Osborne almost choked halfway through his speech. Let’s hope the rest of us don't do the same.

Budget 2013

As last year’s Budget proved only too well, the devil is always in the detail. And while according to opposition leader Ed Miliband this was a Budget from a downgraded Chancellor, there was substantially more in George Osborne’s fourth outing than many observers expected, with the possible exception of the Evening Standard, which broke an embargo on most of the proposals

There were changes to the remit of the Governor of the Bank of England, a new employment allowance to encourage entrepreneurs and small businesses to employ more people, new initiatives to encourage more mortgage lending and stimulate the housing market and even an unexpected one penny drop in the price of beer.

The Budget Book will be less digested (and less digestible) than his speech (Osborne’s knack of almost filibustering through his Budgets means it is quite hard to pick out the important announcements), and it might be there that details will be found on the costing of announcements such as reducing corporation tax for large companies down to a flat rate of 20 per cent for all companies regardless of size and the abolishing of stamp duty for shares traded on smaller markets, such as AIM. These were both welcome as part of a wider plan to make the UK the most attractive place to start and run a business.

But the government’s ease with the idea that it’s OK for multinationals to seek to reduce their tax bill by picking the best place to locate is slightly at odds with an apparent disgust at other forms of sensible tax planning. Osborne claimed that they will be naming and shaming those who advise companies and/or individuals how to avoid tax (which means accountants as much as tax lawyers and others) and suggested that the already heavily-trailed General Anti-Abuse Rule (GAAR) would raise £3bn, with £1bn coming from offshore avoidance.

This matches the amount by which Osborne claimed to be boosting infrastructure spending, with the usual focus on broadband internet and odd projects such as Battersea Power Station singled out for the nod.

The truth is that Osborne had as little room for growth as expected with the Office for Budget Responsibility (OBR) again downgrading growth forecasts for several years to come. Osborne made much of the international picture and placed much of the blame for this year’s forecast rate of 0.6 per cent growth on the eurozone. In truth if the uncertainty in Cyprus continues or spreads, even that anaemic rate will look optimistic.

All government departments will be forced to make further cuts to their budgets, in total a further £1.5bn on top of the £10bn announced in December. These will be achieved through greater efficiency and better financial controls, so at least it seems Osborne does see a positive role for accountants after all.

Perhaps more disappointing was that the detail of how the government intends to get money out to SMEs remained unclear. There was a brief mention of the Business Bank early on but no more detail in the speech.

Osborne almost choked halfway through delivering the Budget speech. Let’s hope there is nothing in the detail that makes the rest of the country do the same.

This article first appeared on economia.

Photograph: Getty Images

Richard Cree is the Editor of Economia.

Photo: Getty
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The big problem for the NHS? Local government cuts

Even a U-Turn on planned cuts to the service itself will still leave the NHS under heavy pressure. 

38Degrees has uncovered a series of grisly plans for the NHS over the coming years. Among the highlights: severe cuts to frontline services at the Midland Metropolitan Hospital, including but limited to the closure of its Accident and Emergency department. Elsewhere, one of three hospitals in Leicester, Leicestershire and Rutland are to be shuttered, while there will be cuts to acute services in Suffolk and North East Essex.

These cuts come despite an additional £8bn annual cash injection into the NHS, characterised as the bare minimum needed by Simon Stevens, the head of NHS England.

The cuts are outlined in draft sustainability and transformation plans (STP) that will be approved in October before kicking off a period of wider consultation.

The problem for the NHS is twofold: although its funding remains ringfenced, healthcare inflation means that in reality, the health service requires above-inflation increases to stand still. But the second, bigger problem aren’t cuts to the NHS but to the rest of government spending, particularly local government cuts.

That has seen more pressure on hospital beds as outpatients who require further non-emergency care have nowhere to go, increasing lifestyle problems as cash-strapped councils either close or increase prices at subsidised local authority gyms, build on green space to make the best out of Britain’s booming property market, and cut other corners to manage the growing backlog of devolved cuts.

All of which means even a bigger supply of cash for the NHS than the £8bn promised at the last election – even the bonanza pledged by Vote Leave in the referendum, in fact – will still find itself disappearing down the cracks left by cuts elsewhere. 

Stephen Bush is special correspondent at the New Statesman. He usually writes about politics.