A budget for big business
Few I think could accuse George Osborne of going for easy vote-winning options in his measures aimed at stimulating the growth of the economy.
Cuts in the burden of corporation tax, which will be worth around £2bn per annum when implemented over the coming years, are likely to be particularly beneficial for big multinational companies.
And a significant lifting of planning constraints will delight much of the corporate sector.
But at a time when the residents of so-called middle Britain are feeling a sharp squeeze in disposable income, and when homeowners fear that screeching high speed trains will be zooming past their back gardens and ugly superstores will be built at the front, Mr Osborne's Budget choices may not win a vast number of votes.
The chancellor will therefore perhaps be seen as having chosen - still years from a general election - a principled Budget rather than a crowd-pleasing one. That may well be the best he can hope for, in any case.
In a way, The Plan for Growth published today alongside the Budget's red book, can be seen as a response to criticisms levelled at the government by Sir Richard Lambert when he stood down as director general of the CBI, the business lobby group, earlier this year.
Sir Richard praised the chancellor's determination to cut public spending, but said that "the government has not been nearly so consistent and focussed when it comes to policies that support growth" and had "failed so far to articulate in big picture terms its vision of what the UK economy might become under its stewardship".
So what is the vision of the chancellor and of the Business Secretary, Vince Cable? In that growth document, they say:
"We have to become much more productive so that we can be a leading high-tech, highly skilled economy. We must build a new model of economic growth - where instead of borrowing from the rest of the world we invest and we save and we export. Our economy must become more balanced. Private sector growth must take the place of government deficits and prosperity must be shared across all parts of the UK."
Most of that is as shocking and contentious as a mum pictured with a steaming apple pie.
So how is this high-exporting, high-saving, high-growth economy to be created? Well here are messrs Osborne's and Cable's quartet of ambitions, which they believe will deliver the UK's economic renewal:
1) to create the most competitive tax system in the G20 (or the 20 most powerful and richest world economies);
2) to make the UK one of the best places in Europe to start, finance and grow a business;
3) to encourage investment and exports as a route to a more balanced economy; and
4) to create a more educated workforce that is the most flexible in Europe.
And this is where it starts to get controversial.
Mr Osborne has decided to cut the mainstream rate of corporation tax rate by 2p in the pound from 1 April, double the planned cut. Which means the rate will go from 28p in the pound to 26p.
And this isn't just an acceleration of cuts announced last June. It represents an extra cut, because Mr Osborne's new commitment is to reduce the rate to 23% by 2014, rather than the 24% rate he announced last year.
That extra cut of 1p in the pound (or 1 percentage point) will cost £900m next year and thereafter. Which is a lot of money at a time when the government doesn't have a lot of money.
What's more, Mr Osborne will be seen as generous to companies in a second sense. After a lengthy review of the so-called Controlled Foreign Company rules, which are hated by most multinationals, the Treasury has opted to apply a very low rate of just 5.75% on cash held by multinationals in non-trading entities overseas.
By 2015/16, the low rate of tax on this cash - which is lower than the 8% rate which business had expected to be levied - will cost the exchequer £840m per annum compared with the current tax system. Again, that is a non-trivial sum. And critics will see it as rewarding multinationals who stash cash in tax havens and low-tax countries.
Finally, a further £80m a year of revenue will be lost by a decision not to levy tax on dividends brought into the UK from branches of multinationals - which the government would see as the logical extension of a decision by the previous chancellor, Alistair Darling, not to levy tax on dividends repatriated from overseas subsidiaries.
So in toto, big companies have arguably secured tax breaks which will eventually save them around £2bn a year - which some will see as the Tory members of the government unfairly rewarding their corporate pals, while millions of individuals are struggling to make ends meet.
Indeed critics of these changes to the global taxation of British multinationals believe the ultimate loss of revenue for the exchequer will be much greater than the Treasury's estimates.
Mr Osborne however would see the corporation tax cuts as a sprat - albeit a plump juicy sprat - to catch a lovely silver mackerel.
He would argue that the UK's long term growth and prosperity - on which the UK's ability to finance public spending depends - requires big companies to invest as much as possible in the UK. And he fears that if the tax regime for big companies isn't as competitive as anything on offer from other rich developed economies, those big companies will take their head offices and their investment to other parts of the world.
For Osborne, the reality of globalisation - where businesses can locate more-or-less wherever they like - means that the burden of taxation has to increasingly switch to income taxes on individuals and to indirect taxes like VAT.
