Like many people, I’ve rarely been wholly convinced by George Osborne. So let it be said that this budget was perhaps his finest hour. Happily, there is something for everyone to complain about. It would be wrong if this were not the case. I suppose Osborne could have avoided putting up VAT (to 20%) had he not exempted the National Health Service from the consequences of his axe-wielding. Politically, however, one can see why this was a gamble too far.
Nevertheless, this was, on the face of it, a good budget. Four out of every five pounds in savings come from spending restraint, not tax rises and this seems to strike the right balance. “We have had to pay the bills of past irresponsibility” said the Chancellor as he opened and closed his speech with a reminder that it’s the record of the last government that makes this extra budget necessary in the frist place.
Still, a rough estimate suggests that there’s now something like a £60bn gap between the government’s plans for the next few years and those suggested by Alistair Darling. Suddenly that’s not chopped liver. But as Osborne put it: “The country simply cannot afford this anymore”.
The sections on welfare reform were brutal and, frankly, it remains hard to see how government departments really will cut their budgets by 25%. Nevertheless, a start had to be made and one may reasonably say that messrs Osborne and Alexander have made a good beginning.
Politically, I thouht it astute: the Bank Levy won’t bring in much (£2bn) but it’s a canny populist measure designed to placate the public. Still, while a VAT rise can hardly be popular it is at least offset by rises to Capital Gains Tax and increasing the income tax personal allowance by £1000. Politically at least, as I say, all this seems reasonable.
Osborne had a good line: “The country has over-spent; it has not been under-taxed” but that doesn’t mean that all tax rises could be resisted. At least, however, they’re spread around.
Harriet Harman’s response seems to be striking the wrong notes. “We agree borrowing must come down” she says but remains unable to identify a single spending cut that she supports. More to the point, I’m not sure that shouting “Same Old Tories” is Labour’s most effective ploy.
Apart from anything else, I think there’s a wider-than-you-might-think acceptance that there need to be real reductions in government spending and that, consequently, some taxes are bound to have to go up. That may not translate into any great enthusiasm for Slasher George but there is, I believe, a grim realisation that actually and despite what Labour says things really can’t go on like this.
Nevertheless, Harman is right: this is an ideological budget and one, moreover, that serves classically liberal ends – a smaller, leaner state. True, this has been forced upon them by circumstances and disaster and by less conviction than one might ideally desire. But never mind that. The prize? A balanced budget by the end of this parliament. That too is an ambitious goal.
Still: thrift, enterprise, work and responsibility were the cornerstones of this budget – each of them traditioanal liberal conservative virtues. Here too, then, this was a coalition budget that honoured and was worthy of its intellectual ancestors.
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