Today is George Osborne’s last Budget of this parliament, and quite possibly his last ever Budget as Chancellor. The Budget has been more about fiscal discipline and focusing on growth than specific giveaways. This was always going to be the electioneering Budget, unlike other electioneering Budgets however, this was aimed at fiscal consolidation and showing the competence of the government’s grip on the finances. Osborne was confident and it showed in his performance. Repeatedly knocking Labour’s record and mocking the front bench as he gleefully announced his figures and future plans. Miliband’s performance aimed to highlight how far the Conservatives are out of touch, wilfully negligent with statistics and not living in the same reality as many people across the UK.
This budget was aimed to ensure fiscal discipline, whilst attempting to help families, pensioners, savers, and businesses. There is good news however, the figures for GDP growth forecast up to 2.5% and 2.3% next year where it remains for another two years, until reaching 2.4% in 2019. There is also advancement on the deficit and overall debt levels. The deficit has been halved as a percentage of GDP, and according to figures it will continue to fall. The National Debt could also start to be paid down by the time of the next parliament as the surplus is predicted of 0.2% in 2018-19 and 0.3% in 2019-20, although one must treat these figures with caution. However, even if these figures turn out to be correct, it doesn’t stop the pain for many people. Osborne does tend to cherry pick, by arguing that Britain has the highest rate of jobs creation ever, the lowest unemployment count since 1975 and a country moving towards full employment, is contrasted with the sad facts that many of these jobs aren’t enough for people to live on without welfare add-on, such as housing benefit.
This Budget has been helped by the fact that Osborne had some good news. Measures such as raising the personal tax allowance threshold significantly, increasing the minimum wage, Gift aid being increased and alcohol duty cut to take 1p off your pint. Other measures, such as the new help to buy Isa and significant pension reforms aim to increase spending power. Taxing the banks at a higher rate will also please many ordinary people. However, what Osborne failed to mention, was the pernicious cuts in public services. Although it was unrealistic to expect the Chancellor on the eve of an election to announce these cuts. According to the OBR, in the next parliament until 2018-19, cuts would be double in real terms than what we have experienced in this parliament. The concern is not just that many departments cannot bear the strain of these cuts but also that the detail from large swaths of cuts is simply missing. Cutting £12 billion from welfare is a big number, and one the voting electorate deserve more information on.
Osborne has long been known as someone who is passionate about devolution. This was clear to see in today’s budget. Measures such as Greater Manchester being able to keep 100% of business rates growth, a new city deal for the West Yorkshire combined authority, and tax on the North Sea oil being significantly reduced to 2011 levels shows the importance he attaches to regional growth. Without strong regional growth, greater devolution is harder to come by. Not only this, but it is well known that the Conservatives have a northern problem, but this problem cannot possibly be solved by any one Budget. Indeed, Miliband in his response openly mocked Osborne’s attempt to praise the North, by quoting Northern councils who have denounced the Chancellor, and by taunting the Chancellor there are no Tory council leaders in the North.
Miliband’s Commons speech was scathing in response to the budget. This was his most passionate and most promising Commons speech. Comparing his performance in the Budget, with a lacklustre and frankly embarrassing PMQ’s is something every politics student should use as a guide on how to and how not to lead a party. He openly questioned the fact that living standards have been rising arguing this was only shown by a new measure invented by this Government. It is hard to argue with Ed’s point, especially with wages only now starting to rise above inflation. His body blow to Nick Clegg on “promises” will have been felt, and his fierce admonishing of Osborne for his omission of the NHS was for all to see. Instead of efficiently outlining his plan, he tried to take apart the Conservative campaign.
In the end, this Budget will not massively change the economic debate. The Budget reinforced Labour’s point about the Conservatives cutting more harshly than themselves, and key areas such as the NHS were not in the vanguard of the argument. The Liberal Democrats accomplished some Budget policies, such as the Budget surplus being lowered during the last year of the next parliament, in favour of more spending. More dementia funding, the rise of personal tax allowance, and also Child and Adolescent mental health funding were also part of a deal which the Liberal Democrats will be happy with. This budget will not change the election, it offers the Liberal Democrats to say they have influence, and or the Conservatives there is light at the end of the tunnel. But the picture remains the same, and for the election, this Budget will be almost irrelevant.
By Sam Mace, Senior Writer for Daily Political View.