Peter Hoskin

Unspectacular, but quite effective

Unspectacular, but quite effective
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Well, that was excitingly unexciting.  There was little in George Osborne's Budget that we didn't expect, either in terms of rhetoric or policy.  But it still felt new and different nonetheless.  Here we had a Chancellor setting out exactly how much spending he will cut, and putting plenty of emphasis on both our deficit and debt burdens.  It drew a stark contrast with the Brown years, and was a solidly understated performance in itself.

There will be plenty of attention paid to the hike in VAT, and rightly so.  But there were some macroeconomic forecasts which were just as eyecatching.  In his address, Osborne suggested that the deficit on "current spending" would be obliterated by the end of this Parliament – not halved, not more-than-halved, but completely written off.  And, to go with that, he suggested that the overall debt burden would start falling over the same time period – although I'd like to check whether that's just debt as a percentage of GDP, or debt as a cash figure.  I strongly suspect it's the former.

Now, we're into the battle to frame this Budget.  In a surprisingly strong response, Harriet Harman demonstrated where Labour will concentrate their anger: on the VAT rise and other measures which will hit the least well-off.  But Osborne will hope that the plan to take hundreds of thousands of low-income earners out of tax – the best measure in today's Budget – will take the bite out of those attacks.  Throw in those tables showing that the richest are hit the hardest, and the coalition will be confident that it's got enough to support their claim that this is a "progressive Budget".  

In the end, Osborne's first Budget was short on fireworks, but there was a quiet boldness to it all.  We'll trawl the footnotes and appendices shortly.  But the market reaction seems to have been positive so far.  More soon.