A Budget for Re-election

Friday 22nd March

The Chancellor’s budget speech usually lasts about an hour.  It has become the practice recently for Chancellors to send everyone to sleep (Osborne’s delivery doesn’t help) for fifty minutes of that hour and then to whammy us in last ten minutes with the stuff which will form the headlines in tomorrow’s papers.  And George, ever the politician, didn’t fail this time.

In 2010 when the Tories (with Lib-Dem help) became the Government they were full of confidence that they could both grow the economy and slash public expenditure at the same time.  In fact one depended on the other, in their philosophy – roll back the state and the private sector will grow to fill the gap and make us (we all know who they mean) richer.

Of course that hasn’t quite panned out the way they expected.  Hidden in the boring fifty minutes were revised down (yet again) growth forecasts, mirrored by rising borrowing and debts.  The deficit that would be reduced to zero by 2015 is now still going to be around in 2018.  And as these forecasts have been optimistically wrong every single time I expect it will be 2019 by next year’s budget at least.

But for the Tories this entire raison d’etre seems to have been forgotten in this re-election budget.  It was full of small give-aways, which considering the state of borrowing we can ill-afford.  Nobody can complain at raising the personal allowance to 10k, though it is accompanied by last year’s announcement of a cut in top rate of tax of 5p.  Likewise the help offered to buyers of new-build homes is welcome and may help build more houses.

The poor got very little, a penny off beer duty.  I can just imagine all those unemployed teenagers rushing to the pub to celebrate.

This was a budget for re-election, pure and simple.  Most of the measures don’t kick in until 2014 or even 2015 and none of his measures begin to address the lack of growth in the economy, or even more crucially his own desired measure of success, reducing the deficit.

Well done George.  But it still won’t work.  The Tories will be a one-term government, but their legacy may well last a lot longer.