A Budget of paradoxes

 
George Osborne

Off course, but determined to stick to it. Having no money to spend, but still able to deliver tax cuts for people and businesses. This was a Budget of paradoxes.

George Osborne was forced to read out a grim set of economic forecasts - the missing of his debt target, the halving of next year's growth forecast and borrowing up this year on one measure and only down on another thanks to an unprecedented and surely unrepeatable underspend by Whitehall departments (£7bn more than last year).

However, none of this convinced him to take the advice of those urging him to borrow more in an effort to stimulate growth by cutting taxes or investing in construction.

Nevertheless, the chancellor did find money from squeezing day-to-day spending to pay for important personal and business tax cuts and a multi-billion pound attempt to boost the construction industry.

This was a very political speech from a man in a very tight economic straitjacket: demonstrating a Brown-like determination to keep control of the economic statistics even though they are now drawn up by independent forecasters; echoing Thatcherite rhetoric on home ownership ("Help to Buy" follows "Right to Buy"); boasting that he would be delivering his tax-cutting objectives (20% Corporation Tax rate and £10k personal tax allowance); claiming to have taken out of tax all those who would pay the 10p tax band Labour have talked about restoring; promising a tighter spending round than expected and inviting Labour to tell the electorate which tax rises they'd like instead.

It will, though, not be judged by the headlines or by the measures or even by the Budget leak* but by whether the next time he stands up the economic news appears to be any better or worse - yet again.

* In reality not so much a leak as a breach by the London Evening Standard of an embargoed pre-Budget briefing

 
Nick Robinson, Political editor Article written by Nick Robinson Nick Robinson Political editor

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  • rate this
    +1

    Comment number 23.

    I think the overall effect is no change. The figures detailed at the start speak for themselves, and Osborne's general 'performance' was poor. There are a couple of measures that may, or may not, produce a boost for the economy, and even a couple of very sensible announcements

    Alternatively, this was the chance for Osborne to put a positive spin on things ahead of more 'stick' later in the year

  • rate this
    -5

    Comment number 22.

    @13. John Petrie
    The 2008 crash will take generations to clear up not 3 years of another government.
    The 2008 crash was not the creation of the Labour government, it was a world-wide financial meltdown which started in the US and affected all countries especially those who had listened to the blandishment of the banks and de-regulated their financial services.

  • rate this
    0

    Comment number 21.

    It's enough to make you want to go out and drink a hundred pints of beer

  • rate this
    +1

    Comment number 20.

    Most Ministers want to see cuts made/deficit reduced but seem unwilling for their Departments to contribute. As a consequence they give little room to manouvre. Tories desperate to appeal to a wider public need a much better press if they are to stand a chance in next election. In Fleet St v the Beeb it is such a one-sided contest at the moment.

  • rate this
    +12

    Comment number 19.

    "9. laughingdevil Free pint when you buy 350."

    Challenge Accepted.

  • rate this
    +1

    Comment number 18.

    A lady interviewed on the BBC just made an interesting point about how the governments ignoring of growth and lack of infrastructure spending risks the UK following Japans recent economy woes .....

    As nervous investors do not or are unable to spend and government determined not to spend on anything useful leading to no money in the economy ...

    Someone tell George ... Please!!!

  • rate this
    -7

    Comment number 17.

    Ed Milliband's robust reply to the budget said it all, Osborne is still hammering the vulnerable but the millionaires are getting their large cut in income tax shortly. The much hyped childcare benefit has to wait for two years plus - no wonder the odious Cameron and the useless Osborne looked particularly shifty whilst being rightly lambasted by Milliband.

  • rate this
    0

    Comment number 16.

    I see many problems all revolving around the year long bag of hot air the governments promises have been so far, pretty much everything has been "its going to get worse so we'll cancel our tax rises to look better"

    Still not done a lick of work actually stimulating the economy and is just lining his and his mates pockets further. We're all screwed because of it.

  • rate this
    +24

    Comment number 15.

    Whitehall spending should be cut more. Ministers need lessons from private industries who've had to cope with worse. I recall, when my company faced a financial crisis, being told 'You must reduce your department's spend this year by 10%, & you will do it without increasing prices or reducing standards of service to customers. If you can't do it, we'll find someone who can'. Tough, but I did it.

  • rate this
    +6

    Comment number 14.

    The NI cut could have been better targeted. What creates jobs is not small businesses, but growing businesses. Banks are reluctant to abandon zombie companies, because they'd have to write off the debt, and reluctant to lend to those that want to grow, because of the risk. A better move would have been to waive the NI increase for those companies that took on more net staff over the year.

  • rate this
    +25

    Comment number 13.

    Making the best of a bad deal. No Chancellor can have ever been given such a bad set of books when coming into power. The Ed Balls view of never mind the past its your fault doesn't stack up. The 2008 crash will take generations to clear up not 3 years of another government. How short our memories are.

  • rate this
    +17

    Comment number 12.

    As a small business I have to say I resent absolutely paying tax (NI) to employ people, having the first £2000 of NI free is a great boost for my moral. May even be the first step to breaking my promise to myself never to employ anyone again.

  • rate this
    +1

    Comment number 11.

    A whiff of carrot today, and the forecast of a very big stick in June.

  • rate this
    +2

    Comment number 10.

    Help to Buy = another tax on the youth and the savers in order to support the overpriced housing market.

    Disgrace.

    Monetary stimulus has unleashed inflation and created bubbles, while the man does nothing at at fiscal level!

    he is utterly clueless.

  • rate this
    +1

    Comment number 9.

    Anyone remember last years budget? Or the year before?

    All the nasty little surprises will come out over the next few days.

    The REAL bad news. Today he only gave the forecasts and the "good bits" And even they were sops to interest groups.

    Free pint when you buy 350, wow! I'm soooo grateful!

  • rate this
    +26

    Comment number 8.

    Considering the constraints he is under I reckon its a pretty positive budget. By next year my tax allowance will have increased over £3500 since this government came in, thats roughly £700 less tax I pay annually. Thats a bigger tax cut then anything I got during the last governments tenure!

  • rate this
    +16

    Comment number 7.

    The only way to clear the deficit is if the govt gets more income. More tax income will come with more jobs, so lowering the Corporation Tax rate to the lowest in the developed world will encourage new investment, new jobs and cause an increase in income taxes and inward investment. This can only be a good thing! You can't penalise businesses and expect them to stay in the country!

  • rate this
    -7

    Comment number 6.

    What is George Osborne to the voter. An OK guy, straight, fair, looking after everyone? What is David Cameron: the same? If the answer to both questions is yes, they'll win the next election. If not, they won't. Simple. On current evidence, they don't cut it. Shame.

  • rate this
    +2

    Comment number 5.

    @2. Redfootball

    Please tell me where you are getting cheap pints of beer!

  • rate this
    +23

    Comment number 4.

    Ed Balls has since the Budget statement made comment about lack of growth and low interest rates. In fact it should be pointed out that UK has growth although small (unlike some other European countries). Switzerland has much lower interest rates and is not viewed as being in trouble. It is time that our politicians learnt some new tricks instead of waiting for a policy simply to criticise it.

 

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