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

    Comment number 243.

    No237 Itgirl,
    'he was right not to borrow more'
    He is borrowing more, nearly £300 billion extra, it is to pay for economic failure, no growth, mass unemployment, tax cuts for his friends in the 'City', and the inability to recognise that only coordinated action by the G20 nations can solve the problem. He looks a little backward, and probably thinks Bretton Woods is in Cheshire

  • rate this

    Comment number 242.

    @241. sheila coleman
    Sorry i'm not sure what you mean.

    Affordable to me isn't what people can afford to pay, it's what the house is worth.
    I saw a beautiful 3 bed detached house that had just been built (by owners, not a developer) The cost was just over 100k (labour,materials etc) For the same price in the same area you can get a 2 up 2 down terrace.

    This is madness

  • rate this

    Comment number 241.

    234. Huge numbers of houses are affordable prices. The woman with 11 kids 2 horses has been put into one of these "affordable "in Gloucestershire [having been in 2 council houses knocked tog] it cost £400 thousand paid for by our tax it seems. My son trying to sell £180 thou, which would you say was affordable. What should have been done was benefits 2 kids only, bill for welfare billions less

  • rate this

    Comment number 240.

    Helping people get onto the property ladder is stupid - that means they can't really afford it if they are having to ask for help!

    Interest rates are at an all time low....they can only go one way....up!

    People who ask for help the buy a house will just end up losing the house when rates go up!

    This country is run by idiots!

  • rate this

    Comment number 239.

    Osborne's "big idea" is to protect banks against mortgage defaulters! You could not make it up. He wants to hand taxpayers' money to the very people that caused all this mess in the first place.
    I went to the pub last night. Big surprise, the price of a pint hasn't gone down a penny. The PubCo gave us the usual 10p "pre-budget" increase two weeks ago.

  • rate this

    Comment number 238.

    No233 Victor,
    To ensure we prevent Mr Miliband reaching No10 it may be necessary to abandon reliance for our argumants on tabloid trash.
    Would the world wide economic crisis have been cancelled if the Bullingdon Louts had been in Downing Street?

  • rate this

    Comment number 237.

    I was quite pleased with the budget. Nice to see the personal tax allowance rising and corporation tax lowering. A budget that helps and rewards workers and business rather than punishing and passing it all out in benefits. He was right not to borrow more too. We MUST pay off that deficit before we can think of passing out an extra cash.

  • rate this

    Comment number 236.

    I thought it was over borrowing that got us all into this mess in the first place. Now people's mortgages are going to be subsidised.

    What planet is Osborne on?

  • rate this

    Comment number 235.

    No229 Grumpy,
    A little chap on a plane was struggling to get his luggage into the upper rack, he turned to a fellow traveller and said, "I am not Happy" the guy replied "which one are you then"
    There seems little doubt in your case.

  • rate this

    Comment number 234.

    I'm in agreement with those who think the housing market is still a problem.

    Why not cap rent rent:
    People have more money to spend
    Money to save for a deposit and retirement
    Houses prices will come down to affordable levels

    It shouldn't be more expensive to rent than buy.
    Houses need to be seen as a place to live and not as an easy way of making money.

  • rate this

    Comment number 233.

    Ed Balls. He'd sort this mess out within a year. VOTE BALLS!!

    .......how he even has the nerve to appear on TV after the mess he and Brown presided over is beyond me. But the public seems to have forgotten this oh so very quickly.

  • rate this

    Comment number 232.

    What a pity the two overgrown schoolboys running HM government and self-proclaimed 'Sons of Thatcher' had not been 'Sons of MacMillan'.
    We see the result of the neoliberal nonsense promulgated by the former.
    Thieving, incompetent, reckless, 'socially useless' bankers through their greed and incompetence leading the world's economy to near meltdown.
    'Pasty George' thinks it is wonderful.

  • rate this

    Comment number 231.

    meninwhitecoats @228
    "a front to appease the markets"?

    Not exactly 'a front', a basis for 2010 electioneering

    Going beyond market expectations (met by Darling)

    Far beyond market desires, at least of those eyeing Demand

    It was the THREAT of cuts that destabilised home & abroad

    Time to ponder 'tragic irony'? The role of LibDems, esp. Vince

    Bound now to 'tough it out', for a Second Chance?

  • rate this

    Comment number 230.

    Yes this government has troubles, but I'd far rather have Osbourne at the helm than Balls. Of course Labour spend their time arguing for U-turns, because their only policy is to do whatever the opposite of the Tories is. They could argue for world peace and Milliband would be up remonstrating pro-war. Typical negative politics, with no viable plan.

  • rate this

    Comment number 229.

    21 Minutes ago
    No216 junat,
    Mr Balls was one of the most outstanding economics graduates of his generation from Harvard

    Thank you for making my day - had to laugh out loud!!

  • rate this

    Comment number 228.


    Coalition have talked the talk but never cut anywhere near as deep as they suggested because the GBP simply has not got the appetite for that level of austerity.

    They have put up a front to appease the markets without actually delivering the reductions. The export lead recovery is looking increasingly bleak as the world economy contracts - there are no easy solutions.

  • rate this

    Comment number 227.

    I should more correctly have said the stimulus to the building sector - no one is advocating a sub prime situation again but where people can reasonably afford a mortgage but are struggling to get the deposit together because they are in the rental market this seems a perfectly reasonable thing to do.

  • rate this

    Comment number 226.

    It's generally agreed that many of our woes were caused by too much debt: private, corporate and public.

    Household debt increased against equity in homes, during the property bubble, still sustained by damaging policies: QE, low interest etc.

    His apparently lunatic determination to push crazy prices yet higher shows he is utterly out of touch with ordinary people and their aspirations.

  • rate this

    Comment number 225.

    "coverage it warrants"

    Always 'can be times', but was there ever really 'an age' when this fertile Earth could not support 'social justice', or for long 'rewarded' cheats & raiders?

    We want to show our respect, our gratitude to our leaders, from Zaphod to Arthur Dent even. But harmless gestures can engender 'corruption from democratic purpose'

    Langland's Plowman missed solution

  • rate this

    Comment number 224.

    No216 junat,
    Mr Balls was one of the most outstanding economics graduates of his generation from Harvard - still one of the outstanding universities in the world.
    In view of the Bullingdon Louts prominence in HM government, we should be be prepared to listen to other points of view.
    We will be adopting his policy prescription in the near future.


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