“There’s only one direction. One world, one nation, yeah one vision”. Unwittingly or not the Chancellor today has echoed the key phrases from Queen’s anthem of the 1980’s with a yet again carefully constructed Budget statement. This was the first Conservative Budget for nearly two decades and it resonated with a philosophical underpinning of aspiration, ambition and endeavour over reliance on welfare or cheating on the system.
The complex mosaic that is the Red Book – all 100 or so pages of it – is crammed into sixty minutes or so of political theatre. We knew the Chancellor would re-heat commitments he made back in March before the interruption of the Election, so we had those on corporation tax (going down, again, and benefits for smaller firms too), on personal allowances (thresholds up), and on chasing those who avoid taxes. And a surprise to commit to a new national living wage which will eclipse the (Labour inspired) national minimum wage.
This time he could also go further with the deficit reduction mantra knowing that he could get away with bad news now before building up to better news by 2020. So a lot of the measures of pain – especially on welfare reform – are in these early years of this administration. This Conservative Chancellor sailed close to social engineering with the changes to benefits but was equally tough on those at the other end of the income scale, especially those with non-dom status. I think I now understand what compassionate Conservatism looks like but those in social housing, or on welfare, may not like the look of it.
And he has clearly had time to listen to the wealth generators too since the Election. The paring down of the bank levy over six years is Osborne saying ‘you may have suffered but I understand’; whether this is related to several large banks indicating their desire to leave the UK if things did not change, we can only guess.
Business taxes and savings were again at the heart of this Budget too, though the Government has hesitated on pursuing yet more pension reform without checking first. This is sensible and allows the private sector especially to help frame that thinking going forward. Other measures were promised in a plethora of new documents to be mostly released on Friday when the excitement has worn off.
So on balance, what have we learned that we did not know with this long awaited (by Conservatives) statement? That the UK is not over all of its problems. That the Eurozone is still weak, but the UK stronger, so we should be mindful of ‘borrowing that takes control of a country’ like Greece. That the welfare system needed overhauling but not at the expense of the elderly, vulnerable or disabled. That motorists should pay for the poor roads they drive on (neat tax increasing measure) to help fund more roads. That public spending is likely only in health but that public sector workers cannot expect to receive significant pay awards. And that this Chancellor recognises that the wealth generators are the ones to nurture to generate the growth, jobs and prosperity to help cut back the deficit and get Britain back in the black.
“This is a Budget for working families”, intoned the Chancellor with the emphasis on the key word of ‘working’. A very Conservative message, shrouded in some bad news for some in society but as the Government will probably say in the days that follow this – you voted for us, now let us get on with it.
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