rate this
    0

    Comment number 457.

    Since all sides blame the 'international financial crisis' of 2008 shouldn't every budget contain measures to ensure it doesn't happen again.

    And it was caused by freewheelin' private capital which we should take into 'preventative detention'. We'd put it to GOOD purpose.

    Oh, yeah, and it was caused by mad economists and central bankers. Whom we are still bigging up as experts.

  • rate this
    +2

    Comment number 456.

    Andy C555 - if everyone tried to dodge taxes, the UK would end up like Greece. Is that what you want ?

  • rate this
    +1

    Comment number 455.

    In my 90th year, I am beginnig to wonder why I joined the RNPS, TO FIGHT FOR MY COUNTRY & FREEDOM?

    From 1971, WE have been on a downward slide. Our ability to provide for ourselves, it seems, is no longer possible. We now rely on food from abroad & yet, not one mention of a Agriculture policy, that would boost our economy, provide jobs, making MY/OUR COUNTRY, more independent!

  • rate this
    +2

    Comment number 454.

    @453. AndyC555
    If only the tax collected from those in the UK was spent in the UK then all would be fine. We would have no unemployment and industries existing, expanding, investing and exporting to the world.
    Instead we are supporting every other country in the world, this is why we have a growing debt mountain (we can't keep buying when we aren't selling - and I do mean debt not deficit).

  • rate this
    -2

    Comment number 453.

    "Up2snuff
    the spending of 330,000 top tax rate payers cannot match the spending of 33m ordinary & middle rate taxpayers"

    Agreed, although it's odd that many of the 33m seem to expect that their lifestyles will be paid for by the 330,000.

    If only the 'rich paid more tax' everything would be fine.....

  • rate this
    +2

    Comment number 452.

    I've skimmed the report as provided. Nothing useful at all in it. Not one mention of stopping departments spending billions of our money abroad while leaving millions of unemployed here with nothing to do because all our money is helping China, India, Germany, France, USA et al grow because we are buying all they can make.

  • rate this
    -2

    Comment number 451.

    448.Mr N
    20 Minutes ago
    435 Andy

    "Try working harder."

    Just what I told my accountant... he is only a parasite trying to get his hand on my hard earned dosh"

    You should hear what he says about you.

    So you resent his fees but are Ok with the chancellor taking far more off you then any accountant?

    odd.

 

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