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

 
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  • rate this
    +5

    Comment number 103.

    70. Kevin
    I find it bizarre that, despite having a 'leaked' copy of the Standard, that Ed Milliband still came across like an argumentative, broken record.

    Because that's all he and Ed balls are, just a noise, like one of those rattles in your car you just can't get rid of. not that the opposite two are much better, just not as irritating somehow.

  • rate this
    +3

    Comment number 102.

    @101
    Because they are responsible. the banks traded products that Labour knew were dodgy. Mostly traded in London. They didn't act to stop it, but actively encouraged it whilst also allowing banks to recklessly lend money to consumers in the interests of building a boom only economy and buying votes.....

  • rate this
    0

    Comment number 101.

    Why does everyone keep blaming Labour/Gordon Brown for financial crisis and recession, when actually not true, it was the banks! UK debt % v GDP, rose under labour,after falling,was then 37% until crisis. National debt is not the same as personal loan. Gvt should now spread spending cuts over the decade to inject confidence into consumers after giving tax cuts. Debt much less than Japans!

  • rate this
    +1

    Comment number 100.

    @88 Actually i think you are wrong.

    lets say you earn £100 And that increases by 4% a year for three years then at the end of three years you get £112.49p actually slight more that 12 % or have I missed something.

    If i am right then the more worrying thing is that you identify yourself as a teacher!

  • rate this
    +1

    Comment number 99.

    It seems that the powers that be haven't learned the lessons of the financial crisis. The government is still running up a deficit and is pandering to large businesses with the reduction in corporation tax to 20%. What is more, the combination of low interest rates and a lack of investment in large infrastructure projects will lead to stagflation of the economy Japanese style.

  • rate this
    +3

    Comment number 98.

    If we just looked at this from a government perspective then LABOUR got us into this mess over 13 years and have no credibility to suggest getting us out. So we are where we are with the Con/LibDem's plan. The issue is people still want cake today. This is now a long term game and if it takes Labour 13 years to get back, so be it.

  • rate this
    +4

    Comment number 97.

    @88.Sebastian-Fettles-Teacher.... Really?! I hope Teacher is your name and not your occupation because when compounding is taken into account it acctually results in a great increase than just adding them up. Lets do the math - £100 + 4% + 4% + 4% = £112.49p or a 12.49% increase from the original £100

  • rate this
    +3

    Comment number 96.

    Manual Bet,one year benefits went up by 5 %(linked inflation).If you compound the increases over 3 years,some people may have seen their benefits by 12%.Ive had 3 pay rises in 8 years,so over that time an average of 1% a year.At that rate compounded every year it would take 72years to double my wages whereas someone on benefits would double their income in about 14years :-O

  • rate this
    +1

    Comment number 95.

    He needs to stop tinkering and start to look like a chanclor rather than a leaf in the wind.
    Reduce overseas aid from approx 8 billion to 3.
    Stop or reduce our cost of being in the EEC.
    Spend by offering the local authorities a chance to build more homes in their area that are needed by offering financial incentives, on work compleated, even offer to buy some of the homes if need be.

  • rate this
    0

    Comment number 94.

    90. Nervous

    Dont see how continually missing targets set by yourself (by a distance) gives credibility - surely that confirms incompetence?

    Labours fault lies in not reigning in the banks (Cameron agreed)

    Having to bail them out (again) is what cost the country?

    But still even in 2010 The Debt was £240 Billion less & We had growth? The current gov plan seem more inline with your statement ;)

  • rate this
    +1

    Comment number 93.

    @76.MKfexpert

    ''...I really do not understand the fickle UK people. Regardless of who's in, they are all useless...''

    We're not fickle, we know.

    ''...remove ALL, Lords, MP's and change the way this country is Governed...''

    Into what? Communism? A dictatorship?

  • rate this
    0

    Comment number 92.

    @84
    Definitely wrong..... Minimum 1% per year from 2007, but in some cases that represented a 25% increase from 2007 to 2008.
    Swings and roundabouts, but the fact is for many, private and public sector there has been no increase.....

  • rate this
    0

    Comment number 91.

    @88 - Actually you are wrong, and 3 78 is close, but 4% compounded is really more than 12%. I absolutely agree with # 78 - benefits must not be linked simply to "inflation" but to more relevant wage economy based factors.

    I would go further, pensioners benefits must not be sacrosanct, I am sorry but the cost of Gordys false boom in house prices through cheap non-money must be recycled.

  • rate this
    -8

    Comment number 90.

    85.sprout_2001

    However, I do not see how it could be any less accurate or credible than Dave or George who cant even get close to the targets set by themselves.

    --


    At least they have targets. What was Labours target? Bankrupt the UK and hand us to the germans?

  • rate this
    +5

    Comment number 89.

    Talking about short memories out there...anyone remember that the advisers to Brown were Miliband and Balls...pray you don't get what you wish for!

  • rate this
    -2

    Comment number 88.

    # 78. Frank London: Your maths are as poor as the chancellor's:
    3 % annual salary increase a year over 3 years does not result in an increase of 12 %. The difference between the chancellor and you is that he is trying to fool us, whilst you just can't do maths. YOU SHOULDN'T ADD UP THE PERCENTAGE POINTS!

  • rate this
    +8

    Comment number 87.

    More funding for the unsustainable lending to people who can't afford it which caused the recession in the first place.

    Absolutely mad. What we needed was interest rates to 6%, reasonable lending & saving practices, and stop propping up zombies!

  • rate this
    +3

    Comment number 86.

    I hope the government gives money to the food banks rather than to rich economies like India or China. Or is foreign aid still protected from cutbacks?

  • rate this
    +1

    Comment number 85.

    64. Nervous

    The article does seem to make sense, though am no expert. I dont understand why you call it garbage - but getting off topic

    However, I do not see how it could be any less accurate or credible than Dave or George who cant even get close to the targets set by themselves / cite approval from organisations as important when it suits? Even misinterpret them - eg OBR - lie or incompetence?

  • rate this
    +5

    Comment number 84.

    "[So the last 3 years of Labour my pay went up 0%] while those not working went up 12%."

    No they didn't. You're just wrong.

 

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