Isabel Hardman Isabel Hardman

What could George Osborne’s rabbit be?

Presuming that George Osborne isn’t sitting in the Treasury, perspiring slightly as he tries to work out what on earth he could offer as a big surprise in the Budget, here are some suggestions on what that surprise rabbit from the hat could be*.

  1. A lower AME welfare cap funds a higher personal allowanceThe Chancellor is due to set the level of the spending cap for welfare in today’s Budget. Could he set it much lower than expected, and use the extra money saved to raise the personal allowance much higher than expected? This would mean he can tie welfare spending to taxpayers’ money in an even more explicit way than he has done previously, and challenge Labour to vote against the cap by saying that they’d be denying taxpayers more of their hard-earned cash during a cost-of-living crisis. This would also tie in with the tax transparency statements pioneered by Ben Gummer: more here on why those are useful to the Treasury’s drive to cut welfare spending.
  2. Air passenger dutyA cut in APD would be a nice little treat style announcement along the lines of previous efforts on beer. And it’s something the SNP has campaigned on, so it would help the ‘No’ campaign.
  3. National Insurance is renamed to the Earnings TaxBen Gummer’s 10-minute rule motion calling for this name change has sympathy at the highest levels of government. Could today be the day it’s announced as government policy? It would be another trap for Labour, which is widely expected to use NI to plug the gap in 2015.

*Disclaimer: this is pure punditry. All we know is that Osborne loves playing a strategic game, so whatever he does pull out of that hat will probably be quite an obvious bit of bait for Labour to walk into a political trap.

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