The Budget remains one of the political highlights of the year. George Osborne’s latest effort was always going to be one of his challenging. Governments tend to use Budgets held in the aftermath of a General Election win to get difficult or controversial policies out of the way, but this Budget was more about keeping people happy in advance of the European Referendum.
More austerity had been widely touted in the media in the run-up to Budget day so the bad figures didn’t come as a shock. However, the massive turn around in finances to deliver budget surplus by 2020 had a few people scratching their heads.
So what can we learn from the Budget this week?
- When is a sugar tax not a sugar tax? When it is a dead cat. The appearance of the Jamie Oliver-inspired tax on sugary drinks was not universally well received. However, it did distract from the Chancellor’s failure to hit his debt target. The Institute for Fiscal Studies have suggested the tax could raise sugar consumption so not much public health benefit either.
- The Northern Powerhouse is on track. The award of a £300 million fund to improve northern transport connectivity coming just a day after the publication of the National Infrastructure Commission’s report, which asked for the schemes to be backed, was a continued sign of Osborne’s commitment to the Northern Powerhouse. Lord Adonis will be pleased.
- More ‘State of the Union’ and less a Budget. Osborne ranged widely over education and health policies and didn’t just stick to tax and spend. The approach seems to be laying the foundations for his pitch to be the next leader of the Conservative Party and in the process he sidestepped Nicky Morgan, Secretary of State for Education and a potential leadership rival.
- Omnishambles 2016? The 2012 Budget and infamous ‘pasty tax’ was a stain on Osborne’s track record and tarnished his image. He rebuilt it and his central role in the 2015 win and Conservative majority showed that he had political nous. The sugar tax and an already building Conservative rebellion over proposed cuts to disability benefits mean that he could have a second omnishambles Budget on his hand. This one would be more difficult to recover from.
- Jam in 2020. In difficult economic times, a Chancellor always has to show that jam for the electorate is coming. However from Osborne’s figures t it was clear that the ‘jam’ will not come tomorrow but instead will be in a very large jar exactly at the time of the next General Election. Whether George will be in No 10 or No 11 by then is not yet clear.