This was new, serious George. In a soberly-delivered speech, Osborne went a long way to reassuring voters that he is ready to be Chancellor. He stressed financial and fiscal responsibility and deftly threaded the political needle on criticising the excesses of the City without committing to more regulation. Osborne was so keen to demonstrate his seriousness that he kept his trademark smirk under wraps. He even bit his lip during one bout of applause in a seeming attempt to stop it from breaking through.
The headline from the speech is a freeze on council tax for two years. This will be achieved by returning government advertising and consultancy budgets to 1997 levels. To qualify for this funding, councils will have to keep their proposed council tax increases to 2.5 percent or less. Considering how unpopular council tax is one would expect the Tories to get significant political mileage out of this announcement,.
On tax, Osborne emphasised that it is his and his party’s ‘aspiration and ambition’ to cut taxes. But he refused to commit to tax cuts. Indeed, the language he used makes it almost impossible for the Tories now to commit to any. I can understand Osborne’s reasoning—the country is in too much debt—but he is leaving the Conservatives vulnerable to being outflanked by a new Labour leader.
This would not have been an Osborne speech if it had not been laced with barbs at Gordon Brown. He turned Brown’s experience argument round with the line that the country has had ‘quite enough of the Gordon Brown experience.’ He joked that Brown was spending like there was no tomorrow because ‘for him, maybe there is no tomorrow’.
It would also not be an Osborne speech if there wasn’t some borrowing from America. Alongside all the Obama-isms about change, Osborne’s peroration owed much to Bush’s 2004 Republican convention speech.
Last year, Osborne set things up perfectly for Cameron with his inheritance tax announcement. He has done the same again this year.
P.S. I hear that there will be a dynamic element to the model used by this new Office of Budget Responsibility.
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