This was billed as the budget for growth. What we ended up with was the usual intentions made, the slagging off of the last labour government and a not so unexpected surprise (fuel tax cut). In short ANOTHER damp squib.
Not so much a budget for growth then.
The usual right wing promises to give money back to large corporations in the future and to get rid of the 50 pence tax rate, as well the harking back to the 80’s with enterprise zones was the order of the day.
No doubt many will welcome the well trailed cut in fuel duty (putting fuel in the tank of the British economy??), but this is small consolation to many. It is pretty clear that the chancellor had little room for manoeuvre and billing it as a budget for growth was never going to materialise. There will be those very upset with the tax on private jets (I’m not one of them!), and there was a welcome lifting of the personal tax allowances which is one of the few LibDem policies that has made it through to the coalition intact and that many will be signed up to.
The course has been set for the next 2 years and the government will be battening down the hatches to deal with the strife that will no doubt come as all the tax rises and job losses hit our society.
Oil has risen 35% in the last 5 months which is having a dramatic affect on food prices and world commodity markets. All pretty much outside of the chancellor’s control. This is having a further effect on the cost of living and the feeling of many in society beleaguered by rising costs of living and the declining standard of living.
The fact that the Office for Budget Responsibility continually decreases the growth forecast can give little confidence in the chancellor’s plans or forecasts.
The truth about the British fiscal crisis is more to do with the lack of growth and thus tax receipts than it is about massive public sector cuts, yet the chancellor has rooted his success firmly on the latter rather than the former. See previous posts on The Truth about the UK deficit and The Truth about the UK Deficit Part II.
It is clear from the indications in the budget speech from George Osborne that the “squeezed middle” will have to endure the next few years with promises of sweeteners just before the next election.
Some will bill this budget as a “prudent” budget without politics. However, this budget has everything to do with the politics of the long game. Trouble now, with massive public sector cuts. Hope for the best on growth and then give away money before the next election, with most of these to their friends in corporations and big business.
Lets hope he is a lucky chancellor, because if this was a budget for growth I would hate to see one for stagnation.