Politics: Osborne goes for growth

This Budget was a reminder that political tactics alone are not enough to explain George Osborne’s actions. The most striking thing about it was the political risks that it took for economic growth. If Osborne was the polling-obsessed politician that his critics claim he is, he wouldn’t have gone near the 50p rate — nor would he have backed more toll roads.

This is not to say that there isn’t a lot of politics in his political economy. Under­pinning each of Osborne’s Budgets is a desire to turn Britain back into a Conservative country, to undo Gordon Brown’s 13 years of statist social engineering. He believes, rightly, that countries with small states and large private sectors are much more likely to elect centre-right governments.

To the frustration of some on the right, Osborne chooses to do this through a series of nudges rather than one big shove. The decision to send taxpayers a detailed breakdown of where their money goes is a typical Osborne gambit: a seemingly small change but one designed to move the debate off social democratic ground. The hope is that this annual reminder of where everyone’s taxes go will act as an antidote to the constant calls for more spending from pressure groups and the media.

When Osborne and his closest aides met in the Treasury on Tuesday night, their sense was that this Budget is the axis which the parliament will turn. As they worked on the remaining details, they were all aware that it represented their last best chance to make the difficult choices necessary for growth. One of those present says, ‘If we’re not taking difficult but right decisions now — in the second year of the parliament — then when do we?’

There are three factors behind these touches of radicalism.