Budget Comment: Terry Murden, Editor
Osborne eases up on austerity and raids banks in ‘Budget for the nation’
George Osborne gave his sixth and possibly final Budget statement and one that was always going to be heavy on politics. In fact, he went a little further, lacing it with a touch of triumphalism as if the General Election was already in the bag.
Britain was walking tall, the sun was shining and he was fixing the roof. The metaphors kept on coming throughout his 59 minute speech as he taunted his Labour opponents’ association with the financial crash and the deficit that the Tories were now sorting out.
His pledge to end “unfunded spending and irresponsible borrowing” was underpinned by an economy growing faster than Germany and France and on course to become the biggest in Europe.
As his confidence rose, he was even able to predict an earlier than planned end to austerity, while maintaining his commitment to reduce the deficit.
In truth, he probably overplayed the growth story when in fact he was only able to ease personal taxes, cut whisky and beer duties and provide a new cash boost for homebuyers by indulging in more banker bashing, imposing a near-£5bn levy, and bringing forward the receipts from selling shares and mortgage backed assets still on the government’s books.
Of course, all Budgets are exercises in smoke and mirrors and this was no different. Because this was a pre-election Budget he could promise the earth without having to really believe what he was saying. But at least he pitched it to help business and improve the cost of living for millions of low paid workers and the tax benefits will go some way to achieving both.
Some news outlets insisted Mr Osborne would stick to his thrift principles. While sticking to his deficit-reducing agenda, he confirmed two Daily Business predictions. First, to raise the basic rate of income tax threshold to £11,000, and second to offer a few “mischievous giveaways”. Cutting alcohol duties was a win-win for drinkers, the industry and, most of all, for Mr Osborne and his party. At this stage in the electoral cycle he had to offer a few titbits.
Business seemed relatively encouraged by the Budget, though he didn’t offer much beyond the drinks industry tax cuts and direct help for the North Sea oil industry which had become something of a no-brainer.
Probably his biggest help for business, as argued in another column by Colin Borland, was to end the need for tax returns. Anything that reduces time-consuming paperwork is as good as a pay rise for many folk and this is clearly a popular measure whose time had come due to progress on the digital economy.
Labour leader Ed Miliband was left to attack the Chancellor for what he didn’t say: omitting any reference to public spending cuts to come – which are likely to be deep – and his plans for the National Health Service.
But he was clearly struggling to argue against figures showing that a recovery is under way and gathering pace. Mr Osborne may have just made Labour feel a little more nervous about the election’s outcome.