George Osborne started this budget with a short repeat of one of his greatest hits, “The Mess Labour Left”, and the budget that followed, too, was vintage Osborne. It’s not just the UK’s GDP that is at risk if Britain leaves the European Union but the Chancellor’s job too, and if this does turn out to be his last budget then he gave a whistlestop tour of everything that came before.
There were stealth tax rises – to the Insurance Premium tax and on sugar – and further action to close tax avoidance loopholes, the two preferred revenue-raisers of the Osborne era. (The Chancellor’s dependence on closing loopholes to close the revenue gap is one reason why he tends to concede early and badly when dealing with big multinationals on their tax bills).
There was a threshold raise, again, and an increase in the higher rate threshold. Taken together, the 40p rate will now kick in above £45,000, benefiting the top 15 per cent of earners. Largesse for pensioners was on realtively short supply for an Osborne budget, but what is trumpeted as a tax break for “micro-entrepeneurs” in the shape of a tax cut for AirBNB users will largely flow to buy-to-let boomers. There were bungs for the other half of the Osborne coalition, dual-earner couples earning above average income – but without children, in the shape of the Lifetime ISA which will give savers under 50 up to an extra £1000 from the government to save towards a house or a pension.
The same pet projects made an appearance, too. A big transport project – in the shape of Crossrail 2, for London – which the government will hope is a shot in the arm for Zac Goldsmith’s mayoral campaign. That the capital will now have business rates devolved to it allows the Richmond MP to go into the campaign promising a tax cut, traditionally an asset come election time. And there was further regional devolution, this time to East Anglia, who will get an elected mayor.
But there were the same absences too. Fuel duty has been frozen again while subsidies to the oil industry are up, part of the five year transistion in taxation away from the motorist and the shift of subsidy away from renewable energy and back to oil and gas.
The big early story – that all schools will be “in the process” of becoming academies by 2020 feels fungible. It’s a form of words that could easily be applied to the overwhelming majority of English schools today, and the 2020 target may well be missed. Just like the targets on deficit and debt, again, as with all Osborne’s budgets, mentioned, promised, with further austerity – spending will be reduced to pre-2001 levels by the end of the parliament and there are £3.5bn extra worht of cuts to come – an ever-present, but the promised land of a debt-free Britain always remaining just a little further out of reach.