THE BLOG

The Chancellor's Hit-and-Hope-for-the-Best Budget Undermines His Own Empty Words on Security

17/03/2016 07:46 GMT | Updated 17/03/2017 09:12 GMT

George Osborne would have you believe he's an iron Chancellor, prepared to take the harshest, most austere decision, in the name of the public finances.

All that, yesterday, was shown up as baloney.

"Taking action now, so we don't pay later". This is how the Chancellor started his budget speech, but by the time he sat down it was clear that paying later is exactly what we will all be doing.

What George Osborne wants us to believe is this: the global economy is slowing down, so UK growth is down and tax receipts are lower, but despite this he will still hit his target of a £10billion surplus in 2019/20, and he can do all of this while handing out huge tax cuts.

If it seems too good to be true, it's because it is. The £10billion figure relies on mythical revenue projections that seem unlikely to materialise in practice. He has pencilled in £3.5billion from departmental spending, for example, but given no indication to help us see where this will come from.

Of the £10billion surplus, over £6billion simply comes from delaying corporation tax figures so that the figures look better in that one year. This is exactly what he did last year by flogging off assets to meet his debt target, only to break the target again a few months later when he had to stop selling Lloyds shares.

This is just fiddling the figures. It's not economics, it's pure politics.

The truth is that this is a hit and hope-for-the-best budget. He has knocked all of the tough decisions into the thickest long grass he can find, and has crossed his fingers that something will happen in the next few years to rescue him.

It is a huge roll of the dice that undermines all of his empty words on security and responsibility.

Of course, not all of the decisions have been hidden in the long grass. Because times may be tight, but this Chancellor can always find room for a few tax cuts. Raising the personal allowance and the higher rate threshold will cost billions over the parliament, as will the excessive cuts to capital gains tax. Slashing corporation tax further to 17%, way below the rate that is globally competitive, is a bizarre decision from a Chancellor who was unable to find any money to help our struggling manufacturers with their business rates.

Osborne is funding these cuts by borrowing an eye-watering £38.4billion more than he planned over the course of this parliament. Tax cuts for the rich today, payed off by the taxpayers of tomorrow. All of this comes at the expense of Osborne's fiscal credibility. Promise after promise, target after target has fallen by the wayside. Less than a year from his first budget of the parliament, and already two of his three fiscal targets lie in ruins.

So this is what the so called 'iron chancellor' has been reduced to. Running away from big reforms to business rates and pension tax relief because he is scared of the backlash from behind him. He may be able to find red meat for Tory MPs, but he can't meet a single one of his targets. Weak growth, weak productivity and a weak chancellor who hopes he won't have to pick up the bill for his own failure.

Alison McGovern is the Labour MP for Wirral South