THE BLOG
19/02/2016 10:22 GMT | Updated 19/02/2017 05:12 GMT

Budget Blues Ahead as Brexit Looms Large

What are we to make of a Chancellor who crowdsources ideas for his Budget, as George Osborne has done this year?

Perhaps what we would of a surgeon deciding to take a poll on how to perform an operation: All very now, but all very unsettling.

What we hope for from someone with access to the numbers and good advice is decent choices on behalf of the nation (oh, and a surgeon who can make up his own mind).

In truth, Mr Osborne is probably not really out of ideas, just running low on palatable ones as he fine tunes his proposals for this latest financial festival.

Unfortunately, the global economy is not in great shape, and there are fears about the banks. Again. So it won't be much of a party.

China has stalled, at least by its own stellar growth standards, with a wobbling stock market that may presage another global crash. The collapse of commodity prices worldwide is a further worrying portent.

A slowing economy in the UK must be hitting Treasury efforts to produce a budget surplus in three years, too, the declared aim of all the austerity measures endured for the past seven.

His political calculation must be whether he has time and scope to raise taxes further or impose more cuts.

It seems he thinks he has. The heavy hints are that higher income pensions savers are likely to take a hit. Mr Osborne is expected to attack at least the generous upper bands of tax relief. He may even go after the tax free lump sum.

It is easy to see the problem he faces. The sustainability of our own economic recovery is by no means assured, despite low interest rates and negligible unemployment, in a turbulent world.

The Chancellor could, of course, do a lot more to go after those multinationals making a mockery of basic principles of taxation, not to mention any sense of social equity.

Substantial amounts of money could be raised if he chose to go after the biggest avoiders, easing the need to hammer middle and higher earners yet further.

But what will probably happen instead is more, but vague, words about tackling arcane avoidance, and the usual middle class suspects fleeced further. After all, they have nowhere to go.

There are unlikely to be significant giveaways to encourage saving, or even let people keep more of what they have saved.

Small, but unarguably decent measures to help particular sections of society will be used, as usual, to draw headlines away from massive structural changes that are quietly deconstructing whole sectors of state spending on social care, and have been over successive recent budgets.

This will be the last Budget, probably, before the in-out vote of our EU membership. He may use it to make some tactical points about continued membership.

There are plausible arguments on both sides. But one that should be retired is that it would cause major damage to our exports if the UK left.

It would not. We import five goods for every three we export. It seems improbable that our EU partners would wish to disrupt trade to one of its largest markets. The UK is not Norway.

There is also the argument that a Brexit would boost competitiveness by making deregulation easier, and reducing layers of compliance.

And whilst we are about it, we would save our membership fee, currently about £11 billion a year, not to mention get control of borders and manage immigration in a way that works.

The Budget is next month, the third in a year. As ever, it will all be in the small print, only this time with Brexit, and its budget, looming in the shadows.