So in that context it is significant that Mr Osborne is raising around £1bn from cracking down on what he calls disguised income, or tax loopholes exploited by the super-wealthy and those who run multinationals. The tax free status of offshore employee benefit trusts, for example, is being abolished, which will be a blow to the directors of big companies who are frequently the beneficiaries of such trusts.
There will also be a rise in the tariff imposed on non-doms, those who don't pay tax in the UK on their overseas income (which can be substantial) - though the tariff rise is coupled with incentives on non-doms to invest in the UK.
Or to put it another way, Mr Osborne hopes that if he is seen as being generous to big businesses as institutions, it will be recognised that he is simultaneously forcing the rich as individuals to make an increased contribution to closing the UK's fiscal deficit.
Mr Osborne is also acutely sensitive to the charge that the reductions to the burden of corporation tax will be perceived as too kind to the large banks, whose reckless lending and investing is widely blamed for the financial crisis that tipped the UK into the worst recession since the 1930s.
So he is marginally increasing from 0.075% to 0.078% the rate of the bank levy he has just introduced. That will boost the take from the levy by about £100m per annum.
The levy rise may dispel criticism that he is letting the banks off lightly. But the banks themselves may be miffed, because they may feel that the chancellor has gone back on his promise in their Project Merlin deal with him to bring greater stability and predictability to the tax system.
Finally there are a raft of reforms to planning and building regimes, which are bound to stir up a hornets' nest.
These include a new presumption that developments should be permitted, unless the local planning authority can advance compelling reasons why they should not - which inverts the current decision-making arrangement, where the developer has to argue the merits.
Also planning decisions must be made within a year. And local authorities can no longer favour brownfield sites over other more pristine sites (though the green belt will continue to be protected).
There'll be a lifting of all restrictions on small modifications and additions to existing developments, which will please big supermarket groups like Asda which argued for it, and it will be easier to change the use of existing buildings (from industrial to residential, for example).
Finally there will be a carrot for local authorities along with a stick, in that they may be given the ability to auction - for the benefit of council taxpayers - the planning permissions attached to parcels of land.
In the round, these planning changes could lead to a massive increase in developments, of both residential and commercial properties. They capture something the Treasury has believed for years, that the growth and competitiveness of the UK has been stifled by building restrictions.
With the corporation tax changes - and the recent pledge by Vince Cable to slash red tape - they represent a loosening of alleged shackles on the corporate sector.
They demonstrate the government's belief that the rehabilitation of the British economy can only come from the liberation of private enterprise - and perhaps also show that ministers have bought into the argument advanced by the influential consultancy firm, McKinsey, that much of the heavy lifting has to be done by the very biggest multinational companies.
All that said, at a time when millions of people are feeling a good deal poorer and are anxious about their job prospects, it is by no means certain that the allocation of precious resources to big business will be seen by all or even most voters as a manifestation of social justice.
Update 1416: One group of big companies won’t be pleased: the oil and gas companies.
They will pay an extra £1.8bn in tax this year and £2.24bn next year on their North Sea oil and gas production.
If the likes of Shell and BP don’t complain that this will undermine their efforts to squeeze the last drop of oil and gas out of the North Sea for the benefit of the UK, I will drink a litre of their finest unleaded petrol.
Also, it is not clear how the government can be sure that the oil companies won’t push up the pump price to recoup the extra tax - which would defeat the point of the exercise.
Finally, I may have given the chancellor too much of the benefit of the doubt in his determination to eschew populist pressures: abolishing the duty escalator on petrol won’t be seen as hairshirt fiscal conservatism.
Update 1725: One way in which some argue that George Osborne has failed the fiscal prudence test is in respect of the discount rate at which he has chosen to value the cost of future public-sector pension promises.
The analyst John Ralfe says that the chancellor’s decision to discount future pension payments at the rate of real or inflation-adjusted GDP growth understates the liability by a third – which translates into tens of billions of pounds of hidden liabilities.
By the way, in all the widespread confidence that we no longer face a sovereign debt crisis in the UK, it is often ignored that the UK still has to sell a colossal amount of gilts or government bonds to finance the deficit.
This year the Debt Management Office has been given a mandate to sell £169bn of gilts – which may yet turn out to be a colossal undertaking in a year when there is unlikely to be an extension of quantitative easing and the Bank of England is there unlikely to be a buyer of gilts.